Business model pivoting and digital technologies in turbulent environments

Purpose – This paper draws on the Dynamic Capabilities View to discuss how Small and Medium Enterprises (SMEs) use digital technologies to develop digital capabilities that will enable them to change their current business model and trajectory -that is, to pivot- within turbulent environments, and subsequently to survive and grow.

Design/methodology/approach – We collected and analysed qualitative data from 26 SMEs in South-East England that have used digital technologies to pivot during the pandemic. The data was collected via in-depth semi-structured interviews. We analysed the data by creating first-order concepts, second-order themes, and aggregating dimensions.

Findings – Our findings suggest that (i) digital technologies enable pivoting by facilitating the creation of the following digital capability types: ‘digital sensing’, ‘digital seizing’ and ‘digital transforming’; (ii) Each of these digital capability types is underpinned by micro-foundations (sub�capabilities) and shaped by the digital culture of the organisation. (iii) these capabilities are triggered by the turbulent environment and the existing digital technologies, and are shaped by the digital culture.

Originality/value – We contribute to the literature of digital entrepreneurship as we illustrate (i) how the micro-foundations of digital capabilities, as facilitated by digital technologies, assist pivoting; and (ii) the process from key activities during pivoting to second-order themes that represent micro-foundations to digital (dynamic) capabilities for pivoting in turbulent environments. Our study highlights the importance of digital pivoting for businesses in the UK Southeast that have many aspirations for growth and innovation, whilst striving to address multiple challenges including digital divide and literacy, inflation and cost of living crisis, as well as supply chain issues