Social Business Models In The Digital Economy: New Concepts And Contemporary Challenges 3030297314, 9783030297312, 9783030297329

Table of contents :
Preface
......Page 5
Contents......Page 10
About the Authors......Page 14
List of Figures......Page 16
List of Tables......Page 19
1.1 Introduction......Page 21
1.2 Society and Community in the Network or the Network Society......Page 26
1.3 The Social Perspective of Conducting Business Activity in the Modern Economy......Page 27
1.4 The Theoretical Framework of the Social Aspects of Business Models in the Digital Economy......Page 30
1.5 The Potential of the Digital Economy to Develop Socially Oriented Activities......Page 33
1.6 Business Models—Strategic Assumptions in the Social Economy......Page 34
1.7 The Identification of Selected Social Aspects of Business Models in the Digital Economy......Page 37
1.8 Sustainable Business Models and Hybridization and the Development of Social Issues......Page 38
1.9 Conclusion......Page 41
References......Page 42
2.2 The Determinants of the Development of the Digital Economy......Page 45
2.3 Description of the Key Concepts of the Digital Economy......Page 52
2.4 The Features of Social Business Models in the Cognitive Perspective of the Digital Ecosystem......Page 54
2.5 A Digital Business Ecosystem as an Environment of the Resilient Business Models of Companies......Page 63
2.6 The Operationalization of Resilient and Robust Business Models in the Digital Economy......Page 65
References......Page 67
3.1 Introduction......Page 70
3.2 “Open Data” Concept and Business Models......Page 72
3.3 The Assumptions of Digital Sharing Economy Business Models......Page 81
3.4 Circular Business Models......Page 88
3.5 Stock Indices in Shaping Robust Business Models in the Circular Economy......Page 96
3.5.1 Circular Index......Page 97
3.6 Conclusion......Page 101
References......Page 103
4.1 Introduction......Page 108
4.2 Value and Its Determinants in Modern Business......Page 110
4.3 Trust and Digital Trust in Constructing Digital Economy Social Business Models......Page 115
4.4 Social Aspects of Contemporary Business Models......Page 121
4.5 Social Digital Innovations in Building Social Business Models......Page 127
4.6 Sustainable Value Management and the Perspective of Business Models......Page 130
4.7 Conclusion......Page 132
References......Page 133
5.1 Introduction......Page 138
5.2 The Value Economy Against the Background of a Paradoxically Better Reality......Page 139
5.3 Social Aspects as an Important Part of the Foundation of a Society......Page 140
5.4 Conclusion......Page 150
References......Page 152
6.1 Introduction......Page 157
6.2 Sustainable Business Model Archetype Rules......Page 161
References......Page 163
7.1 Introduction......Page 166
7.2 The Specificity of Public Services......Page 167
7.4 A Hybrid Approach in the Strategic Management of an Organization......Page 169
7.5 A Hybrid Organization Managed with the Use of a Strategic Hybrid......Page 173
7.6 Hybrid Business Models—Assumptions......Page 179
7.7 Innovation and Business Models......Page 180
References......Page 186
8.2 The Application of the Business Model Canvas to Create Social Business Models......Page 189
8.3 Conclusion......Page 195
References......Page 196
9.1 Introduction......Page 197
9.2 Methodology......Page 201
The Idea and Its Operationalization......Page 205
Technology Platform......Page 206
Economic Effect......Page 207
The Idea and Its Operationalization......Page 208
Economic Effect......Page 209
The Idea and Its Operationalization......Page 210
Technology Platform......Page 211
The Idea and Its Operationalization......Page 212
Technology Platform......Page 213
Social Effect......Page 214
Technology Platform......Page 216
The Idea and Its Operationalization......Page 218
Technology Platform......Page 219
Community Building......Page 220
The Idea and Its Operationalization......Page 221
Technology Platform......Page 222
Social Effect......Page 223
The Idea and Its Operationalization......Page 224
Technology Platform......Page 225
Economic Effect......Page 226
Technology Platform......Page 227
Social Effect......Page 228
Technology Platform......Page 229
Community Building......Page 230
Economic Effect......Page 231
9.3 Analysis of Results......Page 232
References......Page 234
Conclusion......Page 237
Index......Page 243

Citation preview

Adam Jabłoński Marek Jabłoński

Social Business Models in the Digital Economy New Concepts and Contemporary Challenges

Social Business Models in the Digital Economy

Adam Jabłoński • Marek Jabłoński

Social Business Models in the Digital Economy New Concepts and Contemporary Challenges

Adam Jabłoński WSB University in Poznań Poznań, Poland

Marek Jabłoński WSB University in Poznań Poznań, Poland

ISBN 978-3-030-29731-2    ISBN 978-3-030-29732-9 (eBook) https://doi.org/10.1007/978-3-030-29732-9 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface

In recent years, the issue of business models has been the subject of many theoretical and practical discussions. Business management enthusiasts search for effective and efficient solutions that not only have a positive impact on the success of companies but also aim to maintain synergy with the external and internal environment. Shaping positive relationships with the business ecosystem is a condition for ensuring the long-­ term and sustainable development of modern enterprises. Social aspects are of key importance in the era of global access to information and knowledge. The attractiveness of business models depends to a large extent on the social acceptance of the proposed solutions. In the case of innovations in the field of digital business models, two areas concerning social issues play a key role. The condition for the monetization of digital business models is to gather a user community that ensures a constant flow of information, knowledge and money around the ideological driver of the business model. The construction of digital business models strongly depends on the size of the community around them. The first and most important goal of designing digital business models is building a community based on an attractive value proposition for societies. It must be broadly socially accepted so that it can solve problems in a universal way, regardless of cultural factors. The second area concerning social issues is to ensure a positive focus on the performance of compav

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nies, using social business models which meet the needs of the global economy. They allow for the achievement of the expected financial results while at the same time respecting ethical and ecological aspects. They fit in with social expectations through the types of created value embedded within the framework of the value economy. Only socially acceptable ideas that generate positive results in terms of business ethics have a chance to exist in the modern business space. The embedding of social business models in the realities of the digital economy highlights social needs that can be satisfied through the use of innovative technologies. These technologies that underlie the creation of modern digital applications enable the delivery of a socially attractive value proposition to recipients. The positive ambassadors of the proposed business models can be application users as well as potential users. The recommendations of societies determine the existence of innovative business models. Therefore, the creators of current business models orient their ideas towards mass recipients who share the same social expectations and views on the quality of life in the modern world. The concepts of the sharing economy, Big Data and the circular economy create opportunities for designing social business models that suit the current needs of recipients and societies. Digital platforms enable the conceptualization and operationalization of digital business models. Information technologies ensure the delivery of value propositions. In the entire ideological model, social ecosystems are developed and stimulated by social media and digital platforms. Man interacts with machines on the basis of social expectations, and these machines provide them with easier access to goods. The socialization of the economy is stimulated in this aspect by replacing traditional business models with digital business models, based on social factors stimulated by the concepts of the sharing economy and the circular economy. Hybrid business models are created on the boundaries of business and public services. The broad approach to the concept of sustainability is developing dynamically. Balancing economic, social and environmental goals is built into the current trends of the digital economy. The problem thus outlined became the subject of theoretical and practical discussion included in this monograph. This book is devoted to the identification of key problems of modern business based on strong social conditions. This monograph consists of

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nine chapters covering theoretical issues and also those of an application nature. Chapter 1, titled “Social issues and sustainability in contemporary business”, is a theoretical foundation for understanding the idea of the publishing project in question. It indicates the role of societies in shaping business models operating in the digital economy. This chapter served as an introduction to a further discussion on embedding social issues in the digital economy, in the context of the conditions for the functioning of the concept of business models. Chapter 2 deals with the impact of digital technology on creating new markets and the behavior of people. This is particularly important in identifying the determinants of the development of the digital economy and the possibilities that it creates for modern business architects. Explaining the phenomenon of the digital economy allows for a better understanding of the subsequent chapters. Chapter 3 highlights new economy business models in the concepts of BIG DATA, the sharing economy and the circular economy. A thorough discussion of these concepts allows for the identification of opportunities to shape digital business models based on their assumptions. The DNA of these concepts allows us to shape entire families of business solutions that change the principles of utilizing resources, moving, spending leisure time, living, communicating, learning, making relationships and consequently the way of life. Chapter 4 refers to the assumptions of social business models in the digital economy—a new look at the social aspects of new entrepreneurship. The issues addressed in this chapter are focused on areas such as value and its determinants in contemporary business, digital trust, as well as social innovations that constitute and stimulate entrepreneurial behavior. Chapter 5 presents an important element of the social approach to the design of business models, namely the value economy and its influence on shaping social business models. The value economy can be an important element in the development of a pro-social approach to shaping digital business models based on social factors. Chapter 6 covers the important issue of creating sustainable business models in the digital and network economy. The concept of sustainable

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business models is becoming a very important topic of an interdisciplinary nature that affects numerous issues, not only social but also technical. It highlights the eclectic approach by integrating many other important fields of science. Chapter 7 goes beyond the digital economy but has much to offer it, especially in the context of seeking synergies between business and public administration to achieve satisfactory work outcomes focused on urban and rural residents in order to improve the quality of public services through effectively managed companies. These solutions can be mutually supportive rather than mutually exclusive in terms of social interest. Chapter 8 is of an application nature. A configuration approach was used for the proposed model, where social factors and actions aimed at implementing social objectives were emphasized. Chapter 9 is purely utilitarian, where the idea was to present the best practices of social business models in the context of the global digital economy. Five areas which shape two key pillars of digital economy activity, namely economic and social pillars, were defined in the proposed target model. The key aspect of creating value resulting from the social criterion of business model assessment is to define variables which describe business models in this subject criterion. Five areas were selected based on the review of the relevant literature, which were based on five key questions: 1. What is the idea—what are the key assumptions of the business model of a given enterprise? 2. On the basis of which technology platform (multi-platform environment) does a business model operate? 3. How does the business model affect community building? 4. How does the business model create a social effect and what does it express? 5. What economic effect does an enterprise achieve based on the adopted business model—capitalization, profits, exchange-rate indices, or another? The adopted research model, as part of the use of secondary data, is based on data from the Forbes ranking of top global digital companies. On 20 September 2018, Forbes released the inaugural Digital 100 list, a

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ranking of the top 100 public companies that shape the digital economy. The list offers a closer look at companies from the technology, media, digital trade and telecommunications industries that shape the digital world. These companies were used to develop an original framework to describe business models based on social factors. In order to conduct a detailed analysis of digital business models to assess the place and role of social factors, the top 10 companies in the Forbes ranking were selected. It was determined that such a research sample would allow for the assessment of the influence of digital business on social impact. Such research helped distinguish different strategies of taking social factors into account in the configuration of digital business models. The work ends with conclusions which are the summary of the discussions in this monograph. The aim of this monograph is to present the contemporary determinants of the design of social business models in the context of the dynamic development of the digital economy. It should be noted that the target audience of this monograph should be enthusiasts of the issue of shaping contemporary business models based on social factors. These should include researchers, managers and students of social and economic fields of study, particularly those dealing with management issues in the contemporary turbulent business environment. The work can be the inspiration for further research, as well as searching for new trends and cognitive gaps in economic sciences. This book should contribute to the better recognition of the issue of social business models in the digital economy—new concepts and contemporary challenges. The authors hope that this subject will be of interest to readers and will allow for the explanation of a series of issues, challenges and trends of the modern digital economy currently discussed in terms of social determinants. Poznań, Poland June  2019

Adam Jabłoński Marek Jabłoński

Contents

1 Social Issues and Sustainability in Contemporary Business  1 1.1 Introduction   1 1.2 Society and Community in the Network or the Network Society  6 1.3 The Social Perspective of Conducting Business Activity in the Modern Economy   7 1.4 The Theoretical Framework of the Social Aspects of Business Models in the Digital Economy  10 1.5 The Potential of the Digital Economy to Develop Socially Oriented Activities  13 1.6 Business Models—Strategic Assumptions in the Social Economy 14 1.7 The Identification of Selected Social Aspects of Business Models in the Digital Economy  17 1.8 Sustainable Business Models and Hybridization and the Development of Social Issues  18 1.9 Conclusion  21 References 22

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2 The Impact of the Digital Technology Revolution on Creating New Markets and People’s Behavior 25 2.1 Introduction  25 2.2 The Determinants of the Development of the Digital Economy 25 2.3 Description of the Key Concepts of the Digital Economy 32 2.4 The Features of Social Business Models in the Cognitive Perspective of the Digital Ecosystem  34 2.5 A Digital Business Ecosystem as an Environment of the Resilient Business Models of Companies  43 2.6 The Operationalization of Resilient and Robust Business Models in the Digital Economy  45 2.7 Conclusion  47 References 47 3 New Economy Business Models in the Concepts of Big Data, the Sharing Economy and the Circular Economy 51 3.1 Introduction  51 3.2 “Open Data” Concept and Business Models  53 3.3 The Assumptions of Digital Sharing Economy Business Models 62 3.4 Circular Business Models  69 3.5 Stock Indices in Shaping Robust Business Models in the Circular Economy  77 3.6 Conclusion  82 References 84 4 Social Business Models in the Digital Economy—A New Look at the Social Aspects of New Entrepreneurship 89 4.1 Introduction  89 4.2 Value and Its Determinants in Modern Business  91 4.3 Trust and Digital Trust in Constructing Digital Economy Social Business Models  96 4.4 Social Aspects of Contemporary Business Models 102

