Digital Economy Success Factor #3: Collaborative Innovations

April 14, 2016

By Lindsey Anderson and Irving Wladawsky-Berger

(Part 3 of 4, originally published on

For several years now digital has been an appendage to “business as usual.” But recently, digital transformations have reached the tipping point where digital has become “business as usual”; the tail has become the dog. Digital is not just part of the economy — it is the economy.

It’s an economy of limitless opportunities for some and disruption and displacement for others. Many firms — such has Kodak, Blockbuster, Sears, and Blackberry — were unable to adapt, while others are thriving. According to MIT Sloan research, the companies that are adapting to a digital world are 26% more profitable than their industry peers.

How are these thriving firms reinventing themselves, their supply chains, and their marketplaces? For an upcoming MIT symposium on the topic, we’re focusing on four main themes: customer expectations, product enhancements, collaborative innovations, and organizational forms.

Collaborative Innovations

Companies must become more innovative to better respond to the highly competitive, global business environment. Collaboration is indispensable for innovation, both within the company’s own boundaries and beyond, with customers, partners, startups, universities, and research communities.

Thriving companies are harnessing collaborative digital networks to build ecosystems, such as Amazon, PayPal, Fidelity, Aetna, Apple, and Microsoft. Ecosystems like these are moving beyond linear supply chains to partner with providers of complementary products and services (or sometimes even competitors). According to MIT research, companies with 50% or more of their revenues from digital ecosystems have higher revenues and higher profit margins than their industry’s average.

Collaboration and ecosystems are particularly important in the emerging Internet of Things, where multiple companies across different industries must make sure that their offerings work with each other in a number of highly complex areas including health care, home automation, and smart cities.

Companies such as AUDI, Club Med, and mBank are competing with digital innovations by empowering local teams to build solutions quickly while helping them identify and leverage synergies. These companies are also creating accessible and reusable global platform components that give local solutions competitive advantages while at the same time coaching local teams in designing and learning from experiments.

Part 2: Product Enhancements