Business Model Innovation in Transforming Economies: A Co-evolutionary Perspective for a Global and Digital World

Abstract

Although transforming economies offer many examples of business model innovation, they have been largely overlooked in academic research, with most studies focusing on what happens in developed countries. However, in their push to become innovation economies, transforming economies have become experimentation arenas for new ways of doing business. This special issue addresses the gap in business model innovation research in several ways. First, we develop a co-evolutionary framework in which we consider what type of business model innovation occurs in transforming economies (adoption, adaptation, or creation) and who the central players are (indigenous firms or MNEs). We show how, through business model innovation, indigenous firms have begun to challenge global industry leaders – despite not having the same resource advantages, proprietary technology, or market power – and we highlight the consequences of this for the domestic and global environment. Second, we discuss how the articles in this special issue advance research by contributing to a co-evolutionary perspective on business model innovation for a global and digital world. Third, to guide future research on business model innovation in the fascinating context of transforming economies we outline various directions that could build on our framework and the articles presented here.

Consolidating Unorganised Retail Businesses through Digital Platforms: Implications for Achieving the UN Sustainable Development Goals

“…Second, we contribute to the emergent literature on inclusive and transformative models of innovation in emerging or transforming economies [11,14]. We respond to Mortazavi [11] and Mihalache and Volberda's [14] call to explore the mechanisms of innovation which empower communities and create transformative opportunities for overall improvement in livelihoods.…”

“…Second, we contribute to the emergent literature on inclusive and transformative models of innovation in emerging or transforming economies [11,14]. We respond to Mortazavi [11] and Mihalache and Volberda's [14] call to explore the mechanisms of innovation which empower communities and create transformative opportunities for overall improvement in livelihoods. Our findings show that app-based digitisation is inclusive because it democratises the UR business operations by opening up opportunities for these businesses to compete in the free marketplace and secure diverse range of products at competitive prices to sell to their end consumers.…”

“…Mortazavi et al [11] offer a broader 'inclusive innovation' perspective, calling for the partnership between local entrepreneurs and governments, which helps firms cope with technological and economic changes in resource constrained contexts. Mihalache and Volberda [14] also refer to a co-evolutionary perspective of business innovation in emerging market contexts, in which firms are asked to develop new ways of doing business that not only improve the local (and global) competitiveness of the firm, but also improve the socio-economic situation of the socially embedded stakeholders.…”

“…Moreover, we would also seek to explore whether the improved efficiencies in UR business would also have a positive socio-economic impact on the lives of the subsistence consumer-merchants who perform the dual role as consumers providing themselves and their families while also managing small UR businesses [9]. In doing so, we would seek to develop an inclusive [11] and transformative [14] view on sustainable business model innovation at the base of the pyramid involving UR businesses in emerging markets. Accordingly, the research questions we seek to answer in this study are as follows:…”

“…Overcoming inherent business inefficiencies by consolidating business operations results in improved economic performance of the UR businesses, transforms livelihoods of the UR business owners and creates local level pathways for the realisation of the UN SDGs [13]. With this framework, we reconcile the literature between sustainable business model innovation [1,3,6,8] and transformative models of innovation in emerging economies [11,14], emphasising that digitisation enables UR businesses to circumvent chronic resource shortages that improve business performance, which in turn leads to further socio-economic transformation. This is important because the research highlights that local level pathways in resource constrained emerging market environments can 'level-up' development to attain the UN Sustainable Development Goals (SDG) [13] without waiting on necessary governmental intervention for resource availability.…”