The emergence and evolution of innovation ecosystems: Evidence from the solar PV ecosystem

Research Summary Research underscores the importance of innovation ecosystems—or the larger group of firms producing components and complements—to the ability of focal firms to create value with an innovation. However, how ecosystems emerge and evolve remains unexplored. In a question‐based examination of the solar photovoltaic ecosystem, we observe that ecosystems emerge earlier than predicted through the “transfer” of ecosystem elements, in a process of “re‐specialization,” and ecosystem roles from adjacent ecosystems. Second, the larger ecosystem has a unique life cycle, expanding while the focal industry contracts. Third, variance in institutional regime logic and orientation shapes where and how ecosystems evolve. Finally, bottlenecks shape ecosystem evolution, leading to an expansion in the bottleneck element through both new entry and migration from other ecosystem areas. Managerial Abstract Innovation ecosystems, or the larger group of firms producing components and complements, play a pivotal role in the ability of firms to create value with an innovation. In a question‐based study of the solar photovoltaic ecosystem, we observe that ecosystems emerge much earlier than predicted, as firms in adjacent ecosystems “transfer” ecosystem elements through a process of “re‐specialization,” and ecosystem roles. Second, the larger ecosystem has a unique life cycle, expanding while the focal industry contracts. Third, differences in institutional support—specifically product innovation versus process scaling logic and short versus long‐term orientation—shape where and how ecosystems evolve. Finally, bottlenecks shape ecosystem evolution, leading to an expansion in the bottleneck element through both new entry and migration from other ecosystem areas.