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1 Introduction

The aim of this book is to contribute to the literature on innovation studies with new findings from biogenetics that are becoming increasingly important. In particular, we will discuss the new analytic frameworks that may open as a result of the incorporation of epigenetics in evolutionary economic thinking. The book introduces a new approach to the study of business dynamics, namely Epigenetic Economic Dynamics. The concept of Epigenetic Economic Dynamics (EED) is defined as the study of the (epigenetic) dynamics generated as a result of the adaptation of organizations to major changes in their respective environments (Gómez-Uranga et al. 2014).

We are witnessing a very rapid development of mobile telephone-related sectors and technologies on the Internet in recent years. The exponential growth of users puts such pressure on the demand that it leads to major changes in the dynamics of the environment, prompting a huge business and thousands of new user applications. A few groups dominate this fast paced panorama (i.e., Apple, Google, Microsoft, Facebook, Amazon, Samsung, Alibaba to mention a few), with their behavior determining the direction and intensity of global dynamics. The book also explores a related technological domain, the one involving 4G technology providers, namely large telecom operators (i.e., carriers). This book centers on finding how we can understand these dynamics and thus have a clearer view of their evolution. With that, we shed light on the dynamics of business groups, which we approach as “business ecosystems” (Moore 2005; Razavi et al. 2010).

4G technology is revolutionizing the evolution of the Internet, which in turn has very important consequences on various aspects. First of all, the need to allow the movement of large masses of information implies on the one hand that all platforms must meet and conform to these requirements, while on the other hand, large telecom operators (i.e., carriers) need to offer network infrastructures able to support exponential increases in the amount of data under circulation. Second, and as a consequence, there is an increasing need to develop new standards that allow the previous context to develop, which in turn generates new patenting dynamics by the main business groups, both in the telecommunications sector and in the business groups that operate on the Internet. It is worth noting the very dissimilar dynamics that are being observed in the different geographical regions (i.e., groups of countries) in relation to the time of implementation of 4G technology. For example, if Japan or the United States is compared with Europe, in the former, there is a much larger deployment of these technologies. In this regard, “wobbling” dynamics can be observed in the deployment of adequate networks by telecommunication operators and Chinese Internet groups.

Epigenetics, in the field of molecular biology, has shown the phenotype can vary as a result of long-term and short-term adaptation (Francis 2011; Carey 2012). The EED approach, created to explain dynamics observed in highly dynamic environments, also considers that some decisions are or need to be formulated in other stable environments. As the book discusses, the decision-making processes that aim at guaranteeing adaptation and survival in both short-term (radical adaptation) and long-term (gradual adaptation) show different characteristics.

The EED approach enables us to understand how the dynamics of the large Internet industry groups mentioned address and respond to changes in their environments. Second, it is also useful when analyzing the results of these dynamics. Abnormalities, malfunctions or obstacles to innovation, and/or blockage to developing competition at certain levels (i.e., intellectual property rights, abuse of monopoly power, etc.) may arise as a result of the influence of epigenetic dynamics. Acquisition of patent portfolios and patent lawsuits for infringements and violations is one of these malfunctions or consequences. These are particularly quite common, for example in the field of mobile telephony, which clearly shows the fierce competition between business groups (Graham and Vishnubhakat 2013). Essential patent licensing is particularly at the core of legal disputes between the business groups (Allekote and Blumenröder 2010).

The book allows increasing the ability to capture through a coherent and consistent model the dynamics and changes, particularly in relatively short periods of time (i.e., highly dynamic environments), which are those occurring within and between the main business groups operating on the Internet, as well as within and between telecom operators (i.e., telecom carriers). It also provides a better understanding of the rapid change dynamics that are taking place in big Internet industry groups.

The first contribution of the EED approach stems from the fact that the dynamics that are shaping actions through decision would be partially unpredictable, based on a rational and logical path, and might be even mathematically “apprehended” (i.e., through probabilistic models). These characteristics related to unpredictability are not, however, exclusive to the concept of EED. Despite the origin of the methodological framework of the EED relies on a biological analogy to evolutionary economics through the concept of epigenetics, where genes, initially, not only determine the evolution of life (Jablonka and Lamb 2005), similar arguments are also to be found in other disciplines: for example, in the theories of irreversibility (i.e., in environmental sciences), in models of the chaos theory or in economic models with high uncertainty.

