Taming Complexity in Business Ecosystems: Investigating the Role of Platforms.

Successfully innovating in business ecosystems requires firms to tame the complexity in their competitive environment. Firms must be generative enough to meet dynamically changing customer needs and reap profitability from their innovation efforts. Platforms promise to foster both generativity and profitability through their offered capabilities. Employing an agent-based simulation approach in modeling a platform within its ecosystem, we analyze the effectiveness of platform capabilities under varying conditions. We find complexity in the ecosystems to be a contingency for generativity and profitability effects of platforms. When complexity is low, firms are able to successfully innovate on their own without help from platforms. As complexity increases to medium and high levels, however, firms face higher adaptive tension and platform capabilities become more desirable and effective to generate profitable innovations. We thereby challenge the assumption of platforms being disruptive to all types of environments and delineate under which conditions platforms help taming complexity. [ABSTRACT FROM AUTHOR]