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Special Issue "Leveraging Digitalization for Advanced Service Business Models: Challenges and Opportunities for Circular Economy"

A special issue of Sustainability (ISSN 2071-1050).

Deadline for manuscript submissions: closed (10 January 2018)

Special Issue Editors

Guest Editor
Prof. Dr. Vinit Parida

Luleå University of Technology/University of Vaasa
Website | E-Mail
Interests: servitization; value co-creation; business model innovation; digitalization; organizational capabilities
Guest Editor
Dr. David Rönnberg Sjödin

Luleå University of Technology
Website | E-Mail
Interests: servitization; advanced service innovation; business model innovation; digitalization; open innovation

Special Issue Information

Dear Colleagues,

Industries are entering the fourth industrial revolution (Industry 4.0), which is transforming companies and industrial networks from their roots. Most practitioners view this transformation through a positive lens, according to recent BCG and PwC reports, Industry 4.0 is expected to increase efficiency by 15-20% and account for more than 20% of the revenue generation over the next five years. These numbers highlight that use and application of digital technologies represents a significant potential for business model transformation, while providing new revenue and value-producing opportunities. In manufacturing industry, smart and connected digitalized machines and solutions are expected to result in higher efficiency of resources and equipment and, therefore, simultaneously increase sustainability levels and enable cost reductions by decreasing energy consumption, lower scrap rates, and diminish production downtime through preventive maintenance. These perceived benefits are driving numerous companies to experiment with implementing advanced service business models, in which revenue is generated over the lifecycle according to the delivered solution (e.g. pay-per-service-unit, performance-based).

This special issue calls for a more critical discussion and outlook for creating business value through digitalization. Such a perspective is needed because prior studies acknowledge that many companies focus too heavily on developing digital technology per se rather than leveraging it through development of advance service business models. Business model explains the design or architecture of the company's mechanisms to create, deliver, and capture value. Inferior business models imply that companies would not be able to realize the economic and sustainable value of digitalization transformation. In addition, current advance service business model practices are often too firm-centric rather than industrial network (e.g. providers, customers, service partners, and digital actors) centric. Therefore, important questions related to the digitalization transformation such as distribution of activities, roles, models for cost- and revenue sharing, procurement, value creation and capture are currently left unanswered. Indeed, implementation of such advanced service business models requires a radical transformation of the companies’ ecosystems (especially customers) to a state in which value co-created among providers, ecosystem partners, and customers by optimizing resource usage and operation and leveraging digital technologies.

Against this backdrop the special issue explores contributions focusing on increasing knowledge on how firms can leverage digitalization for advanced service innovation business models. In particular knowledge is sough concerning sustainable business models based on advanced services, which represent the highest potential for environmental impact by incorporating the logic of circular economy. Given the practical and scholarly relevance of to the above stated issues, we call for a holistic and rigorous assessment of this possible digitalization transformation in industrial marketing, strategic management, environmental management and innovation management. Opportunities to elucidate the debate and contribute to this SI are manifold and include, but are not limited to, the following:


Reference

  1. Cenamor, D. Rönnberg Sjödin, V. Parida, Adopting a platform approach in servitization: Leveraging the value of digitalization, International Journal of Production Economics, In press,
  2. Parida, V., Sjödin, D. R., Wincent, J., & Kohtamäki, M. (2014). Mastering the transition to product-service provision: Insights into business models, learning activities, and capabilities. Research-Technology Management, 57(3), 44-52.
  3. Reim, W., Parida, V., & Örtqvist, D. (2015). Product–Service Systems (PSS) business models and tactics–a systematic literature review. Journal of Cleaner Production, 97, 61-75.
  4. Tukker, A. (2004). Eight types of product–service system: eight ways to sustainability? Experiences from SusProNet. Business strategy and the environment, 13(4), 246-260.
  5. Tukker, A. (2015). Product services for a resource-efficient and circular economy–a review. Journal of cleaner production, 97, 76-91.