Second, the decision-making processes that (may) allow the adaptation to the environment are reflected in epigenetic dynamics, which could not be predicted in response to the original behavior of organizations, or the existing path (i.e., path dependence) in the territory these are based. Therefore, the EED approach may provide a useful concept, which could also be easily applicable in other contexts (sectoral, regional, organizational), as long as it would be possible to identify their epigenetic dynamics. The more dynamic the environment is, (organizational and territorial) dynamics would also be shown as being more breakthrough and falling outside the normal process of gradual evolution that evolutionary economics would predict. This would mean that organizations should in some cases face risks that may result from entering new paths that would seem unrecognizable in relation to their past behavior (i.e., radical adaptation). For example, adopting absolutely novel technologies, finding partners from unrelated geographical areas and sectors, or making acquisitions of assets of all types (i.e., buying companies, buying patent portfolios, attracting talent) as mechanisms to ensure the adaptation to convulse environments.

Third, the researcher who may be interested in using the analytical framework of the EED would need some “sensors” or “seismographs” that allow capturing the emergence of new highly dynamic environments, organizations or even areas of activity, where very sudden and abrupt movements are taking place (e.g., equivalent to having a device to measure the intensity of an earthquake).

Finally, compared to other (non-epigenetic) analog models, the EED approach integrates and allows observing, analyzing, and assessing the potential economic, social, institutional, and even moral consequences of the significant changes arising from the adoption of these epigenetic dynamics. Certain methodological proposals can be derived from the EED approach, which would make it possible to use it in other industries:

  1. 1.

    Adaptation to rapid change in business environments may give rise to epigenetic dynamics. Some of the factors that change in the environment may be related to some environmental factors such as disruptive innovations or changes in techno-scientific paradigms.

  2. 2.

    Epigenetic dynamics in business groups cannot be recognized or foreseen in the initial stages of their evolution.

  3. 3.

    Considering these groups as ecosystems, and evolution from the EED perspective are compatible.

  4. 4.

    A large part of epigenetic dynamics comes from the groups’ external relations, such as purchasing external assets, which occurs in the case of patents.

  5. 5.

    Some epigenetic dynamics generate consequences.

  6. 6.

    The consequences call for regulatory intervention, antitrust commissions, better agencies (such as patent offices), public intervention, etc.

  7. 7.

    The consequences can sometimes affect the epigenetic dynamics themselves. For example, excessive patent distortion can lead to changes in patent laws and prevent certain practices.

Although the book is centered on the study of epigenetic dynamics and their consequences, we are aware that the systemic effects of these dynamics are much broader than patents and should also include other areas such as law, regulations, institutions, and even the moral sphere. These additional systemic implications could be studied in future research conducted on this business environment as well as in other areas distinctive for their drastic and rapid changes.

This book may also make it easier to forecast future dynamics on the Internet by proving that a sizeable number of big business groups are veering from their initial paths to take unheard of new directions due to pressure from the competition. This obliges each of these groups to move into very different fields of innovation, using their ability to capture resources and external competences (from other companies).

The book aims to complement existing approaches in the field of evolutionary economics, which are mainly based on the principle of gradual adaptation and natural selection, by introducing the concept of EED. We would like to highlight its theoretical and conceptual nature which aims to contribute to recent work based on evolutionary economics, mainly from the perspective of generalized Darwinism (Aldrich et al. 2008), resilience (Boschma 2015), and related variety (Frenken et al. 2007). The view of the generalized Darwinism relies on the principles of retention, selection, and variety, as vehicles to achieve adaptation (Levinthal and Marino 2013). Therefore, under this perspective adaptation takes place in long-term horizons, through slow and moderate adaptation processes. We believe the book can complement the work conducted by scholars on evolutionary economics (Witt 2014) by applying the analytical framework of EED we put forth.

