paving the way for a new composite indicator on business model innovations
TRANSCRIPT
Bild und Farbe
2014 Science and Technology Indicators Conference 3-5 September 2014 Leiden, The Netherlands
Paving the way for a new composite indicator on business model innovations
by Franz Barjak and Marc Bill
Why bother about an indicator for business model innovations?
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• It is an important road to being successful as an organisation,
• There exists a lot of conceptual literature and popular instruments for using the concept in business practice and consulting, e.g. the Business Model Canvass (Osterwalder & Pigneur, 2009),
• Empirical evidence on BMI is limited • mostly case studies with few cases – except for Amit & Zott (2001) who looked at 59 e-
business cases,
• manually collated data sets (Hartmann, Oriani, & Bateman, 2013; Zott & Amit, 2008),
• ad-hoc non-scientific surveys from consultancies such as the BCG innovation survey or the IBM CEO survey
• While at the same time methodologically stronger innovation surveys are underused and lack indicators to inform on many aspects of innovations (Arundel, 2007; Bloch & Lopez-Bassols, 2009)
Objectives and approach1. Linking the BMI construct conceptually and empirically to established
innovation surveys and their definitions,– Mapping of BMI framework on OECD and Eurostat/CIS innovation concepts
2. Identifying gaps in the survey coverage with regard to the BMI construct,– Implementing the BMI framework in a multiple case comparison of selected BMI cases
(not reported in this paper due to constraints of time and space)
3. Developing suggestions on how to close these gaps
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Conceptualisation of Business Models and BMI
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(see Osterwalder & Pigneur, 2009; Teece, 2010; Yunus, Moingeon, & Lehmann-Ortega, 2010; Zott, Amit & Massa, 2011)
BMI: Fundamental and interconnected change of all three elements of a business model
Linking the BMI construct conceptually and empirically to established innovation surveys and their definitions
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BM com-ponent
Innovation types
Proposition
Value creation
Product innovation
1. New value propositions will in many, if not in most cases, coincide with product innovations.
Business system
Process innovation, organisa-tional innovation
2. Changes of business systems can be in the form of changes in the production processes as well as internal and external organisation and division of labour along the value chain.
Value capture
Process innovation, marketing innovation
3. A new approach for capturing value will coincide with a process and/or marketing innovation.
Reducing type I and II errors
• Combination of innovations is not included in innovation surveys
• Limitation of the analysis to SMEs (firms with <250 employees AND < 50mEUR annual turnover)
• Fundamental or radical and not only incremental change
• New or significantly improved at the level of the market or industry (not only company, but not necessarily world)
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Results – BMI in SMEs by industry according to CIS 2008 and 2010
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2.7%
7.5%
3.3%
5.3%
4.4%
2.8%
10.4%
6.2%
6.5%
6.3%
2.4%
6.4%
1.7%
5.2%
3.6%
2.2%
12.2%
5.4%
6.2%
5.5%
0.0% 5.0% 10.0% 15.0%
B: Mining
C: Manufacturing
D: Energy
E: Water & waste
46: Wholesale trade
H: Transportation, storage
58, 61-63: Publishing,telecommunications, computer…
K: Finance & insurance
71: Architectural and engineeringactivities, technical testing and…
Total
CIS 2008CIS 2010
BMI in SMEs by country according to CIS 2008 and 2010
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BMI in all and only in exporting SMEs by country according to CIS 2008
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Sensitivity
• IBM CEO Survey 2006 of mainly large firms: • 14.9% of all European respondents realised a BMI (IBM according to Bock
et al., 2011)
• Our operationalisation with CIS 2010 data for larger companies (> 250 employees)
• 18.7% of large companies in Europe meet our criteria for BMI
• In both surveys finance companies are most often business model innovators among large firms
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Summary
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• It is possible to operationalise a composite indicator for BMI with data on innovations resulting from the work of OECD and Eurostat working groups.
• Challenges which need to be addressed
– Assessing the connections between different types of innovations
– Measuring the degree of novelty of non-technological innovations
– Conceptualising and assessing revenue model innovations
• Business model innovators are a small fraction of companies
– Improve the information basis through a better measurement and quantification of business model innovators in both SMEs and large companies is a first step towards improving the conditions for BMI and lowering the barriers against it.