Open Ecosystems

Platformable logo
Understand
watch5 min read
email

Measuring the value of open ecosystems: 1. Our model

Written by Mark Boyd
Updated at Wed Sep 15 2021
featured image

Who should read this:

Digital infrastructure policy leads, API providers, regulators, community advocates

What it’s about:

To create and nurture value in an open ecosystem, it is essential to be able to map how stakeholders interact and what tools, strategies and types of relationships help foster participation and distribution of value. This post starts to explain the model used by Platformable to measure open ecosystem value.

Why it’s important:

Platform businesses and ecosystem networks thrive when there are effective relationships between stakeholders. This post outlines how we view open ecosystems and how they differ to platforms.

Platformable’s core mission is to measure the value of open ecosystems in order to enable all stakeholders to participate and co-create their own value.

We recognise the challenge laid out by Nambisan, Lyytinen and Yoo in the Handbook of Digital Innovation:

As digital innovation now cuts across industries and breaks down old industrial organisation, it is also of significant importance to study the associated individual team, firm and industry level interactions, i.e. to view digital innovation as a dynamic complex (socio-technical) system, recognising the constantly shifting and new boundaries of firms and other entities. This, in turn, calls for more orchestrated efforts to analyse individual, team, firm, community and industry level changes simultaneously, and more importantly, to analyse their dynamics holistically, as firm-level innovation increasingly rests on industry-wide infrastructures while firms' innovation efforts contribute to building such infrastructures. All of this happens in the context of open communities, individual and user-led innovation, and new forms of collaborating and competing at the industry level.

Handbook of Digital Innovation

Nambisan, Lyytinen and Yoo

To measure stakeholders, these relationships, and the value being generated in open ecosystems, we use a range of tools including:

  • Taxonomy definitions
  • Data modeling
  • Open standards usage
  • Value network analysis
  • Ecosystem mapping.

The open ecosystem model

We define an open ecosystem as:

A network of equitable participation opportunities that allow stakeholders (including governments and regulators, associations, industry enterprises, small and medium enterprises, researchers, community groups and individuals) to co-create, collaborate, complement, and/or compete with each other by using common tools (APIs) and infrastructures.

Platformable

Therefore an open ecosystem is made up of:

  • the stakeholders themselves,
  • their relationships, and
  • the infrastructure they need to co-create, collaborate, complement and compete.

Our definition draws from work including:

How platforms, their ecosystems, and open ecosystems differ

We differentiate between platforms, their ecosystems, and wider open ecosystems in our work.

Platforms are businesses or entities (including governments) that have opened up their functionalities and data in a way that they can mediate relationships between producers and consumers. This may involve exposing their own capabilities and data assets as digital components that can be used by other producers and consumers as “raw ingredients” when creating new value chains, or they may work as intermediaries that facilitate access between producers and consumers who then co-create their own value.

Ecosystems are the networks of stakeholders that interconnect around a platform business and that generate further value through network effects and by creating new products and services that build on top of the assets and products that are made available. We see ecosystems as “orbiting” a platform.

An open ecosystem, then, is a wider digital market made up of multiple ecosystems within (or across) a given domain. Within ecosystems, some network stakeholders draw on assets from multiple platform businesses. When this occurs, there is a series of interconnected ecosystems being generated across each platform’s own ecosystem, creating open ecosystems.

Sometimes, governments and regulators force the existence of open ecosystems by mandating that all stakeholders in a given domain must use APIs to generate platform and ecosystem effects. In other cases, open source technologies, API standards bodies and network associations create tools or standards that can be used by all stakeholders, thus creating open ecosystems. This is beginning to occur in open banking, open finance, public health, in resource usage, and to encourage a circular economy. Governments are also increasingly moving to API open ecosystem models to expand the potential of building new digital products and services for their economies, environment and citizens.

For example, under open banking regulations, banks are moving towards a platform business model in which they expose APIs to third parties that can then build new products and services. The bank and those third parties operate as an ecosystem. Some third parties also connect to other banks' platform APIs. So they are part of multiple ecosystems. Banks themselves may also make use of other bank APIs, and some of the third parties may also be platforms that have their own APIs that others integrate with in their products. All up, at Platformable, we call all of those platforms and ecosystems the open banking/open finance open ecosystem.

In summary

This post outlines how we define open ecosystems and how they differ from platforms and other types of ecosystems. In the rest of our series, we will cover:

Following this introductory series, we will then start sharing the data models and value flow in the specific ecosystems we work with including open banking/open finance, digital government, public health, and the circular economy.

member image

Mark Boyd

DIRECTOR

Related article