Innovation and adoption in microecosystems

14 June 2018 23:17

Innovation and adoption in microecosystems

Classic theories of innovation and of the adoption of innovations have traditionally focused on the firm or the entrepreneur as the main source of innovation and the consumer, customer or user as the adopter. Recent research on open innovation, platform-based innovation and innovation ecosystems has questioned this view and increasingly considered innovation and adoption as consequences of the evolution of new, reciprocal value propositions between numerous actors in large ecosystems.

Trying to understand service innovation and service adoption, we have been struggling with these two opposing views. We have missed theories and models explaining situations amidst these two extremes - between situations where clear roles are predefined and traditional firm/customer relationships are observed (e.g. single-player mobile game) and situations where adoption depends on the simultaneous change of practices among numerous actors in an ecosystem (e.g. electric cars).

What we have come up with to assist us is the term microecosystem. The term borrows from the ecosystem literature but is inspired by the idea that a larger ecosystem can be divided into numerous microecosystems that share many of the same characteristics, but at a smaller scale. The concept comes from plant biology, where the ecosystem around the plant is increasingly understood as a complex but highly important small ecosystem in itself. It is even proposed that understanding this microecosystem is the solution to both global warming and fertilizer and pesticide challenges in agriculture. But, let's be practical and see how the concept may help us understand three innovations we have been working with; one in retailing, one in the public health sector and one industrial service innovation.

In retailing, our models of the relationships between firms and consumers are of the traditional sort, with well-defined roles. Consequently, innovation often resorts to incremental product innovations. The sector is struggling with rigid business models, consumer criticism and regulatory threats due to lack of competition and consumer satisfaction. Thus, radical innovation typically requires systemic changes. However, in-between the extremes of marginal product innovations and grand systemic changes, things happen. The handcrafted beer and cheese movements have somehow managed to get hold, and recently, we have seen the growth of alternative food distribution systems in Scandinavia in the form of Reko-rings. These rings are in fact hundreds of food microecosystems where producers, ring-administrators and consumers meet using Facebook as the marketing communication and ordering system, modern mobile payment systems like Vipps and Swish as the transaction platform and parking lots as the distribution channel. What is innovated and adopted is unique to each of the rings which are best considered as separate microecosystems. They cannot be understood in traditional firm - customer terms. For example, highly skilled and nutrition-focused producers are among the most important and demanding consumers in the rings.

In health services, the predefined roles are different, but our models are still fairly traditional. We often think that to meet the future challenges of caring for the growing population of the elderly, grand systemic changes are required. However, practices change at the smaller scale as well. For example, in Scandinavia, the phenomenon of "Everyday rehabilitation" has gained in popularity with its main focus on reconsidering the value propositions and relationships in the microecosystems around each care taker from focusing on doing what is required for the care taker to helping the care taker master what is required. This is why we now consider innovation in health care in a project in Bergen municipality as innovations in the practices of health care in each microecosystem of caretakers, "next in kins" (including relatives and friends) and heath care personnel of different kinds (including nurses and doctors). The unit of analysis is not the care taker or the health care service system, but these smaller microecosystems. For example, we develop models of the shared conceptualizations among the relevant members of what the "practice of living at home longer with technology assistance" means rather than models of what the care taker believes about a specific assistive technology. What is innovated and adopted is the "shared practice of the care taker living at home longer" rather than some particular assistive technology. In fact, this practice may not involve technology in the traditional sense at all.

Finally, industrial service innovation is often met with similarly predefined roles and traditional models. This is why one often thinks that sustainable production requires systemic changes in large ecosystems of manufacturers, business customers and regulators. However, also here, things change at the smaller scale, particularly in different forms of circular production micoecosystems that are parts of a larger ecossystem but also autopoietic, to use an old and forgotten term from cognitive and system sciences. Sometimes, it is possible to define circular product-service systems that require less radical changes in reciprocal value propositions among a smaller set of actors to obtain significant sustainable innovations. In Norway, one example is the "biorest" innovation. It implies that instead of citizens and municipalities sending biological waste to treatment plants and farmers to spread the manure of their animals in the fields, manure may be used as a catalyzing ingredient in biogas production based on household biological waste. This is well-proven science and technology. However, it requires changes in the value propositions and practices of all actors involved in the biological waste/manure microecosystem as well as developing the new relationships of this microecosystem. In the Vestfold region, this was solved by a service platform company taking the role as a facilitator for practice change. The result involves more transport of manure and biological waste material, but the process produces methane that is used for all transport vehicles. In addition, enough gas is produced (and not any longer sent into the atmosphere) to power all vehicles handling household waste collection and several local busses. In addition, farmers get back the "biorest" as a high-quality fertilizer to spray on their fields with no methane and significantly less carbon loss to the atmosphere. What is innovated is a new shared practice of local waste and manure treatment that is jointly adopted by all actors in the microecosystem of "biorest".

Hopefully, these three examples illustrate how the concept of microecosystems assists us in understanding and facilitating innovation and adoption at a level beyond the individual firm but below the complete ecosystem. The term has also made us more optimistic regarding sustainable innovation and less pacified by the overwhelming challenge of systemic change required by many of society's grand challenges. 

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