Platform Thinking Strategic principles for orchestrating innovation ecosystems in the digital economy

Abstract: In the digital economy incumbent firms act in increasingly networked environments referred to in this study as innovation ecosystems. To thrive in this new business landscape incumbent firms must employ new innovation strategies and we suggest that incumbents should adopt ‘platform thinking’ to orchestrate their innovation ecosystem. Platform thinking refers to the strategies of incumbent firms that entails exposing their core product or service to external innovators in the innovation ecosystem thereby viewing their core product or service as a platform for innovation. Following this logic, participants in the innovation ecosystem can jointly create a larger value than either of the actors could have on their own. We employed a comparative case study to investigate what capabilities incumbent firms need to develop to leverage a platform in an innovation ecosystem. Our findings indicate that incumbent firms must develop four capabilities; the capability to share resources without specifying the innovation outcome; the capability to capture value from multiple revenue streams; the capability to protect the created value through interdependent relations; and the capability to create generative structures. The theoretical conceptualization of platform thinking constitutes this study’s novel contribution to the platform and ecosystem literature. Furthermore, the study contributes to practice by providing deeper insights into the capabilities that incumbent firms must develop to leverage an innovation ecosystem and thrive in the digital economy.