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4.5 Social Digital Innovations in Building Social Business Models108 4.6 Sustainable Value Management and the Perspective of Business Models 111 4.7 Conclusion 113 References114 5 The Value Economy and Its Influence on Shaping Social Business Models119 5.1 Introduction 119 5.2 The Value Economy Against the Background of a Paradoxically Better Reality 120 5.3 Social Aspects as an Important Part of the Foundation of a Society 121 5.4 Conclusion 131 References133 6 Creating Sustainability Business Models in the Digital and Network Economy139 6.1 Introduction 139 6.2 Sustainable Business Model Archetype Rules 143 6.3 Conclusions 145 References145 7 Hybridization as a New Way of Building Social Business Models149 7.1 Introduction 149 7.2 The Specificity of Public Services 150 7.3 Intelligent Public Services as a Carrier of Hybrid Business Models 152 7.4 A Hybrid Approach in the Strategic Management of an Organization152 7.5 A Hybrid Organization Managed with the Use of a Strategic Hybrid 156

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7.6 Hybrid Business Models—Assumptions 162 7.7 Innovation and Business Models 163 References169 8 Conceptualization and Operationalization of Social Business Models in the Digital Economy173 8.1 Introduction 173 8.2 The Application of the Business Model Canvas to Create Social Business Models 173 8.3 Conclusion 179 References180 9 Best Practices of Social Business Models in the Global Digital Economy181 9.1 Introduction 181 9.2 Methodology 185 9.3 Analysis of Results 216 References218 Conclusion221 Index227

About the Authors

Adam Jabłoński  is an associate professor at WSB University in Poznań, Faculty in Chorzów, e-mail: [email protected]. He is the Head of Scientific Institute of Management. He is Vice President of the Board of “OTTIMA Plus” Ltd. of Katowice, a reputable management consulting company, and President of the “Southern Railway Cluster” Association of Katowice, which supports development in railway transport and the transfer of innovation, as well as cooperation with European railway clusters (as a member of the European Railway Clusters Initiative). He holds a postdoctoral degree in Economic Sciences, specializing in Management Science. Having worked as a management consultant since 1997, he has broadened his experience and expertise through cooperation with a number of leading companies in Poland and abroad. He is the author of a variety of studies and business analyses on business models, value management, risk management, the balanced scorecard and corporate social responsibility. He has also written and co-written several monographs and over 100 scientific articles in the field of management. Adam’s academic interests focus on the issues of modern and efficient business model design, including Sustainable Business Models and the principles of strategy for building company value that includes the rules of corporate social responsibility.

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About the Authors

Marek Jabłoński  is an associate professor at WSB University in Poznań, Faculty in Chorzów, Poland, e-mail: [email protected]. pl. He is the Head of Scientific Institute of Entrepreneurship and Innovation. He is President of the Board of “OTTIMA Plus” Ltd. of Katowice, a reputable management consulting company, and Vice President of the “Southern Railway Cluster” Association in Katowice which supports development in railway transport and the transfer of innovation, as well as cooperation with European railway clusters (as a member of the European Railway Cluster Initiative). He holds a postdoctoral degree in Economic Science, specializing in Management Science in the following range of topics: Value Based Management, Performance Management and Business Models. Having worked as a management consultant since 1997, he is the author of a variety of studies and business analysis on business models, creating shareholder value, the balanced scorecard and implementing the high-­performance organization concept. He has also written and co-written several monographs and over 100 scientific articles in the field of strategic management, performance management and business models. Marek’s academic interests focus on the issues of strategic value, innovative business models, measurement systems of results including companies listed on the stock exchange and the principles of creating shareholder value and new trends in this area.

List of Figures

Fig. 1.1 A model linking the concept of the new economy with shaping social business models in the digital economy. (Source: Own study)2 Fig. 1.2 Classification of enterprises. (Source: Own study based on Hyup Roh 2016) 8 Fig. 1.3 Interdependence of the value drivers of social business models. (Source: Spieth et  al. 2018, https://doi.org/10.1016/j. lrp.2018.04.004, p. 11) 10 Fig. 1.4 The general concept of sustainable business model archetypes. (Source: Bocken et al. 2014) 20 Fig. 1.5 The sustainable business model archetypes. (Source: Own study based on Bocken et al. 2014) 20 Fig. 3.1 Model V for the Big Data concept. (Source: Brock and Khan 2017, p. 7) 53 Fig. 3.2 Elements of the networked business model. (Source: Palo and Tähtinen 2013, No. 42, p. 774) 58 Fig. 3.3 Elements of business model design. (Source: Teece 2010, p. 173)59 Fig. 3.4 Sharing Business Model Compass. (Source: Cohen and Muñoz 2017)63 Fig. 3.5 The sharing economy as a result of several overlapping concepts. (Source: Acquiera et al. 2017, pp. 3–7) 68

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List of Figures

Fig. 3.6 Conceptual framework of the sharing economy business model. (Source: Kumar et al. 2018, p. 148) 69 Fig. 3.7 Comparison of traditional, sustainable and circular business models. Zła numeracja. (Source: Geissdoerfer et  al. 2018, p. 714)74 Fig. 4.1 Paradox of value. (Source: Own study based on Eggert et  al. 2018, p. 82) 92 Fig. 4.2 Value architecture. (Source: Own study based on Keen and Williams 2013, p. 645) 94 Fig. 4.3 Particularities of social business models. (Source: Own study based on Spieth et al. 2018, p. 7) 104 Fig. 4.4 Distinguishing positive marketing from cause, green and social marketing. (Source: Own study based on Gopaldas 2015, p. 2447)106 Fig. 4.5 The Concepts of Value in Online Relationships. (Source: own study based on Kukkonen 2018, p. 66) 107 Fig. 4.6 Framework for Managing Customer Value in Online News Channel Relationships. (Source: Own study based on Kukkonen 2018, p. 71) 107 Fig. 4.7 Social effect in the six-phase process of social innovation. (Source: Own study based on Murray et al. 2010) 111 Fig. 4.8 Sources of financial and social value creation for creating sustainable value. (Source: Own study) 112 Fig. 7.1 Modified Hybrid Scorecard of a company embedded in the network. (Source: Jabłoński 2015, p. 54) 157 Fig. 7.2 Model of a hybrid performance management system of a company embedded in the network. (Source: Jabłoński 2015, p. 57) 159 Fig. 7.3 Operationalization of the hybrid measurement system of a company embedded in the network (Source: Jabłoński 2015, p. 57)159 Fig. 7.4 Relationship between innovation potential and time. (Source: Gassmann et al. 2014, p. 21) 165 Fig. 7.5 Key components of the business model. (Source: Osterwalder et al. 2010) 165 Fig. 8.1 Osterwalder’s nine-component business model. (Source: Gordijn et al. 2005, p. 4) 176 Fig. 8.2 The Business Model Canvas/Source: adapted from Osterwalder and Pigneur (2010). (Source: Sparviero 2019, p. 6) 176

  List of Figures 

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Fig. 8.3 The Social Enterprise Model Canvas/Source: the author. (Source: Sparviero 2019, p. 15) 177 Fig. 9.1 The model for the description of digital business models in terms of the social criterion. (Source: Own study) 183 Fig. 9.2 The results of Amazon business model analysis. (Source: Own study)190 Fig. 9.3 The results of Netflix business model analysis. (Source: Own study)192 Fig. 9.4 The results of NVIDIA business model analysis. (Source: Own study)194 Fig. 9.5 The results of “Salesforce.com” business model analysis. (Source: Own study) 197 Fig. 9.6 The results of “ServiceNow” business model analysis. (Source: Own study) 201 Fig. 9.7 The results of Square business model analysis. (Source: Own study)203 Fig. 9.8 The results of “Analog Devices” business model analysis. (Source: Own study) 206 Fig. 9.9 The results of “Palo Alto Networks” business model analysis. (Source: Own study) 209 Fig. 9.10 The results of “Splunk” business model analysis. (Source: Own study)211 Fig. 9.11 The results of “Adobe Systems” business model analysis. (Source: Own study) 214

List of Tables

Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table 2.7 Table 2.8 Table 2.9 Table 2.10 Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7

The 10 most “subversive” business models 29 Selected business models of the digital economy 31 Description of the selected concepts of the digital economy 33 Features, challenges and requirements related to Industry 4.0 34 Key features of the market business model 35 List of the scalability parameters of the business model in the network together with their interpretation 37 Summary of the business indicators of resilience 38 Features of the primary and secondary robust systems depending on the life cycle of the organization along with the evolution of its business model 40 Comparison of parts of the digital ecosystem 44 Mindset for the Internet of Things (IoT) industry 46 Selected business models that use the OGD 55 Empty template of the funnel matrix 61 Sharing economy sustainable development perspectives 65 Narrow and broad definitions of the sharing economy 66 Business models in the sharing economy 70 Deployment of sustainability dimensions in circular business models76 Comparative analysis of the Circular Index and Respect Index in relation to adopted, selected criteria 79

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List of Tables

Table 3.8 Examples of selected sustainable development indicators and circular indicators for the Circular Index 81 Table 4.1 Different approaches to value in the context of the assumptions of the concept of business models 93 Table 4.2 Co-creation and co-destruction of value in different types of relationships95 Table 4.3 Definitions of trust 97 Table 4.4 Digital trust—examples of definitions 100 Table 5.1 Definitions of social entrepreneurship 122 Table 5.2 Definitions of social entrepreneurs 127 Table 5.3 Definitions of social enterprises 129 Table 6.1 Sustainable business model archetypes for the design of digital business models 144 Table 7.1 Classification of modern public services 151 Table 7.2 Typology of the hybrid approach—selected aspects 155 Table 7.3 Innovative business model—the indication of changes in configuration elements 167 Table 8.1 Nine fundamental components of the business model 175 Table 8.2 Examples of solutions in the sphere of business model decomposition178 Table 9.1 Forbes ranking of the 100 best digital companies 186 Table 9.2 Selected companies analyzed according to the developed model189

1 Social Issues and Sustainability in Contemporary Business

1.1 Introduction Along with changes on the global markets, in the context of the development of the digital economy, social factors have a different, more important meaning. Community building is becoming the key goal of the creators of modern business models. The community gathered around a given idea operationalized through a business model embedded in a specific technology is a driver of cash flows based on the assumptions of the adopted method of monetization. The model of linking the concept of the new economy with the assumptions of shaping social digital business models presented in Fig. 1.1 indicates the key trends of modern business. The platform of the digital business ecosystem creates the conditions for creating and implementing the determinants of the concept of the positive value economy. The environment of the digital economy enables the development of innovative concepts such as the sharing economy, Big Data and the circular economy. The effectiveness of implementing business models based on these concepts results from the need to build a community. The larger the community focused on the activities around the proposed solution is, the greater the chance for future financial © The Author(s) 2020 A. Jabłoński, M. Jabłoński, Social Business Models in the Digital Economy, https://doi.org/10.1007/978-3-030-29732-9_1

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A. Jabłoński and M. Jabłoński

New Ideas of Economy B U I L D I N G O F C O M M U N I T Y

Sharing Economy

BIG DATA

Circular Economy

TRIPLE BOTTOM LINE B U S I N E S S M O D E L S

S O C I A L E N T R E P R E N E U R S H I P

S U S T A I N A B L E B U S I N E S S M O D E L S

H Y B R I D B U S I N E S S M O D E L S

N E W B E H A V I O R

Social Effects New Behaviors of Community

O F P E O P L E

DIGITAL ECONOMY ECOSYSTEM POSITIVE VALUE ECONOMY

Fig. 1.1  A model linking the concept of the new economy with shaping social business models in the digital economy. (Source: Own study)

­ onetization. The assumptions of the aforementioned market solutions m create social business models, for which the starting point is the theoretical concept of the Triple Bottom Line, widely recognized both in the relevant literature and practice. So far, however, this has been based on the traditional approach. The digital economy is currently providing opportunities to verify this concept under the new conditions of company operation. In this way, business models based on the foundations of the Triple Bottom Line concept are often called sustainable business models. Digital business models which have social aspects built into their formula resulting from the potential of technology are created; social enterprises are designed whereby a social factor is the fundamental driver

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of their business models, as well as hybrid business models which combine commercial activity and public activities. These new conditions change people’s behavior and also bring about an improvement in their quality of life in many places around the world. As a result of this new trend, positive social effects and new positive behaviors of entire human communities are created. Currently, these conditions are leading to a redefinition of modern business, where the goal of companies should not only be to maximize financial profit but also to create social profit; that is, the effect of the business model which is commonly accepted and in line with the expectations of stakeholder groups. From this perspective, social business models are what should now be focused on. The social acceptance of innovative solutions in the information society determines the ability to make progress and meet challenges of civilization such as climate change, the migration of people, digital exclusion, and access to education and information. The digital business model should be looked at with the hope that the next generation of industry and services development, that is, Industry 4.0 and Service Management 4.0, will bring business to a higher level suitable for the current development of civilization through the conceptualization and operationalization of digital business models. Social issues have an important dimension in the context of building new business and ventures. In the context of the assessment of the activities of companies oriented at creating profitability, how this income is generated and what kinds of value ventures can create are important. A sustainable approach is the result of a different approach to defining the purpose of enterprises. At present, goals are focused on building communities and relationships with business stakeholders, while monetization is postponed until sometime in the future. The priority is to build a digital brand of a company that has an impact on communities, their lifestyle, understanding the world and perceiving values. This chapter describes contemporary trends in building social attitudes through participation in ventures and creating communities sharing the same values, interests and priorities. This chapter also presents a review of the literature as well as current trends emerging in the business space, which have a significant impact on building social bonds, creating social values and building a sustainable business activity model in the digital economy.

