Article Preview
TopIntroduction
Taking a research outcome to the market is a complex issue. First, from a technical standpoint, it should target a ‘real’ problem or need. Second, the value in such an undertaking lies in, and is directly correlated to, addressing a problem that is shared by a significant number of people and/or a considerable section of the market. In practice, a business solution should perform better than the alternatives that these people may have access to, where they are willing to pay in exchange for receiving the business’s services and/or products in question. Finally, the business should naturally have one or more ways of generating revenue, to capture a large enough share of the overall value created; put differently, a good business model should be in place.
Recently, the authorship team had participated in an EU-funded H2020 project, EU-SysFlex, aiming to design viable solutions within a complex system, namely the European electricity system in which, by 2030, 50% of the electricity is expected to be sourced from renewable energy sources (RES). The team’s role in the project was to help its project partners to commercially deploy some of their technically-proven solutions (herein referred to as ‘exploitable results’ - ERs). The European electricity system is and will remain a complex system, driven by the ever-increasing integration of RES, mostly solar and wind energies (Sajadi et al., 2019). The system is expected to become even more complex with the entry of Flexibility Asset Owners (FAO) – owners of assets that could provide electricity flexibility to the grid – who could potentially participate in the management of the grid (Bell & Gill, 2018). As far as the EU-SysFlex project was concerned, the focus was on real business opportunities for technically-demonstrated solutions, assuming that viable businesses could be deployed and provided that suitable business models were identified and successfully implemented.
Here, a business model is defined as the logic and architecture of economic and societal value creation and value capture that allows a firm to attain a competitive advantage and/or to create a new market (Rohrbeck et al., 2013). Alternatively, a business model is defined as a strategic tool for designing business activities as well as for comprehensive, cross-company description and analysis (Fraccascia et al., 2019). A large section of the literature has recently focused specifically on innovations in business models, especially with the rise of new types of businesses (e.g., Chesbrough, 2007; Chesbrough, 2010; Schneider & Spieth, 2013; Massa & Tucci, 2013; Foss & Saebi, 2017), including sustainability-oriented ones (Yang et al., 2017; Geissdoerfer et al., 2018). In setting out to build and/or create innovative business models, a set of tools have, relatively recently, been developed and have become widely applied by researchers, entrepreneurs and business managers alike (Keane et al., 2018). These have generally taken the form of canvases which, while being comprehensive in describing the different characteristics of a business, do not focus on the values generated and interchanged within the business’s ecosystem, and on the partners of the focal firm in question. This is the central gap that this article seeks to address.
In order to analyze the value created in the mentioned ERs, the authorship team explored tools to do so. The ERs often treat complex new businesses which arise due to the splitting up of traditional value creation chains/networks, regulatory changes, introduction of new technologies, and/or the participation of clients/users in the value creation processes. To address the complexity of visualizing the values created and captured by these new businesses, this article uses a new conceptual instrument to more effectively design business models, called the ‘Value Creation Ecosystem’ (VCE). This article provides a description of the instrument’s structure, functionality and applicability, using the electricity system as a case study.