Digital transformation of business ecosystems: Evidence from the Korean pop industry

Abstract

Abstract The notion of business ecosystems is gaining prominence among academics and practitioners. Scholars advise that business ecosystems are inherently fluid, unbounded and amorphous and thus that their boundaries can shift. Practitioners further suggest that business ecosystems are characterised by inter‐network – as opposed to inter‐firm – competition, and, moreover, that they are mainly driven by technological advancements. And yet few studies examine the role of information technology (IT) in driving boundary practices that enable the formation and transformation of business ecosystems. Through an in‐depth case study of technology‐enabled transformations within the Korean pop music (K‐pop) industry, our study examines how the digital transformation of business ecosystems unfolded. Our study contributes to the emergent body of knowledge on business ecosystems in a number of ways. Our investigations uncover the conditions under which the constituent firms operate and analyse the role of IT and its implications on new organisational forms. From our analysis, we present a framework that reveals insights on critical boundary practices and formative strategies for digital business ecosystems. We illustrate how these boundary practices drive industry change, from a largely linear content delivery system resembling a value chain to a new value network of co‐specialisation and self‐organisation among firms in a new digital business ecosystem.