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Social issues have an important dimension in the context of building new companies and undertakings. In the context of the assessment of the operation of companies focused on profitability, it is important to know how revenue is generated and what types of values an undertaking can create. A balanced approach is the result of a different approach to defining the purpose of enterprises. Currently, the goals of creating business models are focused in many cases on building communities and relationships with business stakeholders, and their monetization is postponed until the future. The priority is to build a company’s digital brand that impacts the community, their lifestyle, understanding the world and perceiving values. Contemporary trends, operationalized through business models, help build social attitudes through participation in undertakings and the creation of communities sharing the same values, interests and priorities. The literature review and observation of economic phenomena in the business space confirm the significant impact of new business solutions based on technological solutions on building social bonds, creating social values and building a sustainable business activity model in the digital economy. Modern technological solutions create the conditions for shaping social attitudes and undermine the existing principles of classical economics. Markets which have an increasingly ontological character are emerging parallel to existing ones. The virtual world creates new markets, establishes the new principles of cooperation between people and creates new communication formulas. The old action model based on a contractual approach turns into a relational approach. Social and personal interactions are important factors that motivate people to conduct transactions (Mauri et al. 2018, p. 42). The technological revolution generates solutions in the social sphere, establishing new principles of creating markets and people’s behavior. The influence of digital technology on these aspects is visible. New concepts and ideological trends are operationalized through innovative technological solutions, which allow for the implementation of global solutions whose potential is not yet fully utilized. This is not only due to technological problems, but also due to sociological ones, whereby new generations use these solutions to a greater extent than older ones. Quality of life is now strongly correlated with access to digital

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technologies. Countries with a higher level of digitization have more potential. As a result, they can implement new social ideas faster and improve people’s quality of life. The potential in terms of the sharing economy, the circular economy and Big Data is very large. It allows for the creation of business solutions as well as solutions related to the so-­ called new concept of public management. The sharing economy is a plan for a future business idea that explains how to connect economic, environmental and social issues (Daunoriene et al. 2015, p. 837). The digital economy creates new opportunities to build entrepreneurial initiatives. New entrepreneurship gives an opportunity to create social values, where the company’s priority is social value rather than profit. Social business models are satisfactory, not only for their creators, but above all for their users and recipients. There are different approaches to defining social enterprises. Contemporary trends in creating social values are operationalized by means of business models. Features that distinguish classical entrepreneurial activities in the context of classical economics from modern entrepreneurial activities aimed at the use of social values in the network economy are important here. Such assumptions indicate how to create social value, how to capture social value and how to keep it in the company and among the company’s stakeholder group. It is essential to identify the key determinants that build entrepreneurial attitudes focused on designing social business models in the ecosystems of the digital economy. The value economy is a holistic view of creating value for different groups of stakeholders. It explores and deals with knowledge areas such as economics, philosophy, sociology, cultural anthropology, business ethics and corporate social responsibility. As J. Hausner observes, a dispute about value is constantly present at the center of the discussion on scientific cognition as well as on the dissimilarity of the nature of exact and social sciences. It is impossible to formulate a correct economic theory of value without recognizing that values have a social nature, and that it is existential and non-instrumental values which give meaning to our existence and being (Hausner 2017, p. 71). The value economy is an important tendency that should be taken into account in the process of designing modern business models. The value economy plays an important role in the process of shaping social business

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models in the digital economy. The criteria for classifying business and life values are important. It seems interesting to try to combine the business aspects of the classical economy with a new approach to values, namely sharing resources according to the concept of the sharing economy. The social nature of value is widely revealed in these solutions. As part of the identification of features describing the contemporary business environment, the attributes of building social bonds are critical as part of the network economy and network organizations. As regards social business models, the value economy should be considered in ontological, epistemological and methodological categories. As H. Mintzberg writes in reference to the plural sector, less formal incorporation includes social movements, whereby people mass together to protest some practice they find unacceptable; and social initiatives, usually started by small groups in communities, to bring about the necessary changes. The balancing of public, private and plural influences is of key importance for the development of the modern economy (Mintzberg 2015). In this context, social aspects are crucial for the development of a new approach to shaping business models. The aim of this chapter is to conduct a critical analysis of new economic concepts and trends related to issues such as the sharing economy, the circular economy and building Big Data that influence the configuration of business models, including social business models based on technological assumptions built into the formula of social approaches to the market economy.

1.2 S  ociety and Community in the Network or the Network Society The contemporary economy is significantly different from the one of a few years ago. In fact, we are currently on the edge of the real and virtual worlds, or in other words, the analogue and digital worlds. In this respect, the environment of companies operating therein changes. Being in the real world, we use technological solutions to create a parallel virtual world. Nowadays, highly effective business is created in these i­ ntertwining spaces. Society and its different age groups move differently in these

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worlds. However, the winner is the entity that can create synergy by creating business in these areas alternately. As an increasing number of companies transfer their businesses to the Internet, new types of communities have begun to be created there. A new path from the analogue society to the community in the network has emerged, which has resulted in a new phenomenon, namely the emergence of the network society. New business models appear in such an ecosystem, and this is already a step toward social business models functioning in the digital perspective. It is worth paying attention to the concept of the network society according to M. Castellas, in whose opinion the theory of the network society opens up new perspectives for viewing the world being reconstructed around a series of networks surrounding the globe thanks to advanced technologies. One can agree with the key thesis regarding the role of the society in business, which says that we are witnesses to the transformation consisting of the transition from hierarchy to communication networks (Castells 1996). In this sense, it is worth looking at the network society at the macroeconomic, mesoeconomic and microeconomic levels, as we will use different management mechanisms at each level.

1.3 T  he Social Perspective of Conducting Business Activity in the Modern Economy Due to the dynamic development of the relational nature of market participants entering into multilateral interactions, the social aspects of conducting business as well as public activity have created opportunities to build new forms of social business models. Technology has created opportunities for the development of this form of doing business. In addition to the classical forms of achieving the organization’s goals, in many cases, the broadly defined social value is generated directly or indirectly. Enterprises are usually classified by two criteria: ownership (public or private) and goals (for profit or not-for-profit). According to traditional two-dimensional typologies of enterprises based on ownership and goals, social enterprises are defined as private, not-for-profit enterprises (Fig. 1.2). Over the last three decades, the concept of a social enterprise has increased in many regions of the world. A social enterprise refers to

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(iii)

For-profit

Public Enterprises

Informal

Public

Hybrid companies – use a hybrid business model combining private and public activities

Public Private

Communities/ Households

(ii)

Not-for-profit

Formal

Social Enterprises

(i)

Private

Private Firms

DIGITAL ENVIRONMENT Fig. 1.2  Classification of enterprises. (Source: Own study based on Hyup Roh 2016)

organizations that conduct business activity, both to increase revenue and to further improve social missions (Fig. 1.2) (Hyup Roh 2016, p. 503). The classification of enterprises takes the criterion of the purpose of their existence and the orientation toward the expectations of the environment into account. The model presented in Fig. 1.2 has both advantages and disadvantages. Social enterprises that operate in the private sector create social aspects in the context of communities/households and private firms. They are thus useful for business and affect the quality of life of citizens by creating social value through responsible consumption and creating social value built into the idea of running a business. In the case of public enterprises, they are usually unambiguously focused on pursuing social effects; however, similarly to the private sector, they can act as a profit-oriented or non-profit-oriented enterprise. Social activity may also be formal or informal. Such a division is valuable; however, social activity is often produced in a hybrid system. This means that a social enterprise is very often a configuration of various options, on the basis of which it shapes its business model. It can combine many of them to attain the ability to create social value, then the legal formula and the attempt to classify a company into a group can be very difficult in prac-

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tice. The digital economy creates conditions for the development of social business models through its technological capabilities. It is a platform for the design of new, innovative solutions in this area. It should also be noted that the development of the digital economy and the emphasis on social aspects create new formulas for the operation of social companies, namely hybrid companies combining tasks in the sphere of their activities (in one business model) tasks focused on the private and public sector. A social enterprise is embedded between the needs of private firms and households. In order to develop the social aspects of conducting business activity, it is necessary to define the social drivers of business models. In the model presented in Fig. 1.2, the essence is the integration of the social value and economic value of the company as well as the creation of value. While an enterprise ensures the delivery of an offer that meets customers’ needs, it also creates social aspects. This may include the generation of direct values by a social enterprise as part of its value chain, intermediation services with which it ensures transactions related to social benefits, the indirect generation of social values through the company’s impact on the environment, or through social projects financed by economic profits earned. Moreover, social enterprises focus on making their offer affordable and actively shaping the value chain in accordance with their overall values and mission, thereby strengthening their partners and contributing to community development. Thus, innovative ways of integrating the social impact on the offer and the creation of company value are factors which drive social business models (Spieth et al. 2018, p. 11). The models presented clearly indicate that it is possible to generate economic values without detriment to the creation of social values, which in many cases reinforce the configuration and ensure the integrity of these business models. Social aspects are an indispensable element of creating a multidimensional and interdisciplinary construct of value creation. It should be noted that the positive and expected effect is the shared value resulting from the aspects of social and economic value. Naturally, the proportions may vary depending on the degree of saturation with social and economic factors. Referring to the above model critically, it is worth pointing out that in some cases companies may, in a sense, deceive their stakeholders by indicating that they create social value, which in

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Responsible Efficiency

Social Value

Impact Complementarities

Shared Values

● Reinforcing the effect of responsible efficiency and shared values (emphasis on how and who)

Economic Value

Integration Novelties

● Reinforcing the effect of impact complementarities and integration novelties (emphasis on what)

Fig. 1.3  Interdependence of the value drivers of social business models. (Source: Spieth et al. 2018, https://doi.org/10.1016/j.lrp.2018.04.004, p. 11)

reality will be very small compared to the company’s project orientation and profits. Then this symmetrically presented model will not take such a form, and will be only a facade of social activity. Symmetry as presented in Fig. 1.3 can take place only when the company consciously and responsibly implements the assumptions of the sustainability concept, which we refer to in the later part of the book.

1.4 T  he Theoretical Framework of the Social Aspects of Business Models in the Digital Economy Social business models go beyond traditional economics, indicating the intangible nature of value. Business models that create the effective factors of social value have a chance to win on the market. Social business

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models generate strategic value that in some cases turns into valuable objects or services, and sometimes creates social value at a higher level. These are values referring to human desires, dreams and expectations. Modern business models aim to create value for shareholders, but from a broader perspective, they serve the public. The effectiveness of these business models should be sought not only from the perspective of business, but also in terms of the social economy. The digital economy creates a new look at the processes of designing business models. It also pays attention to social benefits resulting from the existence of modern business models. So far, in the relevant literature, the problem of the impact of value economics on shaping business models has been presented to a negligible extent. Modern business models based on the concepts of the sharing economy, Big Data and the circular economy are based on technological solutions. Easy access to information about their use results from the widespread use of mobile telephones and the Internet. Business models in the digital economy lead to the fact that these models change the priorities of people’s choices and their attitudes toward goods, which is revealed by transforming the decision of wanting to have it to wanting to have access to it. In this respect, the socialization of business takes place, with an emphasis on improving the quality of life of business model users. These models serve this purpose. At the same time, the strategic transformation of market behavior is observed, from the assumptions of classical economics based on maximizing value for shareholders to the sharing economy. In this economy, it is not only economic profit which matters, but also social profit. The strategic intentions of the creators of modern business models play a key role. The economic factor is not always the main incentive to create them. It seems important to note that a social aspect is present in two areas: the positive intentions of ­business model creators and the generation of social values through the use of their functionalities. In this respect, the key is the conceptualization and operationalization of assumptions for the creation of social business models in terms of managerial intentions and the impact of these models on society and the quality of human life through the availability of resources. The issue of analyzing the place and role of social aspects in the design of business models is developmental, as evidenced by the emerging number of scholarly articles on business models which use social aspects (Mauri et  al. 2018; Hyup Roh 2016; Daunoriene et  al.

