Business Model for Technological Innovations

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Business models for maximizing the diffusion of technological innovations for climate-smart agriculture

Introduction

The development, adoption and diffusion of pro-environmental technological innovations is critical for enhancing sustainability (EIT, 2014; European Commission, 2014a; Montalvo, 2008). This is also the case with agriculture. Agriculture will adapt to changes in weather patterns associated with climate change and plays a role in limiting greenhouse gas (GHG) emissions (Coumou et al., 2014; Kurukulasuriya and Rosenthal, 2003; Trnka et al., 2014) whilst feeding future global population (Bogdanski, 2012; Nelson, et al., 2009). These challenges mean that the development, adoption and diffusion of appropriate technological innovations is an urgent priority. However, the adoption of technological innovations, including within agricultural contexts, can often be impacted by a range of socio-economic barriers. These barriers impact both the production and marketing of technological innovations, as well as their adoption and use (Montalvo, 2008).

Climate-smart Agriculture (CSA) is a programmatic response to these challenges, seeking to encourage sustainable increases in agricultural productivity and incomes, the building of resilience and adaptation to climate impacts as well as reduction of GHG emissions where possible (FAO, 2010, 2014). As such, innovations consistent with these principles need to be adopted by agri-food chains.

The successful adoption and diffusion of technological innovation is dependent upon many factors. The support of appropriate and effective business models is noted as one promising strategy for enhancing the success of technological innovations (Boons and Lüdeke-Freund, 2013; Teece, 2010). Business model innovation has also been identified as a critical component of the transition to a sustainable future (Hansen et al., 2009). By examining the business models that support technological innovation, key organizational factors that promote or inhibit adoption and diffusion can be identified and explored. In turn, this allows interventions, in terms of changes to business strategy or policy, to be designed. This is especially pertinent for technological innovations for agriculture, as previous business model approaches within this context have to date only considered the user or adopter perspective (Sivertsson and Tell, 2015), or only within developing country contexts (Chesbrough et al., 2006).

In this paper, we identify critical issues for the business models of CSA technological innovation providers. We do this by exploring the barriers of both CSA technological innovation providers and potential users and what they think could enhance diffusion. These factors are then applied to a business model framework, the business model canvas (BMC). Through this process, we show that the current business models employed by CSA technological innovation providers are not optimised to current market demands, and as such, can be seen to be inhibiting the adoption and diffusion of CSA technological innovations.

We are guided by the question: what are the critical issues of CSA technological innovation business model development for the adoption and diffusion of CSA technological innovations?

In order to answer this question, we review previous research on business models and their relationship to innovation and sustainable innovation. Generic critical issues are drawn out from the literature on business models for sustainable innovation (BMfSI); these are mapped onto the much used BMC (Osterwalder and Pigneur, 2009) to create a theoretical framework.

This research is carried out within the context of the CSA Booster, a Climate-KIC funded European project investigating the adoption and diffusion of CSA technological innovations. European technological innovations providers with innovations consistent with the principles of CSA (i.e. that they enhance agricultural productivity and either contribute to climate adaption or mitigation), formed the focus of the empirical investigation.

International Food and Agribusiness Management Review
Volume 20 Issue 1, 2017; DOI: 10.22434/IFAMR2016.0081
Received: 6 April 2016 / Accepted: 12 September 2016
RESEARCH ARTICLE
Thomas B. Long a, Vincent Blokb, and Kim Poldnerc
Postdoctoral fellow in Business Models for Sustainability, Management Studies, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, the Netherlands
Associate Professor in Sustainable Entrepreneurship, Business Ethics and Responsible Innovation, Management Studies, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, the Netherlands
Assistant Professor, Management Studies, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, the Netherlands

Climate change is high on the agricultural policy agenda in the European Union, with actions including European Commission strategies to encourage member states to ‘climate proof’ their agricultural sectors and improve decision-making (European Commission, 2014b).

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