Insights

Creating an Invention Ecosystem

December 22, 2010

Creating a market for intellectual property (IP) was one of our clear goals in founding Intellectual Ventures. We saw an opportunity to develop a system of buyers and sellers setting value for intellectual assets through open competitive markets where none had existed before. In just a few years this market, and IV, have grown faster than we’d ever imagined they would.

But in addition to buyers and sellers, an IP market needs to be fed by a continual stream of innovative ideas. That’s why, from the outset, IV has also focused on creating an ecosystem of invention: a stable and dynamic community of participants interacting with one another and their environment to produce useful and valuable inventions.

A business strategist named James F. Moore first applied the biological term “ecosystem” to business in 1993, in an article he wrote for the Harvard Business Review. Moore also described a special type of ecosystem relevant to our purposes: a keystone ecosystem, in which one very large player has a key stabilizing and defining role in the ecosystem itself and in the growth of other ”organisms.” The ecosystem model emphasizes the interdependence of its members. The health of each participant depends on the health of the other members, and in particular the health of the keystone. Likewise the keystone player gets critical support from the goods and services provided by its partners, producers, and suppliers.

At IV, we want to encourage a stable and dynamic ecosystem of invention. If you’re interested in learning more about the ecosystem business model, I recommend a book co-authored by one of IV’s inventors and program managers, Roy Levien: The Keystone Advantage: What the New Dynamics of Business Ecosystems Mean for Strategy, Innovation, and Sustainability.

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