Business Models for Crowd-driven IoT Ecosystems: A Review

Abstract

Crowd-driven IoT ecosystems [1] take advantage of technological advancements and underlying network effects in order to harness the collective power and intelligence of the crowd. However, one can identify a research gap in the literature addressing the emergence of generic crowd-driven ecosystems as well as crowd-driven ecosystems in the context of IoT.Given the nature of the crowd-driven IoT ecosystems, current approaches to developing a business model fail to capture and analyze their dynamics and thus, their full potential. This necessitates the identification of analogous business model building blocks and frameworks that will describe the dynamic nature of these emerging value ecosystems. This study aims to provide a foundation for the development of these emerging business model frameworks.The paper is structured as follow. Section 2 provides an overview of the approach that has been adopted inthis study. Section 3 examines the rise of crowd-driven IoT ecosystems and Section 4 explores the research area of business models for crowd-driven IoT ecosystems and provides an overview of existing studies and related work in this field. Section 5 provides an explanatory framework that classifies research in the context of IoT business models and frameworks aiming to

A Business Model Framework for Crowd-Driven IoT Ecosystems

“…[*] "Contextual Open Innovation 2.0" integrates the notion of the environment (as a contextual parameter) in an open, ecosystem-centric innovation paradigm based on the principles of Open Innovation 2.0 (Curley & Salmelin, 2013). (extending Ziouvelou & McGroarty, 2017;Ziouvelou et al 2017;Valkokari, 2015;Clarysse et al, 2014) These ecosystems embrace a circular value creation model, where value is co-created, cocapturedandco-distributedamongnetworkparticipantsandcontributors.Thevaluestructures oftheseecosystemsareexpressedinanintegratedcollaboration,co-createdsharedvaluemode ofopeninnovation2.0(Curley&Salmelin,2013)andunderaQuadrupleorQuintupleHelix innovationarchitecture.Inthelattercase(i.e.,crowd-drivenIoTecosystems 6 ),the"environment" (fifthhelix)isthecontextualIoTsettingofthecrowd-drivenecosystemsthus"contextually" extendingtheintegratedOI2.0modelofinnovation.Assuchthisemergingformofecosystems canbeseenasanamalgamofdifferentnetworksthatconsistofeconomicagentssuchascivil society,universities,industry,publicsectorandnon-economicones,suchastheenvironment, technologyandtheirconstantlyevolvingrelations.…”

“…Althoughcrowd-drivenIoTecosystemsconstituteareality,whenbusinessmodellingforsuch ecosystemsisexamined,onecanidentifyagapinexistingresearch(Ziouvelou&McGroarty,2017). Existingresearchintheareaplaceemphasisprincipallyuponthetechnicalaspectsofcrowd-driven IoT ecosystems mainly related to their development and limited work can be found emphasising uponnon-technicalelementsforsuchecosystemssuchasdesign(Ziouvelouetal.2017)andbusiness model considerations (Ziouvelou & McGroarty, 2017). Hence, there is a need for a systematic analysisofbusinessmodelsforsuchemergingdynamicenvironmentsthatwilladdresstheirneeds andspecificationsinordertopresentedanalogousbusinessmodelanalyticalframeworks.…”

“…Overthepastfewyears,therehasbeenafundamentalchangeinthelogicofbusinessmodels,from firm-centricbusinessmodels((BM1.0) Magretta,2002;Osterwalderetal.,2005;Casadesus-Masanell &Ricart,2010)toecosystem-centric((BM2.0)Westerlundetal.2014Rong,etal.2015;Schladofsky etal.,2016)andcrowd-drivenecosystem-centricone((BM3.0)Ziouvelouetal.2017; Ziouvelou & McGroarty, 2017). This change, reflects a greater structural shift in the way value is created andcapturedintoday'snetworkedsociety;thatisfromopen,crowd-drivenecosystemicstructures poweredbytechnology,userparticipationandopencollaborativeinnovation,insteadofstandalone companiesandclosedinnovationecosystems.Indirectalignmentwiththesetransformations,the businessmodelconcepthasevolvedfromaconstructthatexplainshowafirmcreatesandcaptures valueinaprofitablemanner(Baden-Fuller&Morgan,2010)byinteractingwithsuppliers,customers andpartners (Zott&Amit,2003),toabroaderbusinesslogicthatdescribestheopen,participatory valuemechanismsofemergingecosystems.Unfoldingthisway,thedynamic,ongoinginteractions ofthediverseecosystemactors(economicandnon-economicactors)towardsjointvaluecreation, valuecaptureandvaluedistribution(circularvaluecreationmodel).Assuchthenotionofbusiness models has advanced from a corporate blueprint linking strategy and business processes to a constantlyevolvingnetworkarchitecturethatdescribesembeddedinter-connectedvalueprocesses.…”