Prof. Dr. Vinit Parida
Dr. David Rönnberg Sjödin
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Opportunities and benefits with digitalization transformation
  • Dark side of digitalization and organizational change  
  • Digitalization enabled advanced service business models
  • Understanding and aligning key components of advance service business model: value creation, value delivery and value capture
  • Value co-creation in multi-actor ecosystems (including large firms and SMEs)
  • Customer perspective on advanced service business models
  • Achieving circular benefits through advanced services and digitalization

Published Papers (6 papers)

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Research

Open AccessArticle Uncovering Productivity Gains of Digital and Green Servitization: Implications from the Automotive Industry
Sustainability 2018, 10(5), 1524; https://doi.org/10.3390/su10051524
Received: 8 January 2018 / Revised: 3 May 2018 / Accepted: 8 May 2018 / Published: 11 May 2018
Cited by 1 | PDF Full-text (1205 KB) | HTML Full-text | XML Full-text
Abstract
The growing industrial concern about sustainability challenges has driven vehicle and auto parts manufacturers to adopt service capabilities as a way to maintain competitiveness in compliance with environmental regulations. As a result, automakers have progressively integrated digital and green service initiatives to support
[...] Read more.
The growing industrial concern about sustainability challenges has driven vehicle and auto parts manufacturers to adopt service capabilities as a way to maintain competitiveness in compliance with environmental regulations. As a result, automakers have progressively integrated digital and green service initiatives to support operations and address environmental issues effectively. The present study examined the effect of digital and green servitization on the firm’s productivity. To test their effect quantitatively, this study used the ORBIS database to construct a multi-country sample containing 228 companies in the automotive industry. Our findings indicate that implementation of digital and green servitization is positively associated with higher productivity outcomes once the two forms of servitization coexist and operate jointly. Moreover, the results of the study underscore the importance of establishing a successional pathway of implementation priorities. Our evidence suggests that firms willing to offer green services should consider offering digital services first, as this is the only way to obtain productivity gains from green servitization. Full article
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Open AccessArticle Sustainable and Traditional Product Innovation without Scale and Experience, but Only for KIBS!
Sustainability 2018, 10(4), 1169; https://doi.org/10.3390/su10041169
Received: 7 January 2018 / Revised: 3 April 2018 / Accepted: 5 April 2018 / Published: 13 April 2018
PDF Full-text (772 KB) | HTML Full-text | XML Full-text
Abstract
This study analyzes the ideal strategic trajectory for sustainable and traditional product innovation. Using a sample of 74 Costa Rican high-performance businesses for 2016, we employ fuzzy set analysis (qualitative comparative analysis) to evaluate how the development of sustainable and traditional product innovation
[...] Read more.
This study analyzes the ideal strategic trajectory for sustainable and traditional product innovation. Using a sample of 74 Costa Rican high-performance businesses for 2016, we employ fuzzy set analysis (qualitative comparative analysis) to evaluate how the development of sustainable and traditional product innovation strategies is conditioned by the business’ learning capabilities and entrepreneurial orientation in knowledge-intensive (KIBS) and non-knowledge-intensive businesses. The results indicate two ideal strategic configurations of product innovation. The first strategic configuration to reach maximum product innovation requires the presence of KIBS firms that have both an entrepreneurial and learning orientation, while the second configuration is specific to non-KIBS firms with greater firm size and age along with entrepreneurial and learning orientation. KIBS firms are found to leverage the knowledge-based and customer orientations that characterize their business model in order to compensate for the shortage of important organizational characteristics—which we link to liabilities or smallness and newness—required to achieve optimal sustainable and traditional product innovation. Full article
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Open AccessArticle Digital Transformation as an Enabler for Advanced Services in the Sanitation Sector
Sustainability 2018, 10(3), 752; https://doi.org/10.3390/su10030752
Received: 10 January 2018 / Revised: 28 February 2018 / Accepted: 1 March 2018 / Published: 9 March 2018
PDF Full-text (219 KB) | HTML Full-text | XML Full-text
Abstract
People in Base of the Pyramid markets still face difficulties when it comes to sanitation. Container-based Sanitation (CBS) services represent a promising advanced sanitation service. Despite the observed outcomes of CBS services, organizations face obstacles when providing these services. To overcome these obstacles,
[...] Read more.
People in Base of the Pyramid markets still face difficulties when it comes to sanitation. Container-based Sanitation (CBS) services represent a promising advanced sanitation service. Despite the observed outcomes of CBS services, organizations face obstacles when providing these services. To overcome these obstacles, digital transformations of these services are being carried out. We rely on multiple case studies to understand these digital transformations. Our findings highlight (1) the challenges these case organizations faced before engaging in the digital transformation, (2) their individual digital transformation pathways, and (3) a general framework for digital transformations in BoP markets. Full article
