Journal of Multi Business Model Innovation and Technology

Vol: 3    Issue: 1

Published In:   January 2015

Industrial Business Model Innovation in Scandinavia – A Contribution to State of the Art 2015

Article No: 2    Page: 29-36       

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Industrial Business Model Innovation in Scandinavia – A Contribution to State of the Art 2015

Received 15 January 2015; Accepted 15 January 2015; Publication 10 March 2016

Ole Horn Rasmussen

M-BIT Research Group, Aarhus University, Denmark

E-mail: ole.horn.rasmussen@gmail.com; ohr@auhe.au.dk; ohr@Btech.au.dk



Abstract

This article presents the content of volume 3 and its three issues. In the three issues we introduce three different approaches to business innovation. Generally the idea of eco-systems is – directly or in-directly – a cornerstone. From Sweden a new concept of function providers is introduced, where the overall idea is the establishment and implementation of a life-cycle focus where a business is able to create a more solid and profitable position. Issue 2 is from Finland and put focus on the triple role of Business Model co-creation process within business networks. What are important in order to establish a new network? Issue 3 is from Denmark. Here the aim is to contribute to the establishment of a research program for business model innovation. The article gives an answer to: “Where must managers look in order to release the Business Model Innovation potential of their business?



Keywords

  • eco-systems
  • function providers
  • life-cycle focus
  • co-creation
  • innovation process
  • new business networks
  • research program for business model innovation
  • business model eco-systems
  • where to look models

1 Industrial Business Model Innovation in Scandinavia – Introduction to Special Volume 2015

As editor for Volume 3, 2015 I have chosen to put focus on Scandinavia and the state of art within Business Model Innovation. What is the Scandinavian position? In the three Issues of Volume 3, 2015 we present three different approaches from Sweden, Finland and Denmark respectively. It is the hope of the journal that the three issues may bring inspiration to both academia and the practical work in industry. The three issues present the newest results from different research communities where a common issue is that the research is rooted on close corporation with industry. Consequently, practical managers are brought examples on the newest international research from Scandinavia. Volume 3, 2015 is useable as a point of departure for both experienced and un-experienced businesses dealing with innovation work. Besides Volume 3, Issue 1, 2, and 3 may bring inspiration for further search both for the practical use and for more theoretical studies within the idea of “Business Models” and “Business Model Innovation”. Much confusion exists around Business Models and Business Model Innovation. One of the aims with Volume 3, 2015 is to contribute with clarifications within different fields. Some of the key-elements that the three issues have in common are that innovation work – or as we prefer to term it: Business Model Innovation – always contains elements of cooperation. As Håkan Håkansson in 1989 said: No Business is an island. The articles in Issue 1, 2, and 3 in Volume 3, 2015 have this assumption directly or indirectly as a corner stone in their theoretical approach and practical advise to industry.

The contributions from the research in Sweden, Finland and Denmark have much in common. All the three agree that the idea of new organizational structures must be implemented. Industry is much different today as for instance compared with the time before Internet of Things entered the arena. However, this is only one of the changes in the environment of business or what we refer to as “The framework conditions for Business Model Innovation”.

2 Sweden

In this issue we present an idea from a group of researchers and industry people from Sweden. They work with what they term “The Concept of Functional Product innovation”. The idea is centered around function providers and the ability to implement responsibility of the physical artefact throughout the life-cycle.

During cooperation between different actors the actors each transform their industries and becomes function providers. From at methodological point of view the challenges are expressed at their homepage: http://www. ltu.se/centres/Fastelaboratoriet-Vinnexc-Center/Om-oss

  • Integrating services and hardware into functional provisions
  • Creating innovative collaboration methods and technologies to increase agility in global value-chain partnerships
  • Finding new ways of modelling and simulating both business and technology for the purpose of functional provision
  • Creating competitive knowledge assets to achieve win–win in the extended enterprise
  • Finding and incorporating life-cycle customer needs in Functional Product Development

The paper addresses the need for innovation in order to achieve sustainable growth and business development within the manufacturing industry, and further how that can be enabled by striving towards functions. Adopting an open perspective, the paper proposes a function innovation model involving academia, potential function providers and customers in order to create a long-term win–win situation between function providers and their customers.

The authors claim that the proposed function innovation model has a framework that can be generalized and partly transferred to other contexts such as products or services produced by the manufacturing industry. What needs to be altered is mainly what the relations comprise and what needs to be dealt with on the providers’ strategic and tactical levels as well as the respective tactical and operational levels.

3 Finland

The second research community – presented in Volume 3, Issue 2, May 2015 – is rooted in action research and comes from Finland. Here we get a first directly reference to the idea of eco-systems. The author investigates how an ecosystem becomes an ecosystem following two different research cases. Even though both projects continued for three years, the business networks were not ready to commercialize the joint business model yet. However, the focus is on the process and how the participants go through different phases. Here we get a first – however indirectly – link to Volume 3, Issue 3, September 2015, because the case supports an empiric co-existence of a linear and co-evolutionary approach. The paper looks on the topics of learning and coordination within emerging business networks. It discusses the triple role of Business Model co-creation process within business networks: first the process helps the business network to learn and create trust between the partners, second it helps the partners to estimate the feasibility and fairness of the cooperation, and third, it helps the business network to agree on the use of different coordination mechanisms.

