Innovation through institutionalization: A service ecosystems perspective

This article explores the role of institutions in innovation from a service-ecosystems perspective, which helps to unify diverging views on innovation and extend the research regarding innovation systems. Drawing on institutional theories, this approach broadens the scope of innovation beyond firm-centered production activities and collaboration networks, and emphasizes the social practices and processes that drive value creation and, more specifically, innovation the combinatorial evolution of new, useful knowledge. Based on this ecosystems view, we argue for institutionalization - the maintenance, disruption and change of institutions - as a central process of innovation for both technology and markets. In this view, technology is conceptualized as potentially useful knowledge, or a value proposition, which is both an outcome and a medium of value co-creation and innovation. Market innovation, then, is driven by the combinatorial evolution of value propositions and the emergence and institutionalization of new solutions. (C) 2014 Elsevier Inc. All rights reserved.