ABSTRACT
This chapter draws on Service-dominant (S-D) logic to examine innovation processes at multiple levels of aggregation, considering technological innovation, business model innovation, and, ultimately, market innovation. It suggests there is a need to rethink markets by viewing them as ecosystems, comprising multiple heterogeneous actors (i.e., customers, firms, and other stakeholders). These actors learn, discover, and acquire information from other actors in the system, and collectively generate markets through the practices they perform. Market systems, and the actors embedded within them, are governed by constraining institutional arrangements, both formal and informal, that dictate the rules and norms for how value co-creation activities can be coordinated. However, these same institutional arrangements also provide the rules and norms that enable actors to attempt to innovate incumbent technologies or practices. For any new technology to become accepted as an innovation it must become institutionalized. Likewise, as incumbent practices become deinstitutionalized, disruption is said to occur. Hence, processes of (de)institutionalization within socially embedded ecosystems are critical to understanding innovation processes of different types and contexts.
