The Impact of Technological Turbulence on SMEs Business Model Innovation Performance: The Contingent Role of Entry Order

In this study, we investigate how small and medium-sized enterprises (SMEs) engage in business model innovation in response to technology shifts, and the ensuing impact of this innovation on performance. Using structural equation modeling, we analyze data from a survey of 1328 European SMEs and find...

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Bibliographic Details
Published in:IEEE transactions on engineering management 2024, Vol.71, p.4116-4130
Main Authors: Molina-Castillo, Francisco-Jose, Stanko, Michael A., Islam, Nazrul, de Reuver, Mark
Format: Article
Language:English
Subjects:
Analytical models
Anomaly detection
Business
Business model innovation
business model novelty
business model scope
Business models
Entrepreneurship
entry order
Europe
Industries
Innovation management
Innovations
Market entry
Small & medium sized enterprises-SME
Small business
SMEs
Structural equation modeling
technological turbulence
Turbulence
Uncertainty
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Summary:In this study, we investigate how small and medium-sized enterprises (SMEs) engage in business model innovation in response to technology shifts, and the ensuing impact of this innovation on performance. Using structural equation modeling, we analyze data from a survey of 1328 European SMEs and find that technological turbulence affects the scope and novelty of business model innovation, and that these dimensions of innovation in turn affect firm performance. We show that these relationships are doubly contingent: both SME size (micro, small, or medium) and time since market entry are relevant. Early entrant firms are more responsive to technological turbulence through both dimensions of business model innovation, as the learning accruing in these SMEs since market entry motivates and informs business model innovation. There are meaningful differences in these relationships for micro, small, and medium-sized enterprises. Our findings advance the theoretical understanding of the relationships between technology, entry order, business model innovation, and performance and also serve to inform managers' estimations of the implications of technology turbulence and business model innovation for performance.
ISSN:0018-9391
1558-0040
DOI:10.1109/TEM.2022.3210488