In this digital era, the emerging industries enabled by digital technologies such as cloud computing, big data, and artificial intelligence have shown different patterns in contrast to the product-centric industries in the industrial era. Rather than producing a standard product at lower costs through mass production, the key to the emergence and development of contemporary emerging industries is delivering customised and complex solution and services for different customers. The increasingly complex value proposition requires external resources and knowledge from different industries, thus making ecosystems more important as a new way of organising innovation and business.

The service-centric, customised, and boundary-crossing trends in the digital age have challenged the classic product innovation and industry evolution theories that are largely based on evidence from the industrial age. Although the stages of industry emergence have been examined, apart from the process perspective, we still need to uncover how the transitions between stages are achieved as well as how a new industry is created by a set of actors from an organisational perspective. Moreover, the cumulative research on industry emergence from diverse disciplines requires integration.

The aim of this research is to explore: how does a new industry emerge based on the underlying ecosystems? Specifically, the two sub-questions are: (1) how does industry emergence unfold in the digital era? and (2) how do the underlying ecosystems enable the transitions and emergence? To answer these research questions, I conducted an in-depth longitudinal study of the cloud computing industry in China from 2008 to 2021. Through multiple methods to theorise from process data, I developed the holistic process model of industry emergence and the industry ecosystem models from actor and activity perspectives.

Concerning the industry emergence process, four stages and four transitions characterised by dominant design dynamics are identified. The findings show the decoupling between the dominance of technology design and the dominance of business model design and how the dominant design dynamics influence industry emergence, which fills the gap in industry emergence research and contributes to dominant design theories. Concerning the underlying ecosystems, this research firstly identifies the role of ecosystem shapers, complementors and facilitators at different stages of industry emergence. Secondly, it explains the generic transition mechanism by identifying the multi-level industry ecosystem as the linkage between the supply side and demand side and by introducing cross-industry innovation and application scenario as new elements in the industry ecosystem. This fills the gap in ecosystem research at the industry level, and gives strategic and policy implications.