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2015). The area of this knowledge is developmental and multidimensional. The first attempts at the conceptualization and operationalization of social aspects in business models were developed, for example, as part of the definition of the archetypes of sustainable business models (Bocken et al. 2014; Calvo and Villarreal 2018, p. 27; Yip and Bocken 2018, p. 150). The issue of the impact of digital business models on social benefits achieved, not only in the context of business efficiency but also the social economy, is also poorly recognized. It is necessary to explain the knowledge gap in the field of a social approach to the design and application of innovative business models in the digital economy. The interpretation and observation of social phenomena that have an impact on the creation of modern business models will be important in this respect. It is also important to be aware of the new interpretation in this area, and thus changes in the current understanding of economics. As B. Brożek argues, in the process of interpretation, every piece of our knowledge can change, at least potentially. Obviously, this does not mean that these changes can be made arbitrarily, nor should it be easy to change the existing theories, such as rejecting alternative interpretive paraphrases. Some of the elements of background knowledge, especially the “central” ones, meaning the basic concepts or the most general theories, are relatively stable: we can modify them, but this is usually a long process. It is not possible to change the foundations of the conceptual grid in one go, as it would result in the structural instability of the language and, consequently, the inability to understand each other. Similarly, it is impossible to replace all theories explaining the world with alternative concepts in an instant, because this way the tower of Babel would be built. Our ­conceptualizations of reality, entangled in the theories proclaimed, change through evolution rather than revolution (Brożek 2014, p. 280). Such a new interpretation is in the area of changes caused by technological progress. The sharing economy model can give social enterprises the opportunity to overcome their market problems, because social value can be fully embedded in their sharing process as part of the economic cycle. The use of innovative and proactive platforms within the concept of the Information and Communication Technologies (ICT) -based sharing economy can be a new idea for shaping social ­entrepreneurship. Also, the activities of social enterprises that are able to create both social and economic value are considered to be so-called

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“double bottom-line” organizations, and they prove the development of new opportunities for shaping social values. These arrangements have practical and strategic implications for the development and transfer of social values. The sharing economy is a new economic model that goes beyond the paradigm of mass production and consumption. This means that sharing things instead of possessing them is becoming increasingly popular, creating a new paradigm of capitalism (Hyup Roh 2016).

1.5 T  he Potential of the Digital Economy to Develop Socially Oriented Activities The operationalization of the digital economy in the area of building social ties has a specific character. As a rule, it is based on technological solutions implemented in practice. In general, this approach is included in the Social Identity Theory (SIT). This is a very broad field that covers a large list of topics: interactive and network data processing, mobile social services and social networks, social software and social media, marketing and advertising, various aspects and uses of blogs and podcasts, corporate value and internet collaboration, e-administration and online democracy, virtual volunteering, various aspects and uses of the community, tagging and social semantic tag cloud, blog-based knowledge management systems, online learning systems, ePortfolio, blogs and wikis in education and journalism, legal issues and social interaction ­technologies, data monitoring and online fraud, neogeography, the utility of social software, social software in libraries and non-profit organizations, and broadband visual communication technology to enhance social interaction [Redondo]. There are several tools associated with social software: 1. Tools enable participation in creating, publishing and disseminating content such as videos, photos, music and texts via the Internet. 2. Social software allows people with similar interests to find each other and connect via social networking sites such as Facebook. 3. People can coordinate their activities and cooperate by acquiring petitions and funds as well as planning and conducting mobile campaigns and social programs.

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4. People can develop reliable and complex products, such as open source software, for example, Linux (the largest example of community development). There are three features commonly attributed to social software: • interaction in conversations between people or groups, • social opinions that enable the group to assess the contribution of other people, • social networks to explicitly create and manage the digital expression of personal interpersonal relationships. Social software aims to: • • • • •

ensure communication between groups, enable communication between many people, ensure the collection and sharing of resources, provide collective gathering and indexing of information, provide new tools for aggregating knowledge and creating new knowledge, • delivering data to different platforms depending on the creator, recipient and context (Redondo). Social media enables the effective conceptualization and operationalization of business models (Jabłoński 2017). Such a wide range of services offered creates a set of multiple activities that develop the social potential of the modern market economy, increasing the chances of creating social values, which is reflected in specific formulas of business models.

1.6 B  usiness Models—Strategic Assumptions in the Social Economy The concept of business models in management sciences results in much controversy and different viewpoints. There are a number of definitions of business models that are characterized by different parameters and

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interpretations. Currently, the essence of understanding a business model is widely discussed, both in terms of reference to a given paradigm and its place in the criterion of the environment and cause-and-effect relationships and correlations between other ontological entities. In such a community, a business model leads the way, determining new decision-making centers and creating new impulses in shaping, appropriating and capturing value. A business model, as a benchmark and a reference point that ensures the materialization of strategic ideas through the constructive comparison of various factors, becomes a platform of strategic accessories that often have a resource dimension. Potentially, new technology may not be an obvious business model, so in such situations, technology teams need to expand their perspective to find a suitable business model in order to be able to capture the full value of this technology (Chesbrough 2010). A business model and business model innovation are not directly observable. We observe the specific arrays of activities devoted to the creation, delivery and appropriation of value, and we have decided to call these arrays “business models” and model innovations, respectively. “Thus, the business model and business model innovation are, of course, conceptual abstractions, theoretical constructs” (Foss and Saebi 2018). There are many interpretations of the concept of a business model. A business model can be used, among others, to generate revenues and/or to create the value of an organization. According to R. Amit and C. Zott, a business model is a specific method by which an organization can generate revenues (Amit and Zott 2000). D. Teece defines a business model as a system of how a firm delivers value to customers and converts payment into profits (Teece 2010, pp. 172–194). P. Timmers regards a business model as an architecture for the flows of products, services and information including the description of various activities and different roles of individual network participants (Timmers 1998, pp.  3–8). J. Magretta points out that a business model is the stories that explain how companies operate (Magretta 2003, p. 470). An interesting interpretation of the business model is presented by A.  Osterwalder and Y. Pigneur, who point out that a business model describes how the organization creates value and ensures and derives profits from the value created (Osterwalder and Pigneur 2012, p. 18). Baden-Fuller, MacMillan,

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Demil and Lecocq define a business model as “the logic of the firm, the way it operates and how it creates value for its stakeholders” (MacMillan et  al. 2010, pp.  143–462). Ch. Nielsen and N.  Bukh define a general business model as a meta model or ontology for the business model, paying attention to the operating system and the ability to generate value (Nielsen and Bukh 2008). Generally speaking, the concept refers to the description of the articulation between different business models (BM) components or “building blocks” to produce a proposition that can generate value for consumers and thus for the organization (Demil and Lecocq 2010, pp. 227–246). The business model says “how the company communicates, creates, delivers, and captures value out of a value proposition” (Abdelkafi 2012, pp.  279–316). There are many definitions of business models, but it is crucial to use such a definition that will ensure a high level of organizational effectiveness through the monetization of the business model, taking into account the relevant sales structure. When analyzing the basic definitions of business models presented, the multidimensional character of the concept of a business model is clearly outlined. It is noteworthy, however, that business models not only function in constant interaction with the market environment. Therefore, it can be stated that they also emerge from the principles of the economy defined by particular states. If the economy is strongly regulated by the state, business models based on factors which regulate particular sectors appear. If there is a social market economy, then the mechanisms of social business models are revealed. If the economy is highly centralized, for example, factors emerge which limit the creation of bottom-up entrepreneurial business models based on private ownership. Finally, if the model of the economy is strongly liberalized, there are often elements that reveal the tough, greedy capitalism that has been partially compromised by world crises, and with it strongly predatory business models. Therefore, it is important to search for a strategic balance in these principles that guarantees the achievement of goals by various interest groups without harming others, thus creating a kind of symbiosis. The creation and operationalization of new, entrepreneurial business models built on the new dimension of the present global economy thus remains an interesting challenge—and not only for managers.

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1.7 T  he Identification of Selected Social Aspects of Business Models in the Digital Economy The principles on the basis of which social business models can be built have not been clearly elaborated. Based on a theoretical approach and the application of practical implications, it is possible to identify assumptions regarding the design of social business models. It is important to search for solutions in the area of concept building and the operationalization of social business models in the digital economy. Different approaches to the concepts of business models can be used to identify and select such components of business models that have an impact on the development of social issues, and at the same time can ensure better business model consistency. Solutions such as the business model canvas by A. Osterwalder and Y. Pigneur can be very useful. In particular, the development of original approaches dedicated to the operationalization of social business models of the digital economy also seems justified. There are many good global practices in the field of social business models. It should be noted that, in different geographic areas of the world, the understanding of social aspects varies. As a result, the features of social business models will vary as well. However, it is worth looking for good practices in the field of designing social business models and their assessment from the point of view of a broad range of selected criteria. The sharing economy goes hand-in-hand with the process of strengthening attitudes of active action for the implementation of income aspirations and the ability to share ownership with others for the sake of the greater good. This will have to be transferred to shaping a new dimension of social relationships (Poniatowska-Jaksh and Sobiecki 2016, p. 18). As part of the identification of such aspects of digital economy business models that are of a social nature, the following dimensions can be defined: 1. The leading role of communities in the co-creation of value 2. Active and conscious participation of people in creating value 3. A bidirectional or multi-directional communication system between business model participants

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4. Building communities involved in a given topic, often with visible passion 5. Designing business models with a focus on social values 6. Changing priorities, redefining the purpose of the company’s existence from generating profit to building a community 7. Co-creating business models with communities 8. Changes in the configuration of business models as a result of consultations with communities 9. Breaking the current order of things and creating social innovations 10. Repeatedly overtaking the existing legal order, which is not keeping up with dynamic changes 11. Improving the quality of life of, and participation in society by, people who were previously excluded 12. Building people’s digital identity

1.8 S  ustainable Business Models and Hybridization and the Development of Social Issues When conducting a thorough scientific discussion in the context of the social challenges of a digital economy, it should be noted that parallel concepts develop in management sciences, which at some point combine with each other in spite of their different places of origin and the logic of their creation. Moreover, there are multidimensional constructs of interrelated management concepts due to the holistic and hybrid nature of today’s economy based on a systemic and network approach. This applies, among others, to the concept of sustainable business models. Sustainable business models as a concept develop dynamically not only in the sense of balancing ecological, ethical and economic aspects. They also aim to sustain business in the long term. This is the basis for building cooperation between various stakeholder groups in a network environment and creating conditions for the effective reception of social business. The issue of sustainable business models has not been widely studied in terms of the digital economy. It is important to identify key issues

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related to shaping business models in the digital economy and their impact on social development. The modern approach significantly goes beyond the classic approach based on the principles of the “Triple Bottom Line” (Elkington 1999). Their social character is clearly visible in the configurations of contemporary business models. The connection of economic and social aspects creates a hybrid. The concept of hybridization has been analyzed in recent years in a broad context. An example of a hybrid business model is business models based on the combined implementation of the concepts of Big Data and the sharing economy. Linking both concepts at the level of business models provides an opportunity to create pioneering solutions which, in technological and business terms, can create opportunities for turning the current approach based on the classical value chain into the sphere of the network economy (Jabłoński 2018a, b). Hybridization is very often related to the combination of management practices in the field of business management and public management. Public management is subject to dynamic changes aimed at improving the efficiency of public funds management and shaping social values. Hybridization can be an effective method of shaping social business models. In particular, it can be used in the aspect of the digital economy. A multidimensional approach to the use of the concept of hybridization can be useful in building social business models. The concept of hybridization can be used to develop critical social features of business models by combining solutions used in public administration in terms of analyzing Big Data sets with a commercial approach. Data operationalization will result in social effects from access to Big Data. Taking into account technological, social and organizational aspects can build assumptions for sustainable business model archetypes. In terms of technological aspects, the following archetypes have been defined: maximize material and energy efficiency, create value from waste and substitute with renewables and natural processes. As part of the social aspect, the following archetypes were grouped: deliver functionality rather than ownership, adopt a stewardship role and encourage sufficiency. Considering the organizational aspect, the following aspects may be balanced: re-purpose for society/environment, develop scale-up solutions (Fig. 1.4).

Archetypes Groupings

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Technological

Maximize material and energy efficiency

Create value from waste

Social Substitute with renewables and natural processes

Organizational

Deliver Adopt a Repurpose functionality Encourage stewardship for society/ rather than sufficiency role environment ownership

Develop scale up solutions

Fig. 1.4  The general concept of sustainable business model archetypes. (Source: Bocken et al. 2014) Value proposition Products or services that use fewer resources, generate less waste and emissions and create less pollution than products/ services that deliver similar functionality.

Value creation & delivery Activities and partnerships aimed at using fewer resources and generating little waste, emissions and pollution. The focus is on product and manufacturing process innovation, but may extend to wider changes. New partnerships and value network reconfigurations to improve efficiencies and reduce supply chain emissions (e.g. transport).

Value capture Costs are reduced through the optimized use of materials and reducing waste, and compliance leading to increased profits and competitive pricing advantage. Positive contribution to society and environment through a minimized environmental footprint.

Fig. 1.5  The sustainable business model archetypes. (Source: Own study based on Bocken et al. 2014)

With regard to the identified areas of sustainable business model archetypes, the lack of one of the important aspects, namely the human factor, is observed. It seems reasonable to introduce this factor into the model in question. The human attitude in the context of exploiting the business model is a strategic factor in creating a balanced strategy. Therefore, it would be justified to emphasize aspects such as the strategic management intentions of top management and their implementation by means of management concepts such as management by objectives, the creation of turquoise organizations, and management by responsibility. This is missing in the above classification. The identification of archetypes of sustainable business models shapes the approach to value-based management relevant to this concept, including the value proposition, value creation and delivery and value capture (Fig. 1.5).

