Realizing Latent Use Contexts: Innovation Ecosystem Strategies to Drive Growth and Sustainability

ABSTRACT Firms face pressure to balance economic performance with environmental and sustainability goals. This study examines how firms may design and manage innovation ecosystems to achieve these dual objectives. Through a longitudinal embedded case study of CATL—a global leader in EV batteries—we investigate how the firm strategically designs and manages innovation ecosystems to drive growth and enhance sustainability impact. We show how CATL expanded beyond its core products into new use contexts, including shipping, mining, and value‐chain operations, through ecosystem‐based collaboration. We identify four growth modes: traditional core product innovation and three ecosystem‐based modes that have generated system product innovations, value innovations, and value‐chain process innovations. These create value for paying customers and broader societal stakeholders while supporting CATL's financial and sustainability objectives. We also reveal how CATL's internal project management processes facilitate the construction and evolution of multiple innovation ecosystems. Conceptually, we extend innovation ecosystem research by distinguishing latent (potential) from manifest (realized) use contexts and theorizing how firms use ecosystems to convert one into the other. The study contributes to research on sustainability‐oriented innovation and offers practical insights into how firms can strategically build and manage portfolios of innovation ecosystems to scale both economic performance and sustainability impact.