A business ecosystem is a term used in evolutionary economics to describe the set of factors that contribute to the success or failure of a business, including partner companies, competitors, laws, employees, resources, and the environment. This field uses the metaphor of life and the ecosystem to explain financial principles and understand economic changes, examining the interactions of the components of a business ecosystem and how those interactions change the ecosystem as a whole. The Earth is considered part of the economic ecosystem, and changes in each part of the system affect many connected parts of an economic network.
A business ecosystem is an idea used to describe the set of factors, in nature and in business, that contribute to the success or failure of a business. The term appears most often in the fields of evolutionary economics, also called ecological economics, which is a field focused on comparing businesses and life forms to the systems found in the natural environment.
Evolutionary economics sees business as a form of life created for the purpose of making a profit. This field uses the metaphor of life and the ecosystem to explain financial principles and understand economic changes. Complex in structure, a business ecosystem is made up of many parts, including partner companies and organizations, in-field competitors, and laws and government, as well as employees, contractors, resource availability, and the condition of the land and environment.
Evolutionary economics examines the interactions of the components of a business ecosystem, how ecosystem components tend to affect other parts of the ecosystem, and how those interactions change the business ecosystem as a whole. Many theories presented in evolutionary economics are at odds with classical and neoclassical economic theories, according to which the free market automatically works to improve itself for the good of the people. Proponents of the commercial ecosystem metaphor used in evolutionary economics argue that an economic system as a whole does not achieve a greater purpose. This means that because companies are fighting for a chunk of available resources, they aren’t necessarily working together for the greater good.
Companies generally have to work together to coordinate the production, marketing and distribution of products and services. As the for-profit form of life forms in a corporate ecosystem, companies must compete for the resources they need to keep the business alive and profitable. Resources can include land space, the materials needed to make a product, or the money needed to keep the business going. Companies working in the same market have to compete for customers as a resource.
In evolutionary economics, the Earth is considered part of the economic ecosystem along with the societies. Changes in each part of the system affect many connected parts of an economic network. As corporate actions begin to affect the environment, with pollution, oil spills, deforestation, and resource depletion, changes in the environment will cause corporate changes that impact the financial economy. If a fishing company overtakes an area of the ocean and causes the fish to disappear, even for a while, the disappearance of the fish will impact the economy of a vast chain of interdependent businesses, extending from fishermen, fish sellers and grocery stores to food producers, restaurants and food consumers.
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