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Sustainable business model archetypes can be shaped by innovative solutions by means of technological, social and organizational aspects. The technical grouping includes activities that use technology to maximize materials and energy efficiency to create value from waste and replace traditional processes with renewable energy sources and natural processes (Calvo and Villarreal 2018). Sustainable innovations in the business model are increasingly seen as a lever for changing systems for sustainable development in various companies and industries (Yip and Bocken 2018). A sustainable enterprise can be socially integrated by actively supporting the creation of a bi-directional link between the networks of interested parties that take place in the digital economy, building interactions between the social structure of entrepreneurial ecosystems and the emergence of sustainable business models (Neumeyer and Santos 2018). In this case, sustainability is a way to succeed and ensure the effectiveness and efficiency of the business model. It also influences the behavior of investors in relation to business models based on the principles of sustainability and, most importantly, factors responsible for the migration of value (Neumeyer and Santos 2018). In addition, it is a condition for achieving success through its use with built-in functionalities.

1.9 Conclusion In the context of the research problem, an attempt was made to explain the place and the role of social aspects in designing contemporary digital economy business models. The work, which has an evaluative and interpretative character, proved that social aspects are an indispensable condition for the achievement of success by companies in the digital economy. They are an important component of these business models and are a prerequisite for maintaining consistency. The managerial intentions of their creators very often expose social aspects as those that determine the existence of a given business model, while the monetization of the business model is postponed until such a time when social aspects will prove the correctness of the initial design assumptions adopted. Thus, a social aspect is very often embedded permanently in the DNA of the business

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model and is a condition for achieving the assumptions adopted, even when the economic results are distant time-wise due to the development of these social factors. Social aspects are a condition for achieving the efficiency and effectiveness of digital business models. The following final conclusions can be defined: 1. Social aspects are a crucial component of digital business models responsible for building a business ecosystem based on community activities. 2. Sustainable business models operating within the framework of the concept of the sharing economy, the circular economy and Big Data management strongly emphasize social issues based mainly on their potential. 3. The change in perceiving the classical economy in terms of wikinomics changes priorities from the contractual approach to relational models. 4. Business and public activities overlap in many areas, and social issues are what binds them. 5. Technology and access to it increases the quality of life and the chances of eliminating social exclusion. 6. The increased digitization of the economy and society favors the adaptability of new, innovative business models. 7. The condition for using the potential of innovative business models and their positive impact on social issues shape legal regulations that are relevant to technical progress.

References Abdelkafi, N. (2012). Open Business Models for the Greater Good—A Case Study from the Higher Education Context. Die Unternehmung, 60(3), 299–317. Amit, R., & Zott, C. (2000). Value Drivers of E-commerce Business Models. Working Paper No. 2000–2006, INSEAD, Fontainebleau. Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A Literature and Practice Review to Develop Sustainable Business Model Archetypes. Journal of Cleaner Production, 65, 42–56.

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Brożek, B. (2014). Granice Interpretacji. Kraków: Copernicus Center Press Sp. z o.o.. Calvo, N., & Villarreal, O. (2018). Analysis of the Growth of the E-learning Industry Through Sustainable Business Model Archetypes: A Case Study. Journal of Cleaner Production, 191, 26–39. Castells, M. (1996). The Rise of the Network Society, The Information Age: Economy, Society and Culture Vol. I. Cambridge, MA and Oxford, UK: Blackwell. ISBN 978-0-631-22140-1. Chesbrough, H. (2010). Business Model Innovation: Opportunities and Barriers. Long Range Planning, 43(2–3), 354–363. Daunoriene, A., Draksaite, A., Snieska, V., & Valodkiene, G. (2015). Evaluating Sustainability of Sharing Economy Business Models, 20th International Scientific Conference Economics and Management—2015 (ICEM-2015). Procedia—Social and Behavioral Sciences, 213, 836–841. Demil, B., & Lecocq, X. (2010). Business Model Evolution: In Search of Dynamic Consistency. Long Range Planning, 43(2–3), 227–246. Elkington, J. (1999). Cannibals with Forks: The Triple Bottom Line of 21st Century Business. Oxford, UK: Capstone. Foss, N. J., & Saebi, T. (2018). Business Models and Business Model Innovation: Between Wicked and Paradigmatic Problems. Long Range Planning, 51(1), 9–21. Hausner, J. (2017). Ekonomia wartości a wartość ekonomiczna. In Open Eyes Book 2. Kraków: Fundacja Gospodarki i Administracji Publicznej. Hyup, R. T. (2016). The Sharing Economy: Business Cases of Social Enterprises Using Collaborative Networks, Information Technology and Quantitative Management (ITQM 2016). Procedia Computer Science, 91, 502–511. Jabłoński, A. (2017). Business Models Based on Social Media: A Multidimensional Approach. In M.  Jabłoński (Ed.), Strategic Performance Management New Concepts and Contemporary Trends. New York: Nova Publishers Inc. Jabłoński, M. (2018a). The Assumptions of Hybrid Business Models Based on the Concepts of Big Data and the Sharing Economy. In A. Jabłoński (Ed.), Hybridization in Network Management. New York: Nova Publishers. Jabłoński, M. (2018b). Value Migration to the Sustainable Business Models of Digital Economy Companies on the Capital Market. Sustainability, 10(9), 3113. MacMillan, I. M., Demil, B., & Lecocq, X. (2010). Long Range Planning Call for Papers for the Special Issue on “Business Models” by Charles Baden-Fuller, Ian 43(2–3), (April–June). Magretta, J. (2003). What Management Is. How it Works and Why It Is Everyone’s Business. London: Profile Books.

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Mauri, A. G., Minazzi, R., Nieto-García, M., & Viglia, G. (2018). Humanize Your Business. The Role of Personal Reputation in the Sharing Economy. International Journal of Hospitality Management, 73, 36–43. Mintzberg, H. (2015). Rebalancing Society, Radical Renewal Beyond Left, Right, and Center. Oakland: Berrett–Koehler Publishers, Inc. Neumeyer, X., & Santos, S. C. (2018). Sustainable Business Models, Venture Typologies, and Entrepreneurial Ecosystems: A Social Network Perspective. Journal of Cleaner Production, 172, 4565–4579. Nielsen, C., & Bukh, N. (2008). What Constitutes a Business Model: The Perception of Financial Analysts. Working Paper, Series Department of Business Studies No. 4, Aalborg University, Denmark. Osterwalder, A., & Pigneur, Y. (2012). Tworzenie modeli biznesowych. Podręcznik wizjonera. Gliwice: Helion. Poniatowska-Jaksh, M., & Sobiecki, R. (2016). Sharing Economy (Gospodarka Współdzielenia), Oficyna wydawnicza SGH. Warszawa: Szkoła Główna Handlowa w Warszawie. Spieth, P., Schneider, S., Clauß, T., & Eichenberg, D. (2018). Value Drivers of Social Businesses: A Business Model Perspective. Long Range Planning. https://doi.org/10.1016/j.lrp.2018.04.004. Teece, D. J. (2010). Business Models, Business Strategy and Innovation. Long Range Planning, 43(2–3), 172–194. Timmers, P. (1998). Business Models for Electronic Markets. Electronic Markets, 8(2), 3–8. Yip, A. W. H., & Bocken, N. M. P. (2018). Sustainable Business Model Archetypes for the Banking Industry. Journal of Cleaner Production, 174, 150–169.

2 The Impact of the Digital Technology Revolution on Creating New Markets and People’s Behavior

2.1 Introduction Modern technological solutions create the conditions for shaping social attitudes and undermining the existing principles of classical economics. Markets that are parallel to existing ones are created and are increasingly ontological in nature. The virtual world creates new markets, sets new rules for cooperation between people and creates new communication formulas. The old action model based on a contractual approach is turned into a relational approach. The technological revolution generates solutions in the social sphere, setting new rules for creating markets and people’s behavior. This chapter describes the impact of the digital technology revolution on creating new markets and the behavior of people.

2.2 T  he Determinants of the Development of the Digital Economy The digital economy creates new conditions for creating entrepreneurial solutions. Technology determines the emergence of innovative business models, the existence of which would not be possible without the poten© The Author(s) 2020 A. Jabłoński, M. Jabłoński, Social Business Models in the Digital Economy, https://doi.org/10.1007/978-3-030-29732-9_2

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tial built into these technologies. The unlimited ingenuity of contemporary entrepreneurs is currently focused on the search for innovative solutions in the sphere of utilizing the possibilities offered by digital technology. Previous solutions which use the traditional channels of economic activity are being replaced with proposals derived from Internet-based resources and information and communication technologies. This provides an opportunity to design business initiatives, the impact of which allows them to have a global impact, in many cases within a short period of time. In this way, a technoentrepreneurship trend appears, stimulating the emergence of innovative business models (Jabłoński 2017a, b). A new approach should be based on well-thought-­ out solutions that take different points of view into account. S. Jørgensen and L. J. Tynes Pedersen have presented the framework for sustainable business model innovation: • the sustainability problem, • digitalization and the technological opportunity space and • changing consumer preferences and lifestyles. This approach exposes the sustainability and technological aspects and the behavior of people in the context of global changes (Jørgensen and Pedersen 2018). The changing economy creates opportunities for new, innovative business solutions. The economics of the digital economy are the factors that stimulate the emergence of business models in the digital economy. These include ideas such as the sharing economy, the remix economy, the access economy, the creative economy, the reputation economy, the gift economy, the experience economy, wikinomics and the trust economy. In the background of these “economics”, four processes are taking place, launched by the expansion of the digital economy, namely disintermediation, prosumption, the cult of the amateur and enhancing emotional intelligence (in contrast to the rationality of the industrial era) as well as the appearance of the phenomenon of the so-called gig economy, roughly meaning the economy of electronic freelancing (Jung 2017, pp. 128–129). All these concepts have a key impact on the thorough changes, not only in business, but in particular in society in terms of a

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new approach to understanding business and work processes. Building communities based on communication platforms also allows for their commercialization and capitalization while creating opportunities to achieve environmental, economic and social effects. It should be noted that the development of new paradigms in the science of management and economics is the result of a transformation in the global economy, where the centers of ideas and perspectives arise in various places, often thanks to global access to information and knowledge through technological platforms based on the philosophy of the Internet (Jabłoński 2017a, p. 17). It is different in the case of digital economy solutions, where the effect refers not only to a single enterprise but entire communities generating an economic profit at the same time, but also—crucially—social profit. The latter ensures the wide social acceptance of the business models designed, which provides impetus to the implementation of new ideas and breaking the long-term market rules. Building and segmenting the community through the implementation of the audience-building strategy offers a greater chance of reaching an almost unlimited number of users, a number of whom can significantly contribute to the monetization of business models through the use of innovative forms of charging. An economic approach does not interfere with building the social effect/social profit. An economic goal intended to have a long-term perspective is conducive to community building, which should contribute to the effective monetization of business models and their socialization. The social effect can be maximized by increasing the impact of a large volume of users gathered around the leading idea of a business model. In this respect, the greater the number of users focused on using the value created by the digital business model, the greater the chance of monetizing this business model and increasing opportunities to create a social effect. The array of potential changes in the behavior of consumers of the proposed digital solutions, operationalized by means of business models, can include: • Transferring the real world to a virtual one by replacing personal contacts with contact via social media.

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• Shifting emphasis from the desire to own property to the availability of resources. There is a lack of a strong need for ownership because there is a high level of availability of specific resources for temporary and dedicated use. The value of tangible goods is depreciated by providing functionality through temporary access to these resources. • Active participation of people in the implementation of resource-­ sharing processes through the use of technology to report demand for a resource and to offer the resource (multilateral flow of information and benefits). • The universal digitization of documents and records that refer to all events in one’s everyday and professional life. • Concluding commercial transactions via the Internet as well as the process of communication with customers/users. • The problem of universal surveillance of citizens through all types of media and video devices in public places. The implementation of digital technologies is not only a phenomenon specific to companies, because the change also affects what is happening outside the organization’s borders, and transformation into a business ecosystem takes place. The nature and potential impact of digital technologies on business models depend on the position of the company’s supply chain and the type of organization which implements digital technologies (i.e. an existing or new market participant) (Vendrell-Herrero et al. 2018, p. 88). Digital business ecosystems are a new approach to the use of economic and technological innovations, and a specific type of infrastructure and software enables communication between a large number of cooperating business users, services or other entities, as well as shaping a new form of mutual interaction (Lenkenhoff et  al. 2018, p. 168). Technological advances have enabled the emergence of new business models based on digital technology. Companies such as Airbnb and Uber offer such digital platforms that connect previously unassociated groups of participants on the demand and supply sides through innovative forms of creating, delivering and capturing value (Täuscher and Laudien 2018, p. 319). Table 2.1 presents the 10 most “subversive” business models.

