Exploring Radical Market Changes as Phase Transitions of Service Ecosystems: Insights from Complexity Science

The multiple current transformations can determine complex radical market changes. Many market actors feel an increasing need to make sense of market dynamics, which bring opportunities but also threats. We leverage on the Service-Dominant logic and deepen its roots in complexity science to delineate radical market changes (i.e., phase transitions of service ecosystems). In particular, within complexity science literature, we found that phase transitions are approached in three diverse ways: shifts to a new complex order, shifts to a region of complexity where chaos and order achieve a balance, and shifts to escape chaos. We show that those three approaches can be integrated to give a full explanation of the dynamics of the service ecosystems. Then, we reconcile the approaches with the S-D logic narrative to delineate the complexity science insights into the phase transitions of service ecosystems. In doing so, we highlight some interesting concepts to further explore within S-D logic: institutional instability and service ecosystem viability near the edge of chaos, and institutionalization due to self-organized criticality. The implications connect the conceptual findings to the practice of market actors facing transformations.