The concept of a business ecosystem was first articulated by the strategist James F. Moore in his seminal 1993 Harvard Business Review article, “Predators and Prey: A New Ecology of Competition,” and the idea has since gained substantial currency. A business ecosystem is a community of enterprises and related organizations that coevolve over time and align themselves with directions set by one or more central companies. Examples of business ecosystems include a computer company and its users, investors, and third-party app developers; or an energy company with its network of suppliers, customers, traders, and resellers; or an auto manufacturer and the suppliers, retailers, and marketers that surround it.
The ecological analogy is apt because it emphasizes the fact that ecosystem members may both cooperate and compete with one another in complex ways that lead the entire community of enterprises to thrive. But there’s a key difference between biological and commercial ecosystems. In nature, ecosystems can survive and thrive for long periods of time, almost in perpetuity. By contrast, business ecosystems tend to fall apart in a matter of decades, and the “clock speed” seems to be increasing. Furniture manufacturers near High Point, N.C., flourished for more than a century after reaching critical mass in the 1890s, whereas the minicomputer ecosystem, located along Massachusetts’s Route 128, lasted for less than 30 years after its 1960s heyday.
This story is from the Summer 2020 edition of strategy+business.
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