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Table 2.1  The 10 most “subversive” business models Business model

Enterprise example

Description of the business model

A user pays a fixed fee for access to the Netflix, HelloFresh, product/service offered. Dollar Shave Club, Kindle, One A product or service (mostly software, a Freemium Spotify, Dropbox, computer game or an internet service) model LinkedIn, Skype, The is available for free, while the use of New York Times, advanced functions or obtaining some Farmville virtual goods requires the purchase of a premium version. Free model Google, Facebook, An end user has free access to the Snapchat product/service, while the operator acting as a service provider profits by advertising and selling information about the preferences of consumers who are users of the free service. The company provides a platform for Market place eBay, Alibaba, transactions concluded by third Friendsurance, parties. priceline.com, Upwork Access over Zipcar, ParkCirca, Users can use the services without ownership Peerby, Car2Share purchasing a product that is used when using the service. Hyper Amazon, Zalando, Enterprises dealing with e-commerce market Coolblue offer a very wide range of goods and services, often providing products or services on an exclusivity basis. Companies take advantage of the Experience Apple, Tesla, Disney tendency of users to pay more based World, on previous experiences of using Tomorrowland products or contacting the company. The pyramid Amazon, other Companies generate a large part of e-stores their revenues via cooperating entities and sellers of other goods. On demand Uber, Operator, Companies offer products/services Tsk-Rabbit available to users “immediately” when demand arises. Ecosystem Apple, Google Companies create a closed ecosystem of products and services that forces users to buy more products from the same company in the future. Subscription model

Source: Gajewski and Paprocki (2016, p. 19)

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The above formulas of business model operation significantly affect the transformation of not only the behaviors of direct consumers/users of the application, but also of the entire environment of people living in the new realities of the modern world. People’s behavior is a response to the proposed solutions implemented through the business models of enterprises based on creating innovative solutions in the sphere of business and social ecosystems. However, while making a critical assessment of the solutions presented in Table 2.1, it should be noted that this division was developed in terms of monetization techniques rather than a focus on social attitudes. Effective methods of monetization in the design of the business model will not always create positive social effects. The digital economy creates attractive monetization systems, but not all of them can positively influence social aspects. Negative issues include problems such as customers’ technological dependence on solutions proposed, the social exclusion of customers who do not have access to mobile devices, as well as imposing specific types of behavior on customers. It may affect the personal freedom of citizens. Business models developed in the digital economy environment reflect the needs of people partly functioning in virtual reality. Then the digital economy creates conditions for defining the new assumptions of this economy and identifying new functionalities determined by new technologies. Table 2.2 presents selected business models that represent the trends and challenges of the modern digital economy. The criteria presented for the categorization of business models according to W. Wirtz allow for the identification of distinguishing features such as content, commerce, context, connection and hybrid. They are embedded in the realities of the digital economy. W. Wirtz indicated here the classification of business models in terms of technological aspects. A social aspect, which plays a key role in the context of the network nature of the modern global economy, is clearly missing in this classification. He included it partly in the connection area, but this criterion is not complete in this respect. The categorization of business models should also include community building and creating social effects.

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Table 2.2  Selected business models of the digital economy Segment

Example

Content

e-Information: -Wikipedia   – e-Politics (state.gov)   – e-Society (thesun.co.uk)   – e-Economics (wsj.com) e-Entertainment:   – e-Games (partypoker.com)   – e-Movies (Gutenberg.us, movies.go.com)   – e-Prints (worldlibrary.net)   – e-Music (apple.com/Tunes) e-Education:  –  Virtual University (vu.org)  –  Public Education (onlinelearning.com, salto-youth.net) e-Infotainment:  –  nba.com  –  sportsline.com e-Attraction:  –  online advertising (gogle.com/adsense)  –  market place (shopping.com) e-Bargaining:   – auction (ebay.com, marmaladeskies.com)   – price-seeking (pricegrabber.com) e-Transaction/e-Negotiation:   – payment (paypal.com, paybox.net)   – delivery (fedex.com, ups.com) e-Tailing: (combines the three categories above)  –  amazon.com Search Engines:  –  General Search (google.com, bing.com)  –  Special Search (Technorati.com)  –  Meta Search (Dogpile.com)  –  Desktop Search (Google Desktop, Yahoo! Desktop) Web Directories:  –  Yellow.com  –  Yahoo.com  –  Sharelook.com Bookmarking Services:   – Del.icio.us  –  Dimoz.org  –  Citeulike.org

Commerce

Context

(continued)

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Table 2.2 (continued) Segment

Example

Connection Intra-Connection (Community):  – social networks (facebook.com, plus.google.com, snapchat. com)  –  user messages (skype.com, icq.com, twitter.com)  –  file exchanges (rapidschare.com, flickr.com)  –  customer opinion portal (yelp.com, epinions.com)  –  mailing services (gmail.com) Inter-Connection:  –  fix connection (earthlink.net, sonic.net)   – m-connection (att.com, t-mobile.com) Hybrid Google Source: Own study based on Wirtz (2019)

2.3 D  escription of the Key Concepts of the Digital Economy The concept of the digital economy, currently strongly used in business, has a huge influence on the market. This is related to technological innovation, which is widely applicable and creates new development and growth foundations, not only at the level of the enterprises themselves, but above all the entire economy. In this approach, the new areas of the concept of the digital economy appear, determining new dynamic strategic challenges for enterprises as well as the emergence of related business models. Table 2.3 Presents the description of the selected concepts of the digital economy The concepts of the digital economy presented in Table 2.3 are embedded in features, challenges and requirements related to Industry 4.0, which is currently a key factor in the technological development of modern enterprises, as presented in Table 2.4. This new business logic in the digital economy also creates the key features of the market business model. They are related to the features of business models and their key specifications in the context of value creation, value delivery and value capture. The features of the Industry 4.0

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Table 2.3  Description of the selected concepts of the digital economy No. Concept 1.

2.

3.

4.

5.

Description of the concepts of the digital economy

Internet of Things (IoT)

By focusing on the Internet of Things, it can be concluded that it is a network of systems, equipment and devices capable of acquiring and processing information that can be made available via the Internet communication protocol (Guinard et al. 2011). Cloud The concept of cloud computing includes, among others, technology the Software as a Service (SaaS) concept; there is no need to purchase a software license, which is a payment for the value of the resources and time used. Cloud services include the Platform as a Service (PaaS): for example, the application framework and infrastructure as a service (IaaS) provides technical infrastructure components such as mass storage, processor, memory and the network (Chard et al. 2010). This technology allows for the capture and interpretation Big Data of data to enable companies to access detailed Mobile information about their business so that they can make technologies strategic decisions, including an interview about solutions based on the analysis of Big Data with the following features: data volume to be analyzed and a variety of data that results in different information for the same operations. Artificial The application of artificial intelligence to business as intelligence Business Intelligence processes through the processing of dynamically calculated indicators (Sousa and Rocha 2019). Robotics It integrates systems automation technologies and has high-performance sensors. The new generation of robots cooperates with people and performs many tasks flexibly in unpredictable environments (Brynjolfsson and Andrew McAfee 2014).

Source: Own study

concept presented above, which were not indicated in the table, should additionally take into account the processes of servitization resulting from the assumptions of PSS—product-service systems on the basis of which modern business models are built. Servitization is the main factor in creating social business models. Technology should serve the implementation of socialized services. Table  2.5 contains key features of the market business model.

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Table 2.4  Features, challenges and requirements related to Industry 4.0 Main features of Industry 4.0

Main problems affecting the Main requirements for traditional business model digital transformation

Interoperability Virtualization Decentralization of decision making Real-time possibilities Service orientation Modularity

Network creation and reduction of barriers Flexibility and personalization Customized mass production Local production Low price Intelligent goods and services Breakdown of the value chain Globalization and decentralization of production Integrated V-H production systems

Standardization Organization of work Availability of products New business models Protection of know-how Availability of qualified employees Research investments Professional development Legal framework

Source: Ibarra et al. (2018)

When conducting a critical analysis of the table presented, it should be noted that social impact has not been included herein, which makes it seem incomplete. The issues of focus on environmental and social aspects from a market perspective should be included in the context of value creation, value delivery and value capture and refer to issues such as environmental and social attractiveness. In the context of the construction of multilateral platforms, community building and its ontological value should be emphasized.

2.4 T  he Features of Social Business Models in the Cognitive Perspective of the Digital Ecosystem It is important to define the attributes (features) of social business models during multidimensional reflections on the social relations of business models against a background of the concept of the digital economy. There are a lot of uncertainties in this area, especially as regards observation and

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Table 2.5  Key features of the market business model

Value delivery dimension

Value creation dimension

Business model features Platform type Core activity

Internet platform Data transmission services

Mobile application Community building

Setting prices by sellers

Setting prices by buyers

Content creation

Setting prices

Setting prices

Evaluation system

User opinions

Market opinions

None

Value proposition

Price / Cost / Efficiency

Emotional value

Social value

Auction

Negotiations

Transaction content

Product

Service

Transaction type

Digital

Offline

Sector range

Vertical

Horizontal

Market participants Geographical range

Value capture dimension

Specification

Revenue stream

C2C

B2C

B2B

Global

Regional

Local

Commissions

Advance payments

Advertising

Price policy

Fixed pricing

Price discrimination

Based on features

Based on location

Based on quantity

None / Other

Seller

Buyer

Third party

None / Other

Source of revenue

Market valuation

Sales of services

Diversified pricing

Source: Täuscher and Laudien (2018, p. 321)

research in the new digital ecosystem. So what should be the social features of a digital business model? How to use these features to monetize it? In order to answer these questions, it is necessary to discuss what features of business models are currently crucial for them.

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An analysis of the table shows that the features listed strongly determine the trajectory of understanding the business model in this context. The business model should be characterized by appropriate dynamics, often caused by a network effect that strongly activates various types of communities. It should also be adaptable and at the same time repetitive, because only then can it be monetized on fixed sequences. The consistency of the business model ensures its effective use based on synergy between its components. The scale of impact and accessibility, mainly via the Internet, guarantees geometric growth and migration capability. Consequently, this affects its innovativeness through its full economization, ensuring its profitability. The lack of social features is clearly visible in the presented arrangement of the features described in Table 2.6. A business model embedded in a business environment must interact with the needs of local stakeholders, which should affect the scalability of business models in terms of the social acceptance of the solutions proposed. This feature can be called socialization or business model socialization. It should consist of the creation and delivery of value based on the assumptions of the triple bottom line, circular economy and sharing economy concepts by applying the assumptions of resource sufficiency—their rational and optimal use. According to the authors of the monograph, there are two key attributes of social business models that combine the above-mentioned features, namely their resilience and robustness. In the first place, it is worth paying attention to the concept of the resilience of the business model, which is built into their DNA (Jabłoński 2019). The architecture of added value and financial logic is essential for implementing social business models and sustainable strategies in companies and focusing on the main aspects of the value offered. In this way, it suits the concept of resilience and the business model, where it is important in the first place to determine which (social) tool of business activity creates them. Subsequently, the method of creating a value proposition for stakeholders must be analyzed—this can be defined as an appropriately maintained “system service” which can be created in various ways (through the use of current resources and processes and relevant financial logic) (Palzkill-Vorbeck 2012). The so-defined resilience is in relation to the business indicators of resilience presented in Table 2.7.

Adaptability

Repeatability Consistency

Impact scale

Accessibility

Migration capability Innovativeness Economization

Profitability

Source: (A. Jabłoński. Skalowalność modeli biznesu w środowisku sieciowym. Difin: Warszawa, 2015, p. 127)

Evaluated in Evaluated in Evaluated by Evaluated by Impact Accessibility as a Evaluated in Subjectively Evaluated Evaluated terms of the terms of the assessing the scale—for quality terms of evaluated by according to in terms movement the occurrence ability of the example on parameter by exchanging experts on the ability to of of entities business of the business the domestic indicating a business quantitative change the indicators embedded model’s sequential model to market by given model scales configuration verified, in the ability to use of the systematically using the communication components through the of the related to network, integrate business configure Polish tool, for through the adopted business the entry and into model to itself towards language example the network innovation model that structure exit from mechanisms create the ability to when Internet or and assessment creates a of costs the typical for value in generate emigrants Facebook, or creating criteria certain and network, the the continuous do not use other social new values resource into revenues. movement functioning network. value in the the model, media portals a high level and flow of of the network. or a global or other of business network scale, when platforms profitability model and in the it does not which make it components network have to be possible to through the languageconduct network, adapted to business. the dynamic the emergence language of of new the country business and, for models in example, the network English, and Spanish or through the another network. global language is used.

Dynamics

Business model features

Table 2.6  List of the scalability parameters of the business model in the network together with their interpretation

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Table 2.7  Summary of the business indicators of resilience Indicator

Description

Leadership and Management Situational Awareness

An ability to make critical decisions about how to do business Knowledge of internal and external environments Having an effective network of physical and social capital Having the infrastructure to mitigate changes Having a dynamic ability to respond to changes Adapting to market changes An ability to create additional sources of income

Network Robustness Planning and Readiness Adaptation Ability Market Sensitivity Innovation and Diversification Access to External Resources. Ability to Use Knowledge and Information Compliance and Regulations Outstanding Business Model Core Personnel Competencies

Having access to additional assistance from third parties Awareness and access to available assistance, such as government funding Conducting activity in accordance with the rules and regulations Self-control of performance for future decisions regarding the functioning of the company Having key competent employees

Source: Tibay et al. (2018)

The disadvantage of the presented set of indicators is the lack of reference to social and environmental criteria, leading to the increased socialization of the business model from the point of view of global environmental challenges and changes in the behavior of human communities. The reduction of CO2 emissions and other environmental and social indicators should be taken into account in the process of designing the indicators of business model effectiveness. The indicators presented in the table and their descriptions fit perfectly into such elements that determine the success of social business models. They are all dynamic, as is required in the digital world. Even more important is the combination of personal characteristics of managers with the digitalization of reality based on building numerous communities. Only then will the tight, digital business ecosystem be fully operational. In this interpretation, the concept of the robustness of the business model in the digital economy should also be addressed.

