Digital globalization is transforming innovation in multinationals, but opposing localization forces, such as trade restrictions and nationalism, are limiting the portability of digital assets and raising innovation uncertainty and risk. This creates a challenging context for multinationals. To meet the challenge, they can use four approaches to better calibrate the connectivity of their innovation sources and assets.

Success in business ecosystems that include well-established companies and new ventures requires collaboration and competition, a task that demands strategic thinking to leverage a firm's resources and capabilities. Strategic thinking and the entrepreneurial activities in an ecosystem influence one another in a cycle that perpetuates and even sparks innovation. These interactions vary significantly across four types of business ecosystems-Orchestra, Creative Bazaar, Jam Central, and Mod Station-and determine the success and failures of new ventures and established companies. The nature and effect of the dynamic interactions in a business ecosystem can have profound implications for organizational success.

Many companies have established technology-based platforms or virtual customer environments to partner with their customers in innovation and value creation. In pursuing such initiatives, most companies seem to focus primarily on customers' innovative contributions, paying less attention to customers' interaction experiences in the VCE. But the VCE experience has more profound implications--particularly for customer relationship management. In this article, the authors offer a framework to help companies understand and evaluate customers' VCE experience profile. The authors describe five customer roles in innovation and value co-creation: product conceptualizer, product designer, product tester, product support specialist and product marketer. Each role has something to offer. However, depending on the customer innovation role, the nature of the customer interactions and the technologies used in the VCE will vary. The VCE customer experience has four components: the pragmatic experience (its ability to provide information), the sociability experience (how it promotes group discussion), the usability experience (defined by the quality of the human-computer interactions) and the hedonic experience (relating to mental stimulation and entertainment). Drawing on examples from Microsoft, SAP, Samsung, BMW, Volvo and Ducati, the authors suggest strategies and practices to enhance customer experiences in VCEs and ensure favorable outcomes in terms of innovation management and CRM. Designing and implementing the right system can help companies improve innovation and CRM. Therefore, managers should view their VCE initiatives as an integral part of their overall innovation and customer strategies. What's more, the costs of implementation can vary widely. Therefore, companies need to be careful about selecting and implementing a portfolio of strategies and practices that meets the needs of the types of customer they want to engage in value co-creation.

Companies seeking new ideas or product concepts from outside sources may find the "innovation bazaar," with its wide array of choices and methods of acquiring them, a confusing, chaotic place. Nambisan and Sawhney have crafted a conceptual guide for managers who understand the importance of going outside their firms for innovation but are uncertain about how to do it. The authors' "external sourcing continuum" shows at a glance how shopping for, say, raw ideas compares with shopping for market-ready products in terms of cost, risk, multiplicity of options, and speed of commercialization. Raw ideas, whether acquired directly from the inventor or through a patent broker, licensing agent, or some other intermediary, tend to be low cost but high risk and take a long time to bring to market. Market-ready products, often acquired as stand-alone businesses through a venture capitalist or business incubator, are more expensive and narrow one's choices, but they can be launched quickly and with less risk. Between these two approaches lies a third, facilitated by the "innovation capitalist." This new kind of intermediary provides client companies with access to a broad range of innovative product or technology ideas that are nearly market ready, thereby mitigating early-stage risks and lowering the time to market without significantly increasing acquisition costs. The authors compare the advantages and disadvantages of using intermediaries associated with the three approaches and provide a checklist of factors to consider when placing your company on the external sourcing continuum. If you've been oriented toward one end of the continuum or the other, you can increase your options and your flexibility by expanding into the middle.

Large firms puzzling over whether to pay for developed technology or take a risk on bleeding-edge concepts now have a third choice--a new kind of "innomediary" that identifies and refines innovations, reducing market risk in return for a share in the potential rewards.