Mondragon University (SPAIN)
About this paper:
Appears in: INTED2017 Proceedings
Publication year: 2017
Pages: 5877-5886
ISBN: 978-84-617-8491-2
ISSN: 2340-1079
doi: 10.21125/inted.2017.1374
Conference name: 11th International Technology, Education and Development Conference
Dates: 6-8 March, 2017
Location: Valencia, Spain
Based on the importance for corporate strategy and therefore firm performance, business model innovation has become a key approach towards business innovation. Firms, start to realize that in the context of accelerating environmental dynamics and harsh market conditions, business models do not permanently guarantee successful performance even for long-time established organizations. To the contrary, managers are becoming more aware that business as usual is no longer sufficient and that their future depends on their ability to continuously reconsider established business models, from both proactive and reactive approaches to exogenous change.

On the other hand, the fourth industrial revolution or Industry 4.0 is called to pull applications and push technologies enabling a high degree of transformation of the companies, their associated value propositions and related business models. Therefore, Industry 4.0 should be interpreted by SMEs as a new level of organization and management over the entire value chain and also as a paradigm shift in business operations and business models, rather than a technology based improvement of business as usual or an evolution. Nevertheless, companies tend to focus too much on the technological aspect of Industry 4.0 rather than on the paradigm change of business value propositions and business models.

Thus, comprehensive business model innovation from an Industry 4.0 process in SMEs should comprise reshaping the actual value propositions as well as the several constituent components of the business model. In this process, managers have to rethink the customer value proposition and to reconfigure the value creating and value-capturing activities. As a result, SMEs have the opportunity and challenge to develop technologically enabled value propositions and business model based on Industry 4.0, providing new opportunities to gain competitive advantage, as well as activating previously unrecognized corporate value sources, as well as creating distinct transactional systems which are difficult to imitate.

Yet, despite this promising potential and threat of the integrated concept between business model innovation and Industry 4.0 and the fact that technology is a facilitating resource to radically change the business model (what we sell, what is our value proposition, who is sold, how are they sold), managers find it challenging to efficiently develop and implement new or reconfigured business models in corporate practice, arguing business model innovation reaches substantially beyond established firm capabilities and routines to organize product, service or technology innovation.

In this context, the aim of this paper is to illustrate a Business Model Innovation case focus on Industry 4.0 in SMEs, developed through a University-Industry cooperation project. The present paper contributes to research objective to reveal how the integration of Industry 4.0 enabling technologies changes the way business modelling and value creation is developed for SMEs. The key research focus is placed here on the modelling of business models as well as in the tools and techniques required (IMTs). The present research is a result of qualitative research activity based on the case study methodological approach, and explores how small enterprises within the Industry 4.0 domain can develop business model innovations, as well as the role of some effective modelling tools towards sustainable competitiveness and smart growth.
Business model innovation, Industry 4.0, University-Industry Collaboration, SMEs.