The focus on the co-creation processes between the (potential) partners and the focus on different parameters like trust and negotiations related to a common business model, the importance of interpersonal contacts, values and behaviour brings insights into what matters. In this co-creation process business model serves as a boundary object that facilitates communication. The main contribution of this article is syntheized into a proposition of triple role of co-creation process of business model. Firstly, knowledge sharing and mutual adjustments between the partners are essential. Secondly, the risks, rewards and required changes are evaluated during the process and decide whether to enter, stay or leave the network; and thirdly, it functions as a high level coordination framework, through which explicit agreement over roles and responsibilities can be operationalized into formal coordination mechanisms. The co-BM is valuable even if the partners did not in the end agree to collaborate, because it allowed the partners to make justified decision over the collaboration. The author underlines that a follow up study would provide valuable information on where the co-creation processes of business models eventually led up to. Furthermore, additional studies on business modeling within business networks would provide more insight into the composition and coordination in different phases of collaboration.

4 Denmark

In Volume 3, Issue 3, September 2015, focus are researchers representing M-BIT Research Group in Denmark (Multi Business Innovation and Technology). M-BIT was founded in 2012 at Aalborg University by the authors of this article. The research set-up can be identified from the figure as shown in the next page top.

As the model indicates M-BIT works close together with the industry. The industry is defined total broadly and includes any business – private, public, semi-private, voluntary organizations etc. Any unit is understood as a business and a business is understood as an organization with many units – or as M-BIT prefers to pronounce it: Business Models. During participatory actions research the aim is to contribute with both theoretical and practical results. It means that students, business managers, workers, academia, business organizations, public authorities gain from the groups work.

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The article in Volume 3, Issue 3 is conceptual and aims to contribute to the ontological, epistemological and methodological discussion toward a theory of business model and business model innovation. In the Lakatos sense the paper aims to contribute to the establishment of a research program for business model innovation on the one side and on the other side the paper aims to support the practical BMI efforts to implement concrete BMI actions in the businesses. The paper contributes by qualifying with an answer to “Where must managers look in order to release the BMI potential of their business?”

The question may be an easy task. However, there are two black boxes – a business and the surrounding of the business – and the coherence between them. The authors raise the fundamental question that the black boxes cannot be taken for granted. Consequently, they ask: What do theory tell about the black boxes and how to understand them? Based upon a holistic approach they investigate if and how different approaches are able to work together. The foundation of the article is a combined top-down and down-up thinking, and establishes an overview that reflects the whole “battlefield” for a business. The article argues for the existence of three arch types of business models: a macro BM, a micro BM and a micro-micro BM. A main element and a methodological reflection has an initial reference to the general idea about Ecosystem and the idea of BM Ecosystems (BMES). A main point is that a concrete and practical focus on eco-systems also puts focus on the “un-born” business opportunities. The author point of departure is a discussion of the usefulness of the idea of National Systems of Innovation and the usefulness of the idea about industry, clusters and sectors. The assumption is that the links between Business Model Components, Business Model Dimensions, Business Models, Business Model portfolio, the Business, Ecosystems and the different Business Model Eco-systems represent the potential for any BMI process, which together with some general rules of the game, as defined by Veblen, lay down the framework conditions for a business’ BMI process. The paper concludes, that the idea of national systems of innovation must be supplemented with other perspectives. Because the idea of clusters, sectors and industries is rooted in the understanding of a business as the unit in focus, these ideas must be supplemented because any business consists of more than one BM. Within a multi business model focus the coherence and interplay between AS-IS BMs and TO-BE BMs represent a theoretical and practical necessity. Besides, it might be valuable to rethink the term barriers and borders to industry, sections and clusters and instead think as context based. The boarders of ecosystems depend on the context and the viewpoint.

The idea of a business-model as a cube works in practice. However, the paper presents two “Where to Look Models” evolved from a top-down and a down-top perspective – respectively. The Models “Where to Look” is about understanding the research field for a business. The models represent the real “Battle-field” or as we argue: The practical research field for the business in question. Any BM is unique. The consequence will be that every business will have its own, specific and context dependent research field or what we term: Business Model Eco-Systems.

Biography

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O. Horn Rasmussen is Postdoc atAarhus University. He holds a M.Sc. in Economics and a Ph.D. in Evolution of Technological Systems within Theoretical Frameworks of Structural Change and Transformation. His research interests are within the scientific field multi business model innovation, co-existence of old and new technologies, economics and the economic process. Before commitment to Aarhus University he was Post-Doctoral Fellow at the Department of Mechanical and Manufacturing Engineering,Aalborg University, Denmark. He has been Ph.D and Researcher at the Department of Economics, Politics and Public Administration and Department of Business and Economics at Aalborg University. His research interest ranges from (i) Business Model Innovation (ii) Strategic Business Model Innovation, Scenario Modeling, Business Accelerator and Sustainability (iii) Business Model Ecosystems (iv) Business Models, Engineering, Interdisciplinarity and Research Ontology, Epistemology and Methodology (v) Economics and the Economic Process. His empiric research methodology is a paticipative action research approach. The aim is to innovate new models and methods for integrated technology and business model innovation across product, service, production and process technology platforms in mind bothering multiple spin-outs. He works across industries, companies, public and private in order to create radically new solutions and integrable knowledge of those involved partners. To master the total integrated technology and business model innovation process from idea, concept, prototype implementation to operation, commercialization and bottom line is a prime goal. The results are incorporated into university educational programs, courses and training modules for students and Ph.D Schools.

Abstract

Keywords

1 Industrial Business Model Innovation in Scandinavia – Introduction to Special Volume 2015

2 Sweden

3 Finland

4 Denmark

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Biography