The Power of Ecosystem Position

Strategic sustainability has become central to how firms approach circular transformation and long-term competitive positioning. Yet while collaboration is often presented as the default solution for sustainable business development, the assumption that collaborative ecosystems distribute opportunity broadly and that participation automatically translates into access holds up less reliably in practice than many frameworks suggest.

When Collaboration in Sustainability Acts as Both Engine and Filter

The firms building durable and sustainable competitive advantage are those that understand collaboration not simply as a virtue to be performed, but as a strategic structure to be navigated. Based on research into collaboration within Kenya’s circular economy strategy, this article shows that ecosystem position and context-sensitive collaboration can outweigh even strong business model innovation.

The underlying research drew on fifteen in-depth semi-structured interviews with founders of Kenyan circular SMEs working in areas such as e-waste recovery, agricultural by-product valorisation, bio-based consumer goods and electric mobility, alongside accelerators, catalyst programmes, networks, and cleaner-production bodies that shape access to capital, partners and visibility across the ecosystem.

Collaboration in sustainability sits at the heart of every major framework for circular ecosystem development. The logic is intuitive: firms working together can achieve what isolated firms cannot through shared infrastructure, distributed knowledge, and collective innovation. In practice, this takes several recognisable forms from recyclers exchanging material streams so that one firm’s residual plastic becomes another’s input to waste enterprises co-renting aggregation hubs to achieve economically viable logistics volumes.

Other relevant examples include agri-businesses building farmer networks to share inputs, knowledge and market access, as well as incubators connecting early-stage founders with corporate partners able to support scale. These are the building blocks of a circular ecosystem, in line with international frameworks (like the African Circular Economy Alliance).

In Kenya’s circular economy ecosystem, however, collaboration operates far less evenly than many sustainability frameworks imply. Collaboration does not operate uniformly. For well-positioned firms, it functions as an engine, accelerating access to funding, building legitimacy and opening doors to strategic relationships that enable scaling. For firms at the periphery of the same ecosystem, it functions as a filter, producing and deepening their distance from the resources that matter. Both dynamics operate simultaneously, within the same system, through the same mechanisms.

The important question for businesses pursuing strategic sustainability management is therefore not whether to collaborate, but how collaboration is structured, and for whose benefit.

Why Some Sustainability Practices Create More Strategic Value Than Others

Part of the difficulty is that collaboration generates two fundamentally different kinds of value that are often treated as one. As illustrated in the Figure, there are fewer bridges across these two levels of collaborative ties.

Illustration generated with AI.

The first is operational: shared logistics, material exchange, cost reductions and peer knowledge transfer. These exchanges are broadly accessible, useful, and support day-to-day business functioning. In the Kenyan setting, this might mean recyclers and agri-tech firms turning each other’s by-products into feedstock, or firms in adjacent value chains sharing technical training.

The second is strategic: collaborative relationships that build legitimacy, unlock capital and position a firm to scale. These tend to look quite different. An incubator might open doors to international funders and certification bodies, or a development agency might embed a firm’s curriculum into a national training framework. This strategic layer tends to concentrate among a relatively small group of centrally embedded firms and is far less accessible to organizations operating outside established networks.

Results from our study suggest that firms confined to the operational layer survive, whereas firms that reach the strategic layer compete.

For organizations seeking to develop a sustainability strategy that delivers long-term value, this distinction matters enormously. Participation in collaborative ecosystems can create the appearance of engagement without delivering the strategic benefits associated with true ecosystem integration.

Why Strategic Sustainability Must Be Adapted to Institutional Context

One of the clearest findings from research into Kenya’s circular economy strategy is that collaborative dynamics do not generalize across institutional contexts.

Models designed for environments with strong formal governance, established certification systems and mature industry networks produce different results when applied elsewhere. In the EU, for instance, Extended Producer Responsibility schemes, accredited certifiers and well-resourced industry associations carry much of the work of verifying claims and allocating support.

In Kenya, those same functions rest on trust-based relationships and a small set of intermediaries such as accelerators and donor-funded programmes, whose convening choices determine which firms reach capital. The assumption that collaboration is universally beneficial, or that bringing actors together will automatically distribute opportunity evenly, breaks down under different institutional conditions.

This insight extends well beyond emerging markets. Any firm entering a new geography, expanding into an unfamiliar sector or implementing a sustainability framework developed in another institutional environment faces similar risks. A European hospitality group entering East Africa, or a Kenyan firm scaling into a neighbouring market, cannot assume that the certifying bodies, funding networks or peer associations that anchored its strategy at home exist, or function the same way, in the new setting.

An ecosystem-based approach to sustainability recognizes that successful implementation depends not only on the model itself, but also on the institutional context surrounding it. In practice, effective strategic sustainability management requires adaptation rather than transplantation.

How Ecosystem-Based Strategy Creates Sustainable Competitive Advantage

The research further shows that ecosystem access confers more than information and resources; it also confers legitimacy. In markets where sustainability standards and formal institutions are still developing, legitimacy is what makes a firm’s commitments credible to partners and customers. In Kenya’s circular economy, legitimacy depends less on formal certification than on visible association, such as being selected for an accelerator cohort or featured at a national sustainability convening. For prospective funders, a start-up that has moved through these networks often appears a safer investment than a technically stronger peer that has not.

Perhaps the most striking finding is that ecosystem position can outweigh business model innovation in determining access to collaboration opportunities. A firm with a strong ecosystem-based strategy and a more conventional sustainability model may outperform a more innovative firm operating at the network’s periphery. In other words, ecosystem positioning is not merely a byproduct of successful execution; it is a strategic asset in its own right, one that requires deliberate cultivation rather than passive accumulation.

Three Strategic Moves That Actually Make Sustainability Work

1. Don’t Just Collaborate — Collaborate Up

Not all collaboration is created equal. Many firms are active and well-connected, while being constantly “in the ecosystem” and yet they remain stuck at the same level. Why? Because they are collaborating laterally, not strategically.

The firms gaining real traction in Kenya’s circular economy aren’t necessarily the most innovative. They are the ones who:

In short: they don’t just collaborate — they collaborate intentionally.

2. Treat Ecosystem Position Like You Treat Capital

Most firms invest heavily in products, operations, finance or technology but leave their ecosystem position to chance. That’s a mistake. In practice, who you are connected to often matters as much as what you build. Relationships with the right intermediaries (accelerators, donors, conveners, industry bodies) act as force multipliers:

• They open doors you cannot open alone
• They validate your legitimacy externally
• They shape how others interpret your business

3. Choose Partners Who Open Doors (Not Just Sit Inside Them)

A subtle but critical distinction: some ecosystem actors include, others reinforce. Certain networks and intermediaries mainly circulate opportunities among the same familiar players. Others actively bring in new firms, connect across boundaries and expand access. If you partner only with the former, you risk becoming well-connected but stagnant.

One of the most underused strategies? Working with locally embedded firms that already have:

• Deep community trust
• Informal legitimacy
• Access to networks outsiders can’t reach

Final Thought: Strategic Sustainability Is Also Network Action

The wider lesson travels well beyond Kenya. In any market where sustainability infrastructure is still forming, the firms that endure are those that build legitimacy where it matters most, making their commitments credible and their advantages durable.

Ultimately, strategic sustainability is not only about what you do internally, but also about who you are connected to, how you collaborate and how effectively you position yourselves within evolving sustainability ecosystems.

Authors

Dr. Carlos Martin-Rios – Associate Professor at EHL Hospitality Business School

Hala Linck – EHL Alumni

Source: View the original article at EHL.