New research offers managers a framework for understanding who wins in AI ecosystems and why

An article published in the Strategic Management Journal, "Value Creation in Innovation Ecosystems," by Ron Adner and Rahul Kapoor, offers a valuable framework for understanding competitive advantage in today's rapidly evolving AI landscape. While debates about AI often focus on models, products, or spending races among technology giants, the research suggests that success depends less on any single innovation and more on how effectively firms orchestrate the broader ecosystem surrounding it.

The article examines how value is created and captured across innovation ecosystems, highlighting the interdependent relationships among technology leaders, suppliers, and complementary products and services. Although originally published in 2010, the framework provides important insights for understanding current competition among AI Hyperscalers such as Amazon, Microsoft, Google, and Meta.

The researchers developed the framework to explain why some firms successfully capitalize on technological advances while others struggle, even when they possess strong products or capabilities. Rather than viewing innovation as the achievement of a single company, Adner and Kapoor argue that success depends on the readiness and performance of the entire ecosystem that supports a technology.

The framework suggests that the firms that ultimately succeed may not be those with the most advanced technology, but those that most effectively coordinate the ecosystem required to make that technology valuable. They may be the firms that most effectively coordinate the ecosystem required to make that technology valuable.”

For managers, the research offers three practical strategic questions: Where are the ecosystem's bottlenecks? Is the firm's innovation trajectory aligned with the readiness of the broader ecosystem? And which activities should be vertically integrated to create sustainable advantage?

For business leaders navigating AI investments, the study shifts attention away from individual technologies and toward ecosystem orchestration. Understanding how suppliers, partners, and complementary innovations evolve alongside core technologies may be as important as developing the technologies themselves.

To read the full context of the study and its framework, access the full paper available in the Strategic Management Journal.

About the Strategic Management Society

The Strategic Management Society (SMS) is the leading global member organization fostering and supporting rigorous and practice-engaged strategic management research. SMS enjoys the support of 3,000 members, representing more than 1,100 institutions and companies in more than 70 countries. SMS publishes three leading academic journals in partnership with Wiley: Strategic Management Journal, Strategic Entrepreneurship Journal, and Global Strategy Journal. These journals publish top-quality work applicable to researchers and practitioners with complementary access for all SMS Members. The SMS Explorer offers the latest insights and takeaways from the SMS Journals for business practitioners, consultants, and academics.

Click here to subscribe to the monthly SMS Explorer newsletter.

Click here to learn more about the programs and opportunities SMS has to offer.