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The robustness of the business model is now becoming one of the key elements of business continuity management toward a long-term value and high effectiveness management system. Four factors that influence business model robustness are identified: (1) component dynamics, (2) tolerance for variation, (3) feedback about effectiveness and (4) adaptability (Täuscher and Abdelkafi 2015). The robustness of a designed BM is seldom tested vis-à-vis the fast and unpredictable changes in digital technologies, regulation and markets (Haaker et al. 2017). Yuliya Snihur and Christoph Zott argue that firms implementing business models innovation (BMI) can design their new business models so as to acquire legitimacy and simultaneously discourage imitation using three elements of the new business model—content, governance and structure—either in conjunction or independently (Snihur and Zott 2013). From this perspective, it is important to skillfully manage change through its implementation, taking into account factors that trigger it in the environment and inside the organization. The robustness of the business model stems from the organizational DNA, which is the source of managers’ decisions related to the conceptualization and operationalization of the business model. It becomes the foundation and platform for its initial monetization. This approach generates the first value proposition and the income generation logic that converts payments into profits. It is also worth noting that the robustness of the business model does not exclude its permanent evolution as part of its market exploitation. The robustness of the business model should be considered taking into account the life cycle of the organization. At each stage of the organization’s development, there are other features of business model robustness. It is also related to the robust system built into the business model. In the opinion of the author, the robustness of the business model is the ability to recognize, neutralize and destroy negative factors and structures affecting the business model. In a more general sense, it means the ability to actively and passively protect the business model from organizational pathogens. Then, the attributes (features) of business model robustness, which may be either primary or secondary, gain particular importance. Table 2.8 shows the features of the primary and secondary robust systems depending on the life cycle of the organization along with the evolution of its business model. This analysis includes the following features:

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Table 2.8  Features of the primary and secondary robust systems depending on the life cycle of the organization along with the evolution of its business model Features The organization’s Primary robust life cycle along system built into with the the business evolution of its Secondary robust system built into the business model. business model No model Features

2.

Incubation Initial capital First value proposition for customers Dynamic innovations Primary competencies of the first Board – Growth

3.

–

Maturity

4.

–

Decline

1.

Source: Own study

–

Growth rate of revenue Growth rate of profit Growth rate of fixed and current assets Tax efficiency Cost of capital Increased product, process, organizational and technological innovations Increased quality of products and processes Increased competencies of managers and other employees Stability of revenues Stability of profit Stability of fixed and current assets Stabilized competencies of managers and other employees Sustainable decline in revenues Sustainable decline in profit Sustainable decline in fixed and current assets High quality products Low level of product, process, organizational and technological innovations High level of competencies of experienced managers and other employees

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• sales revenues (thousands PLN)—revenue that is a product of the number of products, works, services, goods and materials sold and the relevant unit sale price, • net profit (thousands PLN)—actual profitability measure, that is, the sales margin and discounts after deducting operating costs and taxes. • tax efficiency (%)—a ratio of the amount of final tax due to the value of the tax base (it informs about the actual taxation of income, i.e. tax base, taxpayer), • fixed assets (thousands PLN)—part of the assets of an economic entity with an anticipated period of use of longer than one financial year, • current assets (thousands PLN)—assets that will be used (e.g. raw materials), sold (e.g. products) or otherwise used in the near future (up to one year from the balance sheet date), • the cost of capital (%)—a financial indicator that informs about the average relative cost of capital employed by the enterprise in financing the investment, • product, process, organizational and technological innovations—product innovations concern goods or services, consisting of the launch of a new product or the significant improvement of an already existing product; process (technological) innovations involve implementing new or introducing significant improvements in the methods used by the organization for manufacturing, distribution and supporting activities in the field of products or services, while organizational innovations allow for the implementation of a new organizational method in the operating principles adopted by the company, which has not been applied in a given company so far, and which aims to improve its operation. • the competencies of managers and other employees (change in the Management Board compared to the previous year). These factors allow for the introduction of the most important aspects of the company’s operations. The features adopted are suitable for the organization’s life cycle along with the evolution of its business model. The assessment of business model scalability and robustness is even more challenging since firms need to connect their value proposition (to customers) and their societal

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value proposition in a scalable and reinforcing manner (Täuscher and Abdelkafi 2018). The robustness of the business model is associated with protection. Business model protection is required, especially in terms of business continuity management. The better the protection of the business model, the longer it can be exploited. To protect the business model, one should define its key attributes, which are also its know-how. Features that are conducive to the lack of robustness of business models include the lack of appropriate layers of prevention, supervision and counteracting in the decision-making process undertaken by organization managers. The organizational antigens of the business model are required as a result. The organizational antigens of the business model are components that, after penetrating the business model, trigger an immune (protective) response; they are the factors which protect (cover) the business model and influence its creation. These include: • designed and implemented functional management systems, • implemented decision-making mechanisms at the strategic, tactical and operational levels, • logically built potential for the development of organizational competencies and intellectual and social capital. Organizational pathogens (internal and external) are factors that affect the destruction of the business model. These include: • hostile behavior by the organization’s stakeholders including employees (opportunistic, diversionary behavior etc.), • deliberate lack of supervision and full control over the functional systems and individual processes in the organization by managers, • deliberate lack of development of organizational competencies and intellectual and social capital. Mitigation is a tool that protects the robustness of business models and is understood as continuously weakening organizational pathogens. The susceptibility of the business model to organizational pathogens should be assessed each time.

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Barriers that protect the business model against organizational pathogens should be implemented. An event tree method can be used to eliminate organizational pathogens affecting the organization’s business model. The business model has inherent immune memory, which grows along with its evolution. The robust system of the business model is a related system of factors that enable the mechanisms of business model robustness to operate properly.

2.5 A  Digital Business Ecosystem as an Environment of the Resilient Business Models of Companies Ecosystems survive thanks to the adaptation abilities and robustness of individuals and their interactions (Boschma 2015). Digital business ecosystems are new forms of value creation in networks where digital infrastructure streamlines self-organization mechanisms (Süße et al. 2017). While evolutionary theory encounters natural systems, digital ecosystems are artificial. Potential participants in shared digital business ecosystems must first establish mechanisms which are similar to natural ecosystems. They touch upon the dual role of digital technology as an accelerator of environmental turbulence and enable participants to deal with complex, dynamic and rapidly changing environments (Sawy and Pereira 2013). Briscoe defines the ecosystem of digital business as “distributed adaptive open socio-technical systems, with properties of self-­ organization, scalability and sustainability, inspired by natural ecosystems” (Briscoe 2010). Digital business ecosystems can be understood as a group of companies or organizations connected by a common interest in the well-being of digital technology in order to materialize them for their own product or service innovation (Selander et al. 2013). Table 2.9 presents a comparison of parts of the digital ecosystem with regard to digital foundations, production ecosystems, consumption ecosystems and digital monopolies.

Source: Subramaniam et al. (2018)

Core strategic action

Channel product-in-use Embrace new information from the digital digital envelope onto technologies to production. make incremental changes to traditional business processes   • Not yet  •  Extends a firm’s Key operational prevailing product characteristics features and service of product-in-­ options use   • Protected in-house information with tight control over APIs  •  Scope restricted to product and user  •  Useful for product features and services customization   • Useful for predictive maintenance None   • Continuous Basis for customization of strategic features and service advantage offerings due to learning over time

Digital foundations Production ecosystems

Table 2.9  Comparison of parts of the digital ecosystem Aggregate multiple sources of product-in-­ use information

Channel product-in-use information from the digital envelope onto consumption ecosystems

 •  Propensity to  •  Expands the firm’s control the hub of the scope into new domains digital ecosystem because complementary network entities find new value  •  Relevance in many  •  Shared with open overlapping APIs ecosystems   • Scope expands serendipitously; encourages unstructured growth  •  Versatility of productin-use information for complementary products/ services   • Domination of   • Network effects ecosystem through through interactions control over multiple among complementary sources of product-inentities use information

Digital monopolies

Consumption ecosystems

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The presented set of stages of the digital ecosystem cycle is not complete in a sense that it only refers to IT attributes and does not take into account variables such as the problem of rejecting a product—service— business model due to lack of digital balance. Digital sustainability means the design of a technological solution that is in line with the assumptions of the triple bottom line and which ensures the expected functionality in terms of the digitalization of services while respecting and meeting the expectations of various stakeholder groups. Digital sustainability can affect the robustness of business models. A resilient ecosystem is able to “absorb” disturbances and undergo the changes necessary to transform its core behaviors, structures and identities into a system that is better able to respond to disturbances (Walker et al. 2004). The interface of the resilient business model and the resilient ecosystem where the business model is embedded, or which it is part of, is important.

2.6 T  he Operationalization of Resilient and Robust Business Models in the Digital Economy There are three categories in terms of the development of digital business models, namely automatization, extension and transformation (AET), which can be used to operationalize the resilience of digital economy business models. Automatization refers to cases where a company uses digital technologies to automate or strengthen existing activities such as information channeling or servicing communication. The extension illustrates cases when a company uses digital technologies to support new methods of doing business that complement, but do not replace, existing activities and processes. Transformation refers to cases when digital technologies are used to enable new methods of doing business and replace traditional ones. The AET classification enables research to systematically record the role of digital technologies in terms of the innovation in the business model (Li 2017).

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The Internet of Things also functions in relation to value-based management in the digital economy. Table 2.10 presents a mindset for the Internet of Things (IoT) in the area of value creation and capture. The way of thinking presented in the above table in terms of the IoT concept is a fundamental factor in the creation of digital business models. Based on the machine–machine interface, it may need other interfaces to provide full functionality in certain cases, namely the human–machine, human–human and machine–natural environment interfaces, the last of which cannot be ignored. A technical ecosystem must interact with the natural environment, and this interaction must be positive. It cannot generate an adverse impact on the environment without human control. In this sense, IoT should be designed with attention being paid to environmental and social factors.

Table 2.10  Mindset for the Internet of Things (IoT) industry Traditional product mindset Value Customer needs Solve for existing creation needs and lifestyle in a reactive manner Offering Standalone product that becomes obsolete over time Role of data Single point data is used for future product requirements Value Path to profit Sell the next product capture or device Control points Potentially includes commodity advantages, IP ownership and brand Capability Leverage core development competencies, existing resources and processes Source: Metallo et al. (2018)

IoT mindset Address real-time and emergent needs in a predictive manner Product refreshes through over-the-air updates and has synergy value Information convergence creates the experience for current products and enables services Enable recurring revenue Adds personalization and context; network effects between products

Understand how other ecosystem partners make money

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2.7 Conclusion New cognitive perspectives in management sciences are strongly focused on digital economy mechanisms. The digital economy has totally revolutionized and changed the rules of the market game. These rules have been embedded in ontological entities such as business strategies and models. In particular, business models have perfectly configured with the digital ecosystem due to their specificity. In this approach, their core attributes that determined this fit appeared. The resilience of the business model in the digital economy has come to light, whereby it is important to preserve the development of the company with the ability to protect it in the short and long term. The resilience of the business model guarantees the company’s ability to survive, absorb disturbances, respond appropriately to risks and also the ability to develop permanently. It seems, therefore, that the flexibility of business models may be, to some extent, an efficient and effective attribute of the long-term achievement of results while maintaining the development potential created by the digital economy.

References Boschma, R. (2015). Towards an Evolutionary Perspective on Regional Resilience. Regional Studies, 49, 733–751. Briscoe, G. (2010). Complex Adaptive Digital EcoSystems. In Proceedings of the International Conference on Management of Emergent Digital EcoSystems. New York, NY: ACM. https://doi.org/10.1145/1936254.1936262. Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W.W. Norton & Company. Chard, K., Caton, S., Rana, O., & Bubendorfer, K. (2010). Social Cloud: Cloud Computing in Social Networks. Retrieved from https://ieeexplore.ieee.org/xpl/ mostRecentIssue.jsp?punumber=5557896 Gajewski, W., & Paprocki, J. (2016). Pieriegud, Cyfryzacja gospodarki i społeczeństwa, Szanse i wyzwania dla sektorów infrastrukturalnych. Gdańsk: Instytut Badań nad Gospodarką Rynkową—Gdańska Akademia Bankowa. Guinard, D., Trifa, V., Mattern, F., & Wilde, E. (2011). From the Internet of Things to the Web of Things: Resource-oriented Architecture and Best Practices. In D.  Uckelmann, M.  Harrison, & F.  Michahelles (Eds.), Architecting the Internet of Things. Berlin and Heidelberg: Springer.

