May 2005 Digital Business Ecosystems: ICT in support of Lisbon Agenda F. Nachira European Commission DG-INFSO - Unit “ICT for Enterprise Networking” Head

May2005

Digital Business Ecosystems:

ICT in support of

Lisbon Agenda

Creative Commons License - Attribution-NonCommercial-ShareAlike 1.0. Creative Commons Licensehttp:// creativecommons.org/licenses/by-nc-sa/1.0/

F. NachiraEuropean Commission DG-INFSO - Unit “ICT for Enterprise Networking”

Head of Sector “Technologies for Digital Ecosystems“

F. NachiraEuropean Commission DG-INFSO - Unit “ICT for Enterprise Networking”

Head of Sector “Technologies for Digital Ecosystems“

Advanced International Summer School

“e-Business and Complexity: New Management Practices”2005 Session: The emergence of Novel Organisational Forms in the Globalising Planet:

Toward the Business Ecosystem ?

2European Commission

Directorate-General Information Society and MediaUnit D5 : ICT for Enterprise Networking

F.NachiraOstuni - 7 July 2005

eBMS Summer School

Lisbon Objectives: “ a strategic goal for the next decade”

To become the most competitive and dynamic knowledge-based economy in the world,capable of sustainable economic growth with more and better jobs and greater social cohesion.




eBMS Summer School

ICT key role• ICT adoption

• Responsible of 40% growth in productivity

• ICT as sector• 6% GDP 6% employment

• Integration in good and services

• Strategic sector

“The EU needs a comprehensive and holistic strategy to spur on the growth of the ICT sector and the diffusion of ICTs in

all parts of the economy” Kok report




eBMS Summer School

New strategic framework:i2010 initiative

• Comprehensive and holistic approach:• Umbrella initiative for EU Information Society and Media

policies (regulation, research and deployment)

• Three priorities:• Completing the Single European Information Space

• Strengthening innovation and investment in research

• Achieving an Inclusive European Information society




eBMS Summer School

• Legislation, regulation• Financial support:

Two distinct and complementary financial instruments • CIP: To drive forward innovation through the

adoption and best use of ICTs• FP7: To strengthen Europe’s leadership role

in mastering and shaping the development of ICTs

• Coordination, consensus-building

i2010 - Community Actions




eBMS Summer School

Knowledge, products and services

(for growth and jobs)

ICT in FP7Research

shaping ICT development

ICT in CIPUptake and best use

User needs evolving requirements

Uptake barriers (legal, economic,..)Acceptability of solutionsNew research challenges

New technologies, applicationsTechnology trends. Vision of the future Innovation

Research

i 2010




eBMS Summer School

Putting the knowledge triangle at work

“Triangle of knowledge”

research:

education innovation

Europe needs to investmore and better

Europe must perform better • in producing knowledge through research• in applying it through innovation• in diffusing it through education




eBMS Summer School

CIP Competitiveness and Innovation framework Programme

•New programme to boost growth and jobs in Europe•By providing horizontal measures supporting competitiveness and innovation

• Entrepreneurship (SMEs) & innovation

•By addressing three main “technological” domains underpinning the whole economy

• Eco-innovation (environment)• ICT Policy Support• Intelligent Energy (energy efficiency & renewable energy)

•ICT Policy Support :• Stimulates innovation through wider adoption and better use of ICT




eBMS Summer School

ICT in FP7: Objectives,Main Themes

• ICT Technology Pillars• Software, Grids, security and dependability

• Integration of Technologies• Applications Research

• providing the knowledge and the means to develop a wide range of ICT-based services and applications

• ICT supporting businesses and industry (business processes; collaborative work; manufacturing)

• Future and Emerging Technologies

“To enable Europe to master and shape the future developments of ICT so that the demands

of its society and economy are met”

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European Commission Directorate-General Information Society and Media

Unit D5 : ICT for Enterprise Networking F.Nachira

Ostuni - 7 July 2005eBMS Summer School

Create favourable conditions

•Create a climate conductive to investments, innovation and enterpreneurship: the conditions for

• Attracting biz and entr. direct investments • Attracting enterprises• Attracting skilled and qualified workforce

Service & technicalInfrastructure

Business & financial conditions

Human capital, knowledge and

practices

Governance regulations &

industrial policy

How to create a favourable environment

for business and people: a socio-economic eco-

system ?

Paradigm shift: from planningto nurturing a business ecosystem

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Peculiaritiesof EU economical structure

• Cultural diversity (model of business, approaches, practices, …)

• Dimensions of enterprises (SMEs vs. LE)

• Historical presence of clusters with diffused tacit unstructured knowledge, skills and infrastructure

Turn peculiarities and diversity into into competitive advantages

How ICT could support? Which ICT ?

