Joining forces to create value: The emergence of an innovation ecosystem

During periods of discontinuous technological change (DTC), firms seek alliances to obtain new resources and competences. The concept of innovation ecosystems is increasingly used to address joint value creation endeavours. Interactions within an innovation ecosystem are typically organized around a technology platform consisting of shared assets, standards, and interfaces. Yet, few empirical studies explain how innovation ecosystems emerge. Based on a longitudinal case study of autonomous drive technology development at Volvo Car Group, this paper aims at showing how alliances for developing a new technology leads to the emergence of an innovation ecosystem. In the context of a DTC, the paper underlines how the initial resource constraints can be a blessing in disguise that drives a firm to seek new alliances. We identify that the alliances had a significant influence on the technology platform, transitioning it from an internal to a modular technology platform. This triggered the emergence of an innovation ecosystem, consisting of actors co-creating value and organizing around the technology platform. Further, the paper highlights the subtle distinction between modularization for outsourcing and modularization for co-creating value.