From our point of view, the field of evolutionary economics could be further complemented with findings emanating from other disciplines such as systems theory, complexity theory, biology, and ecology. Our book is therefore a first step in this direction. It also opens new research horizons and opportunities for scholarship in adjacent areas which will have to be addressed in future research. However, we deem necessary to develop an integral and holistic theory that allows to better link the different streams of research that can help supplement and reinforce the principles of evolutionary economics. Figure 1 illustrates how the book may complement to, be compatible with and show an ability to adapt to particular domains that are increasingly being developed within the field of evolutionary economics. In our view, new theoretical developments such as the EED approach complement, are compatible with and show an ability to adapt the field of evolutionary economics into the highly dynamic environments that are dominating the current economic context.

Fig. 1
figure 1

New research horizons that may open as a result of the EED approach. Source Own elaboration

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As shown in Fig. 1, we believe that the contribution outlined by the EED concept may be of interest not only for scholars in the field of evolutionary economics, but also in other related areas such as economic geography, the literature on technology and sustainability transitions, or the research and practice on innovation management (Tidd 2001; Cetindamar et al. 2009) and strategic management (Suárez et al. 2015) through the concepts of dynamic capabilities (Teece et al. 1997; Teece 2012; Eisenhardt and Martin 2000) and organizational routines (Feldman and Pentland 2003). We find certain alignment with some of the developments that are currently taking place and some of the analogies being introduced in the field of environmental sciences in general, and in economic geography in particular. The methodological tools which are normally used in spatial economics and evolutionary economic geography (Boschma and Martin 2007; Martin and Sunley 2007) could be reinforced by the EED approach. It could be useful to explain situations in which the different spaces (national, regional, and local) have to face drastic changes in their environments and in which decision makers would have to implement both short and long term strategies. However, we would also like to emphasize other key concepts from different scientific fields such as emergency (Holland 1998; Corning 2002), which are of relevance to us since emergent change processes (i.e., epigenetic dynamics) are often produced as a response to changes in the environment. In this sense, we find some overlap between Evolutionary Developmental Biology, which is gaining importance, particularly in geographical and spatial studies, and our methodological approach.

However, from our point of view the EED approach finds greatest closeness with developmental systems theory. This approach is mainly the result of the contributions made by environmentalist philosophers such as Gottlieb (2001), Griffiths and Gray (2005) and others such as Oyama et al. (2001) and Robert et al. (2001). Nevertheless, distinguished authors in innovation studies and economic geography, such as Martin and Sunley (2015), introduce and base their contributions on developmental systems theory, when discussing how the expression of the genes should be contextualized. This, in part, reflects the underlying argument of our epigenetic logic. Similarly, the approach on sustainability and technology transitions (Geels 2002, 2014; Markard et al. 2012) can also be complementary to the EED, above all when discussing the characteristics of the environment and its evolution. Thus, we intend that the contribution made by this book can among others, assist, help, and complement the development of the scientific fields mentioned in Fig. 1.

We acknowledge that the methodological approach introduced in this book is quite functional and that is further operationalization remains for further work. Consequently, the three-stage approach the EED is based upon should be understood as a preliminary approximation to the understanding of the underlying dynamics that characterize fast-evolving and complex environments such as the Internet ecosystem (Iansiti and Richards 2006; Fransman 2014). We still have not reached a comprehensive operationalization of each of the three stages that characterize the EED approach in concrete routines. Further research should thus aim at identifying concrete procedures that allow for a full, detailed, and routinized exploration of each of these three stages. We consider that disciplines such as psychology, law, economics, sociology, engineering, financing, or ecology have a lot to contribute with to our further endeavors.

The book brings together two focuses of interests. On the one hand, based on an analogy from biology, it develops a new methodological approach, that has never been used to comprehensively explain the dynamics of the leading Internet business groups. It tries to combine an analysis that highlights the structure of these groups, primarily to provide an explanation of their evolution, and the consequences thereof. It could also help to better explain the evolution (foreseeable or otherwise) of the Internet universe. On the other hand, we expect that those readers, curious or interested in the present and in the future of the Internet, also find the book of their interest. We hope that the original explanation we pose to the dynamics, strategies, and diversification paths followed by some of the business groups covered in the book enlighten some of the readers (be them researchers or not), bringing them into a world of innovative thinking.