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Knowledge-base economy: migrating towards service economies mediated by ICT

More interrelations More specialised resourcesMore R&D / innovation

Small companies have limited specialised resources Access to global value chains Access to knowledgeAccess to specific services (e.g. legal)

Threshold and Digital Divide

SMEs :a weakness or a potential for Europe ?

SMEs

Threshold(“Activation energy”, and Digital Divide)

Threshold(“Activation energy”, and Digital Divide)

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SMEs in a Dynamic knowledge-based global economy

Growth Node

Business EcosystemIndustrial District

Virtual cluster

• How to reach the critical mass of resources ?• How to cope with the increased complexity ?

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Which ICT technology for business ecosystems ?•Scenario:

“… the actual slowly changing network of organizations will be replaced by more fluid, amorphous and often transitory structures based in alliances, partnership and collaborations”...

“…building a community that share business, knowledge and infrastructure”(1)

“To support this scenario of aggregation of services and organizations, is required a further stage in ITC technology adoptions and an infrastructure which exploits the dynamic interaction (cooperation and competition) of several players in order to produce systemic results; innovation and economic development.”

“Towards a Network of digital business ecosystems fostering the local development ” (EC, Discussion paper, 2002)

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Evolution in ICT-adoption: Increased complexity in business networking key role of the knowledge (knowledge soc./econ.)

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How deal with complexity: ecosystem metaphors

•Economy and Society as EcosystemsRothschild,’90: Organisms & organisations are “nodes in networks of

relationships”. Mitleton-Kelly, 2003: Orgs are co-evolving within a social ecosystem

•Business EcosystemsJ.F. Moore, 1993 & 1996

Customers, lead producers, competitors, other stakeholders.Interaction (within a business ecosystem); decentralised decision-making and self-organisation.

M. Iansiti and R. Levien, 2004A large number of loosely interconnected participants who depend on each other for their mutual effectiveness and survival“The keystone species” determine the co-evolutionary processes.

•Digital EcosystemsEuropean Commission 2002

Ecosystem paradigm applied to digital worldSAP, HP, …

•Natural EcosystemsDynamic, constantly remaking themselves, adapting to the environment,

evolution

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How to deal with the complexity?

• No easy answer, no short-term solution

• long-term process, but intermediate results

Paradigm shift :machine model => living organism model building a machine => nurturing players and conditions

Local actors

Small organisations

R.O. Univ.

P.A. Gov.

Cooperative effort : among local actors (gov, biz, uni-res) among EU regions

How to foster this change of paradigm ?

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Lessons from the living worldIs built on composition and complex hierarchies

No central control, no plans defined in advance

Fault tolerant:No central point of failure, just viability concept

Diversity and autonomy (recursive)

Adaptationto the local conditions

Selection and evolution

But you need an infrastructure supporting the life (composed of living organisms too - rec. concept), and a critical mass of individuals and biodiversity (bootstrap problem)

But This infrastructure determines/shapes the potential evolutionary paths (regulation)

© ecosystems

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Dynamic composability for evolution

A digital component is made by components (“lego” approach) which:

are distributed

should change for allowing evolution

all elements could switch and change (sw, modality of usage, protocols)

Reusability of existing initiatives (web services, GRID services, semantic web) protocols

=> adaptation to local conditions

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The digital ecosystem

Which ICT infrastructure for this new paradigm ?How could ICT support the transition from industrial district to knowledge-based business ecosystem ?

Computingand telecom.Infrastructure

Diffused + Formalised knowledge

OSservice-oriented

architecture

vision, new

paradigms

How to create ICT infrastructure that allows digital components to exhibit natural behaviour

Visionary approach + intermediate results

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Peculiar approach promoted by DG INFSO/D5Focus on regional development and local identitiesFosters enterprise dynamic cooperation and knowledge sharingDevelops enabling technologies + support deployment of interconnected network of digital ecosystemsSupport network for SMEs (knowledge, practices, services), provides equal opportunities of access (mitigates digital divides)Pervasive common infrastructure (which also evolves), open source and community principles No central control, no point of failure, no dominant position, no pre-defined business modelVariety of digital ecosystems, self-adapting to local conditionsThe “digital environment” is populated by “digital species” with their business model and descriptionThe environment enables species to behave like species in the natural world

InteractsExpresses an independent behaviourEvolves – or become extinct – following adaptation

Digital Ecosystem Vision: a new “digital common”

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What is a Digital Ecosystem ? •THE DIGITAL ECOSYSTEM

•is a pervasive “digital environment”

•that supports the business ecosystems

•that is populated by “digital components”

•that evolves and adapts to local conditions with the evolution of the components

THE “SOFT” SUPPORT INFRASTRUCTURE, WHICH MEDIATES

SERVICES & INFORMATION (knowledge)EMPOWERING THE NETWORKING

AND THEIR SHARING

architecture /

structure

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What is a Digital Component ?•DIGITAL COMPONENTS

•could be: software components, applications, services, knowledge, business processes and models, training modules, contractual frameworks, laws ...

