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The business model dilemma of technology shifts
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.ORCID iD: 0000-0002-7443-7761
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.ORCID iD: 0000-0001-9277-0288
2014 (English)In: Technovation, ISSN 0166-4972, E-ISSN 1879-2383, Vol. 34, no 9, p. 525-535Article in journal (Refereed) Published
Abstract [en]

Technology shifts are lethal to many manufacturing companies. Previous research indicates that this is not purely a problem of technological innovation, but is also closely related to the inertia of business models and business model innovation. This paper inquires into the dynamics of this intersection between technology and business models. Anchored in a case study in the automotive industry, it reveals how a potential technology shift constitutes a business model dilemma for firms leading in the existing technology. The paper illustrates why technology shifts are so difficult to master and contributes to theory by suggesting that managing technology shifts does not require either technology or service innovation in order to create a viable business model, but instead a compound of both. Furthermore, the paper applies a business model perspective to illustrate the explanatory power of analyzing the challenges of technology shifts faced by incumbent firms.

Place, publisher, year, edition, pages
2014. Vol. 34, no 9, p. 525-535
Keywords [en]
Business model dilemma, Business models, Electric road system (ERS), Servitization, Strategy, Technology shift, Truck manufacturers
National Category
Business Administration Other Engineering and Technologies not elsewhere specified
Identifiers
URN: urn:nbn:se:kth:diva-124551DOI: 10.1016/j.technovation.2014.02.006ISI: 000340310000004Scopus ID: 2-s2.0-84904794384OAI: oai:DiVA.org:kth-124551DiVA, id: diva2:636326
Conference
IAMOT 2012, Taiwan
Note

QC 20140916

Working paper number: TRITA IEO-R 2012:08.

Available from: 2013-07-09 Created: 2013-07-09 Last updated: 2018-04-03Bibliographically approved
In thesis
1. Preparing for takeoff: Analyzing the development of electric road systems from a business model perspective
Open this publication in new window or tab >>Preparing for takeoff: Analyzing the development of electric road systems from a business model perspective
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Electric road systems (ERS) are road transportation systems based on technologies that support electric power transfer from roads to vehicles in motion. Transition toward alternative technologies, such as ERS, is necessary in order to achieve the sustainability goals in road transportation. While several studies have emphasized that new business models are necessary in order to commercialize such technologies, they tend to neglect the fact thatmany of these technologies require socio-technical change, such as investments in alternative infrastructure.Hence, this thesis examines the relationship between business models and socio-technical change.

The research was explorative and based on two case studies investigating the development of ERS: a longitudinal case study in Sweden and an in-depth case study in Los Angeles, USA. The findings suggest different roles that business models can have in different types of projects when preparing ERS for commercial takeoff: first, new business models were not part of the pilot projects which focused on radical innovation; second, business models were developed in demonstration projects with user interactions; and, third, business models were evaluated, and in this case rejected, in a deployment project aiming to transform the existing socio-technical system.

Given these findings, this thesis argues that the business model concept could be used as a perspective from which to understand the evolutionary processes that take place during the early phases of transition, and that the challenges of commercializing and deploying systemic innovations, such as ERS, are more complex than often accounted for in the business model and sustainability transition literature.

This thesis also discusses whether or not ERS is likely to take off. Thereby, this research nuances our view of predevelopment processes of a niche innovation before it has actually taken off and improves our understanding of what hinders and enables sustainable transitions.

Abstract [sv]

Elvägssystem (ERS) är vägtransportsystem med tekniker som levererar ström från vägar till de fordon som är i rörelse på dem. En övergång till alternativa tekniker, exempelvis ERS, är nödvändig för att uppnå hållbarhetsmålen för vägtransporter. Flera studier har betonat att nya affärsmodeller är nödvändiga för att kommersialisera sådan teknik. Däremot kräver ERS socio-teknisk förändring, t.ex. investeringar i alternativ infrastruktur, vilket få har behandlat i tidigare studier. Denna avhandling fördjupar och undersöker därför förhållandet mellan affärsmodeller och socio-teknisk förändring.

Med en explorativ ansats har två fallstudier genomförts där utvecklingen av ERS studerats; en longitudinell fallstudie i Sverige och en fördjupad fallstudie i Los Angeles, USA. Resultaten visar att förhållandet mellan affärsmodeller och socio-teknisk förändring skiljer sig beroende på projekttypen som analyserades. För det förstavar utvecklingen av nya affärsmodeller inte en del av pilotprojekten då fokus var på radikal teknikutveckling. För det andrautvecklades affärsmodeller i demonstrations-projekt, som involverade lärande från användarinteraktioner. För det tredje, affärsmodeller utvärderades och förpassades i ett utbyggnadsprojekt med syfte att förändra det befintliga socio-tekniska systemet.

Givet dessa resultat, argumenterar avhandlingen för att affärsmodellskonceptet kan användas som ett perspektiv för att förstå de utvecklingsprocesser som äger rum under de tidiga faserna av ett systemskifte. Avhandlingen visar också att utmaningarna med att kommersialisera och implementera systemiska innovationer, såsom ERS, är mer komplexa än det som hittills framkommit i affärsmodells- och systemskifteslitteraturen.

Vidare diskuterar avhandlingen huruvida ERS kommer att bli framgångsrikt eller inte. Resultaten nyanserar synen på utvecklingsprocesser av en nischinnovation innan den har blivit kommersiell och förbättrar förståelsen för vad som hindrar och möjliggör hållbara systemskiften.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2018. p. 115
Series
TRITA-ITM-AVL ; 2018:8
Keywords
Electric road systems (ERS), business models, socio-technical change; sustainable transition, strategic niche management
National Category
Business Administration
Research subject
Industrial Economics and Management
Identifiers
urn:nbn:se:kth:diva-225377 (URN)978-91-7729-738-3 (ISBN)
Public defence
2018-04-27, F3, Lindstedtsvägen 26, Stockholm, 13:00 (English)
Opponent
Supervisors
Funder
Swedish Energy Agency, 37388-1
Available from: 2018-04-04 Created: 2018-04-03 Last updated: 2018-04-04Bibliographically approved

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