Living lab business model: towards a sustainable innovation ecosystem

Public living labs, as multi-stakeholder ecosystems, play a principal role in
delivering “public value” by leveraging (open) innovation processes. However, a
significant number of public living labs are not sustainable, in effect, they fail to
create a viable innovation ecosystem. The problem is that presence of a holistic
business model which effectively coordinates the efforts of all heterogenous
stakeholders in the ecosystem and focuses on value creation at “ecosystem level” is
missing. Drawing on field studies of three public living lab innovation ecosystems in
the Netherlands, we could develop a holistic and multi-perspective business model
in which “ecosystem” is considered as the reference point; including all
heterogenous stakeholders, their interdependent activities and the links between
them (BM structure). As such, we could introduce “collaborative portfolio
management” combined with “challenge-based cocreation” as a method for
effective coordination of heterogenous actors in the ecosystem. We also identified
that “lock-in” (due to dependencies and interdependencies), which is created by this
method, can facilitate not only the process of value creation at ecosystem level, but
also value capturing for all involved stakeholders.