An important tenet of smart product-service system is to realize collaborative partnerships among an industrial ecosystem. The ecosystem provides an opportunity to share resources and focus on value-driven interactions for product development. Furthermore, the ecosystem allows the firms to capitalize on the interactions and create a product or service that a customer would pay for, perpetually, as long as the value can be extracted from the solution. To achieve sustainable smart product-service systems, digital infrastructure becomes backbone for interaction among ecosystem participants maximizing value creation and capture. We dive into the relevance of co-creation strategy for a firm operating in an ecosystem from the lens of smart product-service system. Furthermore, we analyse the impact of digital interactions among ecosystem participants that helped the firm to collaborate with suppliers and customers. The adoption of co-creation strategy helped the firm to create value-driven solutions, in addition to reducing cost through resource sharing and achieve resource-efficient ecosystem.