The introduction of continuous advancements in the Internet ecosystem has also posed several challenges for the authors of this book. When shall we stop following up the dynamics of the groups? Which of these should be included in the book and which should be left out? We are very much (and worriedly) aware that the rapid and disruptive evolution of the Internet and the groups leading it can make the book obsolete from the very moment in which it sees the light.

2 Summaries of Book Chapters

The chapters included in the book reflect and further elaborate on the issues discussed in this introduction. The book intends to balance both its conceptual contribution and the managerial implications that might be derived from the case studies included in it. With it, we aim to help extend the frontier of our understanding in areas where there are still significant gaps, both in theory and in practice.

Chapter “Introducing an Epigenetic Approach for the Study of Internet Industry Groups” by Mikel Gómez-Uranga, Jon Mikel Zabala-Iturriagagoitia, and Jon Barrutia starts elaborating by bringing into the floor concepts from molecular biology and business routines so as to build up the keystone concept in the book: Epigenetic Economic Dynamics (EED). The EED approach is defined as the study of the epigenetic dynamics generated as organizations adapt to major changes in their respective environments. Thus, its highest explanatory power is shown in rapidly changing environments, which entail fast organizational moves and/or decisions. The chapter is based on a biological analogy by which the concept of epigenetic is adapted and applied to the analysis of organizational dynamics so as to explore how organizations adapt to their respective environments in uncertain conditions as it is the case in turbulent and high velocity environments. The chapter discusses the analytical framework opened by the EED approach, which is implemented through a three-stage approach: (i) analysis of the environment and identification of the genomic instructions which are transmitted over time; (ii) identification of epigenetic dynamics; and (iii) identification and analysis of the consequences (in terms of innovation) as a result of epigenetic factors. The chapter concludes by providing some key characteristics for each of these stages.

Chapter “Epigenetic Economics Dynamics in the Internet Ecosystem” by Jon Mikel Zabala-Iturriagagoitia, Mikel Gómez-Uranga, Jon Barrutia, and Goio Etxebarria focuses on the analysis of the dynamics observed in the Internet ecosystem. In other words, the chapter explores in depth the second stage of the EED approach outlined in 4Chapter “Introducing an Epigenetic Approach for the Study of Internet Industry Groups.” In particular, it analyzes the evolution and dynamics observed in some of the leading Internet firms, determining how these expand and diversify their activities in response to changes in their environments, in what we refer to in the book as epigenetic dynamics. The firms studied in the chapter are: Google, Apple, Facebook, Amazon, Samsung Electronics, Microsoft, Nokia, Twitter, eBay, and Yahoo. The chapter addresses the study of the dynamics of the previous firms through the analysis of their patenting behavior and the completed mergers and acquisitions. The chapter explains how the diversification paths followed by these firms go against all odds or predictability. The chapter finds how even if these firms have an original and dominant specialization (i.e., DNA), they are somehow forced to become active in areas that are unrelated to its original DNA, so that all groups get into the dynamics of the others in such a way that everyone competes with everybody on every possible vector of activity. Consequently, the chapter aims to find out to what extent the dynamics followed by the analyzed firms are more or less disruptive, and more toward or away from their original DNA. Finally, the chapter concludes by providing a brief analysis of the consequences of the previous epigenetic dynamics.

Chapter “GAFAnomy (Google, Amazon, Facebook, and Apple): The Big Four and the b-Ecosystem” by Juan Carlos Miguel and Miguel Ángel Casado focuses on four of the firms discussed in Chapter “Epigenetic Economics Dynamics in the Internet Ecosystem” (i.e., Google, Apple, Facebook, and Amazon). It aims to show which factors contribute to explaining their quasi-monopolistic position and their influence on the development of the markets in which they operate. The chapter illustrates how the previous factors confer the firms’ offensive and defensive powers, concluding that the firms behave as business ecosystems with related activities. The intention of the chapter is to explain the growth of these firms through their characterization as two-sided markets. The authors discuss how innovation is essential for the four companies, and illustrate why the stiffer the competition, the greater the pressure they face to innovate.