Open AccessArticle Circular Business Model Challenges and Lessons Learned—An Industrial Perspective
Sustainability 2018, 10(3), 739; https://doi.org/10.3390/su10030739
Received: 8 January 2018 / Revised: 17 February 2018 / Accepted: 27 February 2018 / Published: 8 March 2018
Cited by 1 | PDF Full-text (1521 KB) | HTML Full-text | XML Full-text
Abstract
Both practitioners and researchers are concerned about resource deficiencies on the planet earth and agree that circular business models (CBMs) represent solutions to move towards zero waste, improving environmental impacts and increasing economic profit. Despite all of the benefits of CBMs, the implications
[...] Read more.
Both practitioners and researchers are concerned about resource deficiencies on the planet earth and agree that circular business models (CBMs) represent solutions to move towards zero waste, improving environmental impacts and increasing economic profit. Despite all of the benefits of CBMs, the implications are not widely available, and failure rates are high. Thus, there is a need to identify the obstacles that stand in the way of CBM transition. This paper aims to identify the primary challenges of CBMs. Multiple case studies are employed, incorporating six companies and data gleaned from 17 in-depth interviews. Theoretical and managerial implications are described at the end of the study. Full article
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Open AccessArticle Exploring How Usage-Focused Business Models Enable Circular Economy through Digital Technologies
Sustainability 2018, 10(3), 639; https://doi.org/10.3390/su10030639
Received: 10 January 2018 / Revised: 13 February 2018 / Accepted: 21 February 2018 / Published: 28 February 2018
Cited by 1 | PDF Full-text (653 KB) | HTML Full-text | XML Full-text
Abstract
Recent studies advocate that digital technologies are key enabling factors for the introduction of servitized business models. At the same time, these technologies support the implementation of the circular economy (CE) paradigm into businesses. Despite this general agreement, the literature still overlooks how
[...] Read more.
Recent studies advocate that digital technologies are key enabling factors for the introduction of servitized business models. At the same time, these technologies support the implementation of the circular economy (CE) paradigm into businesses. Despite this general agreement, the literature still overlooks how digital technologies enable such a CE transition. To fill the gap, this paper develops a conceptual framework, based on the literature and a case study of a company implementing a usage-focused servitized business model in the household appliance industry. This study focuses on the Internet of Things (IoT), Big Data, and analytics, and identifies eight specific functionalities enabled by such technologies (improving product design, attracting target customers, monitoring and tracking product activity, providing technical support, providing preventive and predictive maintenance, optimizing the product usage, upgrading the product, enhancing renovation and end-of-life activities). By investigating how these functionalities affect three CE value drivers (increasing resource efficiency, extending lifespan, and closing the loop), the conceptual framework developed in this paper advances knowledge about the role of digital technologies as an enabler of the CE within usage-focused business models. Finally, this study shows how digital technologies help overcome the drawback of usage-focused business models for the adoption of CE pointed out by previous literature. Full article
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Open AccessArticle Environmental Orientation in Swedish Local Governments
Sustainability 2018, 10(2), 459; https://doi.org/10.3390/su10020459
Received: 10 January 2018 / Revised: 3 February 2018 / Accepted: 6 February 2018 / Published: 9 February 2018
PDF Full-text (399 KB) | HTML Full-text | XML Full-text
Abstract
This study explores the environmental orientation in Swedish local governments. Environmental concerns over potential risk factors have become more important and popular among public organizations and environmental improvement efforts are made to create a sustainable ecosystem for the actors doing business, living and
[...] Read more.
This study explores the environmental orientation in Swedish local governments. Environmental concerns over potential risk factors have become more important and popular among public organizations and environmental improvement efforts are made to create a sustainable ecosystem for the actors doing business, living and working in the area. Prior research indicates that public organizations have started to become more environmentally oriented in order to take on more responsibilities for reducing their own environmental impact as well as influencing the citizens and local businesses in the direction of a more sustainable way of living and working. Through a survey of Swedish local governments we conclude that they are taking on a key role in developing a sustainable ecosystem through becoming more environmentally oriented. This includes developing a framework for setting environmental goals, identifying suitable environmental indicators and reporting to a wide range of stakeholders. A factor that explains the increasing environmental orientation in the public sector is the implementation of digitalized performance measurement systems. We find that the environmental performance measurements are used to motivate different internal and external stakeholders in the efforts to create a multi-actor ecosystem. Full article
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