•.... and hopefully a mixture of all these

formalised knowledge

A USEFUL IDEA, EXPRESSED IN A LANGUAGE

(formal or natural), LAUNCHED ON THE NET,

WHICH CAN BE PROCESSED (by computers and/or

humans)

©XPLANE

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A systemic approach to enterprises global collaboration

open-source, public, distributed pervasive environment - spontaneous evolution, adaptation and composition of services, digital content and sw components - embedding biz rules, revenue models, ontology...

Derivative work from Salzburg Technical University

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A representation of the digital ecosystem

Adaptive, pervasive, self- organis/evolv. infrastructure

Services and processes

Semantics

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Knowledge Economy

DBE

Research issues in Digital Business Ecosystem

Business Ecosystems and Regional EconomiesOpen source bizmodels,

commun. Process,business ecosys.

FormalisedBasic Models and Services

Execution environment“life support structure”

Digital Ecosystem

Open-source service- and knowldege-oriented infrastructure

Dinamic,Adaptive,

Selt-organisingInfrastructure

Potentisal FP7Research

areas

Semantics ofservices

Syntax of economicbehaviour

Business rulesand

Regulatory Framework

Formalisation ofKnowledge

(Languages)

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ICTscatalyse

improve

improve

New organizational& business models

Policysupports

The Digital Ecosystem integrated approach

“Digital Ecosystem Infrastructure”

Derivative work from

P.Dini - London School of Economics

to reduce the digital divides- among regions- among SME and LEto foster local economic growth and innovation; new forms of dynamic businessinteractions:enabled bydigitalecosystemtechnologies

Growth

Competitiveness, market & internal

efficiency

Cooperation &innovation networks

improve

lead to

encourage

provideresources

Open SourceEvolutionary infrastructure

makeviable

shape& foster

supports

supportBiology

enhances

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Local Business Ecosystemco-funded by DBE project

Local Business Ecosystemjoined as new pilot

Potential future take-uplocal ecosystems

Digital Ecosystem: pilot regions (June 2005)

THE CRACOW DECLARATION

ON LOCAL AGENDA i2010 IN EUROPE AND THE PROMOTION OFDIGITAL SOLIDARITY AMONG THE CITIES OF THE WORLD

i2010 Local AgendaGoal 6 – Digital ecosystems and training centresEach Local and Regional Authority will promote the creation of digital ecosystems within their territory.

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Elements of debate IRole of Embedded Knowledge in

ecosystems Keystone organisations and Glocalisation

In the classical industrial districts a tissue of similar and complementary industries became the engines of regional economic growth

Tacit and explicit knowledge was embedded in the territory; Now in a knowledge-based economy the role of knowledge is even more crucial

ICTs promise to provide a similar repository of knowledge that supports economic growth and social development, but they must be able to capture, formalise and retain knowledge so that it can remain a public good at the sectoral and regional level

The digital ecosystems provide such a public good in the form of an adaptive environment that retains and distributes glocally the knowledge created

Because the knowledge of digital ecosystems, is diffused in the territory: in the human capital and in the network of small firms and in the business and social networks, it cannot be moved

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Elements of debate IIHow the Ecosystems differ?

http://www.digital-ecosystems.orghttp://www.digital-ecosystems.org

The EU vs US approach and visionThe EU vs US approach and vision due to ~= socio-econ. structure ? (SMEs, few keystone, diversity):

generate dependencies, risks? Different culture/regul. (swpat)

The SAP case:The SAP case:SAP: A Sea Change In SoftwareThe German legend's move into Lego-like modules could revolutionize the way companies do softwareSAP builds a new ecosystem around NetWeaver, SAP. Thousands of independent developers could start writing specialized programs that plug into the NetWeaver frameworkInstead of waiting years between humongous software releases, there can be what the company calls a constant "conveyor belt" of improvements. Like Microsoft Windows on desktop PCs and servers, NetWeaver could define an industry standard for creating new business applications..

Documents

May 2005 Digital Business Ecosystems: ICT in support of Lisbon Agenda F. Nachira European Commission DG-INFSO - Unit “ICT for Enterprise Networking” Head