Interconnected nodes forming a business ecosystem

Ecosystem Economics: How to Thrive in Collaborative Business Networks

Nico Varela in Business & Economy December 2025 • 4 min read.

"Unlock the Power of Collaborative Commerce: A Deep Dive into Ecosystem Feasibility and Transaction Costs"

In today's dynamic business landscape, the concept of ecosystems—networks of interconnected organizations—is gaining significant traction. These ecosystems promise increased flexibility, innovation, and the ability to tackle complex challenges that individual companies struggle to address alone. But how can businesses ensure that these collaborative ventures are economically viable and sustainable?

Traditional economic models often fall short when analyzing ecosystems, which exist in a gray area between traditional hierarchies (firms) and open markets. This necessitates a fresh approach that considers the unique characteristics of these networks, including the costs of transactions, the creation of shared value, and the incentives of various participants.

This article dives into the economic feasibility of business ecosystems, drawing from formal economic theory and real-world examples. It explores key concepts such as transaction cost analysis, service-dominant logic, and network stability to provide a comprehensive framework for understanding and optimizing these collaborative structures.

Understanding Ecosystem Economics: What Drives a Successful Collaboration?

Interconnected nodes forming a business ecosystem

Ecosystems are more than just collections of companies; they are carefully aligned networks where participants rely on each other to deliver a cohesive value proposition. This requires a shift in perspective from viewing transactions as simple exchanges to recognizing the co-creation of value among all involved parties. Several factors underpin a successful ecosystem:

Here are the factors

Flexibility and Innovation: Ecosystems allow companies to tap into external expertise and resources, fostering innovation and adaptability in rapidly changing markets.
Shared Value Creation: Participants collaborate to create value that exceeds what they could achieve individually, leading to mutual benefits and increased overall profitability.
Reduced Transaction Costs: Effective ecosystems minimize the costs associated with finding partners, negotiating agreements, and enforcing contracts, streamlining operations and improving efficiency.
Network Stability: A stable ecosystem attracts more participants and fosters long-term relationships, creating a virtuous cycle of growth and resilience.

Transaction costs play a crucial role in determining the feasibility of an ecosystem. These costs encompass not only the direct expenses of a transaction but also the time, effort, and potential risks involved in finding partners, negotiating contracts, and ensuring compliance. To thrive, an ecosystem must offer a way to reduce these transaction costs compared to traditional market arrangements.

Building a Collaborative Future: The Power of Ecosystem Economics

As businesses navigate an increasingly complex and interconnected world, the principles of ecosystem economics offer a valuable roadmap for success. By understanding the dynamics of collaboration, minimizing transaction costs, and fostering value co-creation, organizations can unlock new opportunities for growth, innovation, and sustainable competitive advantage. The future of business is collaborative, and those who embrace the power of ecosystems will be best positioned to thrive in the years to come.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2310.03157,

Title: A Formal Transaction Cost-Based Analysis Of The Economic Feasibility Of Ecosystems

Subject: econ.th

Authors: Christoph F. Strnadl

Published: 04-10-2023

Everything You Need To Know

What advantages do businesses gain by participating in collaborative ecosystems compared to traditional business models?

Participating in collaborative ecosystems offers several advantages over traditional business models. Ecosystems foster flexibility and innovation by allowing companies to access external expertise and resources. They also facilitate shared value creation, where participants collaborate to generate value that exceeds what they could achieve individually, leading to mutual benefits and increased profitability. Furthermore, effective ecosystems reduce transaction costs associated with finding partners and negotiating agreements, streamlining operations and improving efficiency. Finally, network stability within an ecosystem attracts more participants and fosters long-term relationships, creating a cycle of growth and resilience.

How does 'transaction cost analysis' contribute to understanding the economic viability of a business ecosystem?

Transaction cost analysis is crucial for evaluating the economic viability of a business ecosystem. It examines the costs associated with participating in the ecosystem, including the expenses, time, effort, and potential risks involved in finding partners, negotiating contracts, and ensuring compliance. For an ecosystem to be feasible, it must provide mechanisms to reduce these transaction costs compared to traditional market arrangements. By minimizing transaction costs, an ecosystem can improve efficiency and attract more participants, enhancing its overall economic sustainability. The concept ensures companies don't spend more interacting than producing, increasing the likelihood of success.

In the context of ecosystem economics, what does 'shared value creation' entail, and why is it important for the sustainability of the ecosystem?

In ecosystem economics, 'shared value creation' means that participants collaborate to generate value that exceeds what they could achieve individually. This goes beyond simple transactions; it involves the co-creation of value among all involved parties. Shared value creation is crucial for the sustainability of an ecosystem because it ensures that all participants benefit from their involvement. When each member gains more value from the ecosystem than they would independently, they are more likely to remain committed, fostering long-term relationships and overall ecosystem stability. This mutual benefit incentivizes continuous participation and investment, leading to a more resilient and thriving collaborative network.

What role does 'network stability' play in the long-term success and growth of a business ecosystem?

Network stability is vital for the long-term success and growth of a business ecosystem. A stable ecosystem attracts more participants and fosters enduring relationships, creating a virtuous cycle of growth and resilience. When an ecosystem is stable, members feel confident in their partnerships and are more likely to invest in the network's future. This stability reduces uncertainty and encourages further collaboration, leading to greater innovation and value creation. Without network stability, the ecosystem may struggle to attract and retain participants, hindering its ability to thrive and achieve its full potential.

How can understanding the principles of 'service-dominant logic' help businesses optimize their participation and contributions within an ecosystem?

Understanding the principles of 'service-dominant logic' helps businesses optimize their participation and contributions within an ecosystem by shifting the focus from traditional product-centric views to a service-oriented approach. Service-dominant logic emphasizes the co-creation of value between all participants, recognizing that value is not simply delivered by one party but jointly created through interactions and collaborations. By adopting this perspective, businesses can better understand how their capabilities and resources contribute to the overall value proposition of the ecosystem and identify opportunities for enhancing their role in the value creation process. This ultimately leads to more effective collaboration, improved resource utilization, and greater overall success within the collaborative network. Note, this logic is not covered directly, but is implied as ecosystem thrives on value creation among participants.