Chapter “The Digital Ecosystem: An “Inherit” Disruption for Developers?” by Jorge Vega, Jon Mikel Zabala-Iturriagagoitia, and José Antonio Camúñez-Ruiz aims to show developers’ vision of the dynamics that occur in the Internet ecosystem. In this chapter, the authors take a look at the other side of the Internet, analyzing what is happening in the world of developers, what they do, and how the Internet is seen from the thousands of start-ups that form it. Do developers think that there is a disruption that is the same or equivalent to what the big Internet companies create in other scopes? That is the question addressed in this chapter. The chapter starts by illustrating the evolution of programming languages over the past decades so as to better understand the evolution of developers’ logic and the different developer profiles. It does also discuss some of the possible future scenarios that might be expected, from the perspective of developers and start-ups and their role in the Internet ecosystem as a whole. The chapter concludes by discussing the potential utility and adequacy of the epigenetic (i.e., EED) approximation for studying developer-related dynamics in the previous scenarios and raises the possibility of their being studied from a quantum approach.

Chapter “Future Paths of Evolution in the Digital Ecosystem” by Jorge Pérez Martínez and Silvina Serrano Calle focuses on the technological progress and the expansion of the digital ecosystem. The authors discuss how the Internet has caused disruption in numerous scopes. It is not only a technological advance, but also an economic one, as it alters the conventional relationships established in the classic supply and demand model, and also what could be considered a more subversive element, that of human relationships, what has brought a new political and social order. As a result of the transition toward mobile devices, new challenges are being opened in relation to telecom providers and physical telecommunication infrastructures, which are evidenced and discussed. One of the key claims made by the chapter is the need for a global Internet governance. In this sense, the role of the Internet governance forum is highlighted as a body seeking to define a series of principles. The paper elaborates on the difficulties entailed in guaranteeing security and continuity of the net. Regulation of the net is an extremely complex task that goes beyond the virtual borders of each country’s legal framework, and which has clear implications in terms of network security and control.

Chapter “4G Technology: The Role of Telecom Carriers” by Andrés Araujo and Itziar Urizar centers on the role of telecom carriers, analyzing operator strategies and performance in entering activities such as the entertainment industry, financial services or e-health. The chapter explores the evolution taken place in the development and deployment of the 4G long-term evolution technology, and the regulatory changes involved in such an evolution. It illustrates the large investments required in mobile technology which are driven by the whole of the ecosystem, operators, software producers, hardware producers and contents, services, and applications providers included. The authors tackle the regulation that has favored or in some cases hindered the development of the telecom sector and the digital economy in Europe in general and in Spain in particular. The chapter concludes by discussing how despite the large investments undertaken by mobile network operators, the growth in their revenues has stagnated in recent years, largely because their principal markets are saturated and because of competition from virtual operators and over the top firms also offering voice and data services using the networks deployed by the former.

Finally, Chapter “Scope and Limitations of the Epigenetic Analogy: An Application to the Digital World” by Jon Barrutia, Mikel Gómez-Uranga, and Jon Mikel Zabala-Iturriagagoitia concludes the book by addressing the scope and limitations of the epigenetic analogy. The chapter discusses in depth how economic analysis falls somewhat short of offering explanations and predictability of the digital ecosystem, concluding that an ecology-biology analogy may be appropriate as a body of knowledge to offer explanations and predictability. One of the problems encountered in any analysis undertaken within the Internet ecosystem is the definition of the borders. Setting topological markers proves difficult due to the dynamic nature of the ecosystem concerned, its powerful permeability and penetration in other production sectors and its eagerness to radically transform these. In the book, we have partially included the analysis of the consequences of epigenetic dynamics. However, since consequences are only observed ex-post, the undertaken analysis of is still rather partial, remaining as a matter of further work. There are new analytical challenges for the biological analogy in general, upon which the field of evolutionary economics is based, and for the EED approach introduced in this book in particular, that require the construction of models with explanatory and predictability potential so that they can orient policy makers’ and business management’s decision-making. This last aspect is an even more sensitive subject and calls for further research, which we aim, as a community, to be able to accomplish in the following years to come.