Modularization of Activities in Ecosystems and Business Models

This theoretical paper integrates ecosystems and business models as teleologically related concepts on two different levels of observation: cross-firm and cross-industrial activity systems. Drawing on modularity theory I argue that succumbing to advantages of specialization and integration, and on the premise that coordination technology is in place, industries increasingly evolve towards ecosystems comprised of very fine-tuned mutually dependent business models, incorporating both advantages that prior came at the expense of one another. The paper develops a framework to help researchers and practitioners identify and anticipate modularization of value activities in ecosystems and business models.