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Business Model Innovation for Digitalization in the Swedish District Heating Sector

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  • Jon Williamsson

    (Department of Business Administration, School of Business, Economics and Law, University of Gothenburg, P.O. Box 100, 405 30 Gothenburg, Sweden)

Abstract

Despite decades of research and development, digitalization remains a key challenge for the Swedish district heating sector. Business model innovation is believed to be necessary to capitalize on digitalization, yet it is especially challenging for municipal companies. This study aims to identify the potential impact of digitalization on the business models of Swedish district heating companies and to analyze the barriers that exist for digital business model innovation. Through case studies of eight municipal district heating companies, this study demonstrates how the entire business model is potentially impacted by digitalization. This study also identifies the barriers to digital business model innovation that are linked to two conflicting views (restrictive versus comprehensive) on digitalization. The restrictive view diminishes the importance of business model innovation, outsourcing innovation to minimize both costs and risks for the company. In contrast, the comprehensive view embraces digital business model innovation through trial-and-error and opens the innovation process to stakeholder influence. These two perspectives are motivated by different beliefs about the need for digitalization to secure future business opportunities, as well as differences in owners’ risk appetite. The implications for industry outlooks and the design of policy support for the digitalization of district heating are discussed.

Suggested Citation

  • Jon Williamsson, 2023. "Business Model Innovation for Digitalization in the Swedish District Heating Sector," Energies, MDPI, vol. 16(21), pages 1-10, November.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:21:p:7457-:d:1274978
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    References listed on IDEAS

    as
    1. Henry Chesbrough & Richard S. Rosenbloom, 2002. "The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin-off companies," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 529-555, June.
    2. Paiola, Marco & Schiavone, Francesco & Grandinetti, Roberto & Chen, Junsong, 2021. "Digital servitization and sustainability through networking: Some evidences from IoT-based business models," Journal of Business Research, Elsevier, vol. 132(C), pages 507-516.
    3. Kensby, Johan & Trüschel, Anders & Dalenbäck, Jan-Olof, 2015. "Potential of residential buildings as thermal energy storage in district heating systems – Results from a pilot test," Applied Energy, Elsevier, vol. 137(C), pages 773-781.
    4. Bolton, Ronan & Hannon, Matthew, 2016. "Governing sustainability transitions through business model innovation: Towards a systems understanding," Research Policy, Elsevier, vol. 45(9), pages 1731-1742.
    Full references (including those not matched with items on IDEAS)

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