Business Model Innovation and Renewable Energy Application: Scalability of SMEs in sub-Saharan Africa

Business Model Innovation (BMI) has become a dominant phenomenon of discourse in management literature. Particularly in explaining value identification, value creation and value capture, BMI provides a contemporary perspective into understanding how businesses innovatively apply strategies in order to maintain sustainable competitive advantage. The need to have an extra competitive has increased in importance due to a number of salient factors such as a higher number of players within markets, sectors and industries around the world. A heightened accessibility to resources hinging on the fourth and fifth industrial revolutionary advancements also provides another reason for the emergence of more businesses. Be that as it may, the manner in which BMI effectively captures valuable competitive advantage may vary due to influences of internal capability and their reactions to external influences. Understanding these influences demands capturing the full spectrum of BMI as extant literature identifies that there are still limitations in BMI knowledge to provide more construct clarity.

For this reason, this research aims firstly to contribute to understanding the spectrum of BMI application. Particularly, we look at exploring BMI through the lenses of small and medium scale enterprises (SMEs). SMEs represent a vibrant sector in many economies across the globe, however, their individual limitations in capacity and efforts to navigate the respective business environments prompt the need to be inventive when deploying their strategies. This provides fertile grounds to explore and capture the innovative intricacies which contribute to their BMI capabilities. The second aim of this research is to capture the manner in which these SMEs operate and interact with the environmental business factors surrounding them, and how such factors affect their BMI process. The study adopts a qualitative multiple-case study approach in order to explore the phenomena of SMEs' innovative capabilities (IC) and the interactions of those capabilities with the business environment. The case study approach presents the best opportunity in exploring BMI to unearth the unknown nuances and contribute to the limited clarity of BMI application. We specifically looked into ten cases situated in the renewable energy industry in Nigeria. The industry is still in its infancy and the companies are within the SME development phase. The research also adopts the interpretivist philosophy and inductive approach by observing, analysing and contributing to the concept of BMI. Specifically, while there has been research exploring the concept of BMI there is still limited knowledge in perspectives of SMEs in the renewable energy industry in sub-Saharan Africa. Our research contributes to that specific and is limited in scope.

Through the study we have been able to derive valuable insights in terms of SME innovative capability. The first major finding is in the form the identifying the Innovative Capability development framework for SME-BMI. This entails the starting point of the IC process through gumptious, which are personnel level traits (PLTs). These PLTs provide influencing building blocks which are enterprise-level-traits (ELT) of dynamic capabilities into the ELT stage. And the final stage of the process is the core innovative capability prisms (CICP), which are the major pathways through which SMEs channel their IC. The second major contribution provides an insightful framework for understanding SME interrelationships with external factors. This framework is the stakeholder value co-creation swivel which captures the salient necessity of important stakeholder relationships and ensures mutual value is created and managed with all stakeholders for the benefit of the SME. These findings have valuable theoretical and practical implications. Theoretical implications include the enriching discussions of the nuanced nature of BMI application for growth and the instrumental value of stakeholders in relation to SME literature. Practical implications are the multidimensional nature with which the aforementioned frameworks can be adopted in understanding the peculiar capabilities available to them when considering contemporary strategies for maintaining innovativeness and extracting the most out of their stakeholder relationships. Investigating this within the renewable energy industry also contributes to the originality of this research.