Optimization models for member firms selection to build an embedded innovation ecosystem

Abstract

Innovation is important for large enterprises to maintain and enhance their competitive advantages. Large enterprises can build strategic embedded relationships with a plenty of innovation technology enterprises via resources empowering and foster a new type of innovation ecosystem, namely, embedded innovation ecosystem. We decompose this decision‐making into two stages and first establish an optimization model to describe how focal firms select the innovation directions, that is, which market segment to invest in. We then construct a two‐layer planning model to describe how focal firms select member firms with an appropriate innovation level in a given innovation direction.