Business model innovation through the use of digital technologies: Managing risks and creating sustainability

Abstract

In order to gain competitive advantages and maintain high market shares, businesses have to constantly adapt, not only by implementing the latest technology available, but also by creating their own innovations, aiming to make the business both more profitable and more sustainable. Changing the business model by introducing technological and sustainable components puts companies at high risk. On the one hand, medium-sized companies are more flexible, the decision-making process is quicker, and they can more easily adopt change-management strategies, but on the other hand they are more vulnerable to market changes and dependent on constant financial flows. This article analyses the entrepreneurial behaviour of 92 technology-based companies in the European business market through online and face-to-face questionnaires to understand how they generate economic growth by successfully implementing sustainable innovations while avoiding predictable risks and preparing for the unpredictable ones, but also to provide a best-practice guide for likewise companies facing that process. At the same time, for a better understanding of the changes of medium-sized companies, the research is comparing the Eastern and Western Europe. There are not only visible differences in form and style between Eastern and Western European companies, but also differences in risk management, perception of innovation, organization of the business model. The novelty of this study comes from the comparative approach of the two areas in terms of innovation, sustainability and risk management, by highlighting the advantages and disadvantages they face, and by establishing the principles that could make companies in both areas more competitive, being aware of the measures they should take.