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Haaker, T., Bouwman, H., Janssen, W., & de Reuver, M. (2017, May). Business Model Stress Testing: A Practical Approach to Test the Robustness of a Business Model. Futures, 89, 14–25. Ibarra, D., Ganzarain, J., & Igartua, J. I. (2018). Business Model Innovation Through Industry 4.0: A Review. Procedia Manufacturing, 22, 4–10. Jabłoński, A. (2019). The Impact of Organization DNA on the Robustness of Business Models. In M.  Jabłoński (Ed.), Strategic Value Management a Dynamic Perspective. New York: Nova Publishers Inc. Jabłoński, M. (2017a). Labilność modeli biznesu a zarządzanie interfejsami w koncepcji ekonomii współdzielenia. Przegląd Organizacji, 9, 13–21. Jabłoński, M. (2017b). Technopreneurship as a Business Driver to Designing Business Models in the Creative Industry. In A.  Jabłoński (Ed.), Business Models Strategies, Impact and Challenges. New York: Nova Publishers Inc. Jørgensen, S., & Pedersen, L. J. T. (Eds.). (2018). RESTART Sustainable Business Model Innovation. Palgrave Studies in Sustainable Business in Association with Future Earth, ISBN 978-3-319-91971-3. Cham: Palgrave Macmillan. https://doi.org/10.1007/978-3-319-91971-3. Jung, B. (2017). Ekonomiki wokół gospodarki cyfrowej. Ekonomiczne Problemy Usług, 126(1/1), 128–129. Lenkenhoff, K., Wilkens, U., Zheng, M., Süße, T., Kuhlenkötter, B., & Mi, X. (2018). Key Challenges of Digital Business Ecosystem Development and How to Cope with Them. Procedia CIRP, 73, 168. Li, F. (2017). Technovation. https://doi.org/10.1016/j.technovation.2017.12.004. Metallo, C., Agrifoglio, R., Schiavone, F., & Mueller, J. (2018). Understanding Business Model in the Internet of Things Industry. Technological Forecasting & Social Change, 136, 298–306. Palzkill-Vorbeck, A. (2012). Business Model Resilience in the Context of Corporate Sustainability Transformation. Business Model Resilience— GIN2012—Support your future today!. Sawy, O. A. E., & Pereira, F. (2013). Anticipating Game Changers for “Enterprise 2020” in a Digitally-Intensive World. In Business Modelling in the Dynamic Digital Space. Berlin and Heidelberg: Springer. https://doi. org/10.1007/978-3-642-31765-1_1. Selander, L., Henfridsson, O., & Svahn, F. (2013). Capability Search and Redeem Across Digital Ecosystems. Journal of Information Technology, 28, 183–197. Snihur, Y., & Zott, C. 2013. Legitimacy without Imitation: How to Achieve Robust Business Model Innovation. Paper to be presented at the 35th DRUID Celebration Conference 2013, Barcelona, Spain, June 17–19.

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Sousa, M. J., & Rocha, Á. (2019). Skills for Disruptive Digital Business. Journal of Business Research, 94, 257–263. Subramaniam, M., Iyer, B., & Venkatraman, V. (2018). Competing in Digital Ecosystems. Business Horizons. Available online 24 October 2018. Süße, T., Weber, P., Lasi, H., & Wilkens, U. (2017). Enterprise Interoperabilität in internetbasierten Ökosystemen. In N. Gronau (Ed.), Industrial Internet of Things in der Arbeits- und Betriebsorganisation. Berlin: GITO-Verlag. Täuscher, K., & Abdelkafi, N. (2015). Business Model Robustness: A System Dynamics Approach. In Proceedings of the 15th EURAM Conference, Warsaw, 17th–20th June. Täuscher, K., & Abdelkafi, N. (2018). Scalability and Robustness of Business Models for Sustainability: A Simulation Experiment. Journal of Cleaner Production, 170, 654–664. Täuscher, K., & Laudien, S.  M. (2018). Understanding Platform Business Models: A Mixed Methods Study of Marketplaces. European Management Journal, 36, 319–329. Tibay, V., Miller, J., Chang-Richards, A.  Y., Egbelakin, T., Seville, E., & Wilkinson, S. (2018). Business Resilience: A Study of Auckland Hospitality Sector. Procedia Engineering, 212, 1217–1224. Vendrell-Herrero, F., Parry, G., Bustinza, O. F., & Gomes, E. (2018). Digital Business Models: Taxonomy and Future Research Avenues. Strategic Change, 27(2), 87–90. Walker, B., Holling, C. S., Carpenter, S. R., & Kinzig, A. (2004). Resilience, Adaptability and Transformability in Social-ecological Systems. Ecology and Society, 9(2):5. Wirtz, B. W. (2019). Digital Business Models, Concepts, Models, and the Alphabet Case Study. Springer Nature Switzerland AG.

3 New Economy Business Models in the Concepts of Big Data, the Sharing Economy and the Circular Economy

3.1 Introduction New concepts and ideological trends are operationalized through innovative technological solutions. Thanks to technological solutions, it is possible to implement global solutions whose potential is not yet being fully utilized. This results not only from technological issues but from sociological ones, in the sense that new generations use these solutions to a greater extent than older ones. Quality of life is now strongly correlated with access to digital technologies. The countries that have a higher level of digitalization have greater potential; therefore, they can implement new social ideas faster and improve people’s quality of life. The potential in the concepts of the sharing economy, the circular economy, and Big Data is very large. It allows you to create business solutions, and is also related to the so-called new concept of public management. This chapter describes the rules for creating new economy business models based on the assumptions of the sharing economy, circular economy and Big Data concepts. The dynamics of the ongoing market changes require a new look at the functioning mechanisms of business management. Often the core © The Author(s) 2020 A. Jabłoński, M. Jabłoński, Social Business Models in the Digital Economy, https://doi.org/10.1007/978-3-030-29732-9_3

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e­ lement of the organization’s operation is to ensure business continuity, which is no easy task. This requires strong embeddedness in the decision-­ making processes resulting from a properly constructed business model of the organization. The business model is becoming a key determinant of the success of today’s organizations. As it can be understood in many different ways, its conceptualization and operationalization under conditions of pressure, expectations and market uncertainty is interesting. A business model that is a mapping of tangible and intangible resources which create value in the short and long term ensures return at the level of the potential used for all actors gathered around the organization. According to this interpretation, it is important to build a robust business model that will resist market changes while satisfying market expectations. This robustness is often manifested in the robustness of the business model itself. It can be understood as maintaining the high effectiveness of the business model when aggregating and powering it with aspects of strategic and operational change. The business model should be developed in such a way that it can be subjected to volatile changes in the context of dynamic market changes and the emergence of new technologies and solutions. To design business models, a scenario approach can be applied which may allow for the minimization of the risk of failure of a new business undertaking, which is frequent in the digital economy (Jabłoński 2018). As changes are directed, among others, toward the principles of doing business under the conditions of the circular economy, the joint implementation of strategic activities, including this economy, becomes significant. It is important to link the concept of business models with their robustness in the circular economy. The constructive confrontation of the assumptions of the business model, together with its robustness, shapes a new dimension of company performance, especially in a network environment. In such an environment the path is also open to using the principles of the circular economy to achieve high performance through the skillful use of the business model. The scientific problem of management is related to the determination of mechanisms that ensure the robustness of business models of companies using the circular economy to ensure survivability, while at the same time achieving high performance.

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3.2 “ Open Data” Concept and Business Models The development of database systems, both in terms of the assumptions of the Big Data and Open Data concepts, creates conditions for the emergence of innovative business models. Collecting a large amount of data, processing it and using it to meet unrecognized customer needs is an area that has not provided opportunities to build business ventures so far. Open databases offer this opportunity and reveal new and unconventional ways of creating strategic value. Predictive analytics aims to predict future market development scenarios, the behavior of consumers and companies; it provides knowledge of how to model these behaviors and influence the formation of desirable attitudes. Digital data engineering provides brands with extensive knowledge of the customer and their behaviors, preferences and purchasing intentions (https://www.forbes.pl/ technologie/od-chaosu-do-zwyciestwa-jak-big-data-zmienia-modelebiznesowe-and-politician/h3zpwyq). In recent years, new trends have emerged, namely, “Big Data” and “Big Data Analytics,” which are becoming popular all over the world. They facilitate the analysis of entire databases in real time, as well as the development and use of machine algorithms for predictive modeling and decision making based on such models. (…) Big Data solutions require different processing possibilities that are not present in traditional databases to process text, image, sound, spatial data, and so on. Figure 3.1 shows Model V, which refers to the Big Data concept (Brock and Khan 2017, p. 1). Variety: Data types Velocity: Data production and processing speed Big Data

Volume: Data size Veracity: Data reliability and trust Value: Worth derived from exploiting Big Data

Fig. 3.1  Model V for the Big Data concept. (Source: Brock and Khan 2017, p. 7)

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Big data is characterized by the following data features: variety, velocity, volume, veracity and value. In the context of the development of the Big Data concept, a new idea of Open Data or—as regards government data—Open Government Data has emerged in recent years. With both the idea of Open Government and the concept of openness in mind, the Open Government Data (OGD) initiative was developed with the aim of publicizing information resources created by public administration or at their request (excluding sensitive data), as well as the free use and dissemination of open data by each citizen. The main reason for the mass publication of public administration databases, for example, is to provide software developers with the necessary information resources, provided that the applications created in this way will also be publicly available (Papińska-Kacperek and Polańska 2015a, p. 104). The creation of open data portals is a new trend in data collection and information formation which can be helpful for the individual and stimulate the emergence of innovative business models. However, while making a critical assessment of the presented model built from five key components, it is worth noting that each of these components has a different strength in the context of Big Data, which has not been emphasized in the summary presented. It is also important that these attributes have different meanings in semantic terms. Obviously, it is essential to use the letter V in this case, but this should not be a factor which determines the adopted scientific and application solution. Taking into account the noticeable increase in this phenomenon, it therefore seems important to understand how OGD is used to develop commercial products and services, and what its value is for the creation of business models in terms of aiming to describe the architecture of value creation. The Open Data Institute identifies five archetypes of business models within the framework of open data. They include suppliers, aggregators, developers, enrichers and enablers (Magalhaes et  al. 2014, p. 2). Other classifications additionally indicate business models such as facilitators and integrators. Selected business models that use Open Data are presented in Table 3.1. The examples of business models presented above confirm the assumption that a large amount of data aggregated in a systematic manner with

Enablers

Facilitators

1.

6.

(continued)

These are companies that provide customers with technologies such as applications or programs based mainly on or for use by OGD. In terms of supply, enablers can be understood as those serving the backbone of an open government ecosystem. It is used to provide governments and public agencies with state-of-the-art technologies for collecting, managing and disclosing public data, for example, hosting services, cloud computing or data management software. It is essential in ensuring that all levels of authority have the potential to achieve better results in response to the challenges of the future. Examples include Captricity and Xcential, which help governments unblock and transform static documents, including handwriting on paper, into data. At the other end of the process are companies such as Socrata, Granicus and Junar that provide cloud-based technologies. Government agencies can effectively improve data and offer citizens the ability to view, download, analyze and share data. This archetype of the business model is emerging but important as it is a kind of intermediary in an open government ecosystem. Facilitators support or accelerate the access and exchange of data between the supplier (government) and user (programmers, e.g., civic hackers, entrepreneurs) by simplifying and promoting access to OGD. This may mean resending or repackaging data and technologies, such as web applications, databases and APIs. Both creators and end users can navigate, research and then gain insight into the data. For example, Quandl helps users access data and explore complex finance, economics, society, health, energy and demographics. PolicyMap is a national online mapping tool offering over 20,000 indicators, many of which come from the US Census Bureau, the Labor Office, the Statistics Office and the Consumer Finance Protection Bureau. Another example is Enigma.io, which is a platform that centralizes public data about companies, people and locations, and currently offers one of the largest and widest public data repositories. Additionally, it facilitates assistance to other private sector organizations and government agencies in the process of submitting obligations pertaining to information in accordance with the law. Companies such as IPHIX, Ez-XBRL and Calcbench help customers (mainly companies in the financial sector) through effective access, data processing and transfer from a corporate financial data repository.

Business model name based on Description No. Open Data

Table 3.1  Selected business models that use the OGD

Integrators

This archetype of the business model concerns companies that integrate OGD into existing business models in order to further improve their existing offer. An integrator can be any company that uses open government data, combining it with internal data or other types of proprietary data in order to increase the capabilities of its operations. These companies operate in various sectors (e.g. biotechnology, investment banking, real estate and insurance). The company can potentially isolate the value from OGD at any stage of the value of the supply chain (e.g. logistics, research and development, marketing and sales). There are many examples of companies in this category, ranging from large companies such as LexisNexis and Experian (that use records from thousands of sources, including public, private and legally regulated data). For example, it can be a company that uses a mail data directory to provide potential customers with offers. In general, the use of OGD in this case seems to create a competitive advantage.

Source: Own study based on Magalhaes et al. (2014, p. 3)

7.

Business model name based on Description No. Open Data

Table 3.1 (continued)

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the use of technology creates new opportunities for designing business models. The core of the business model being developed is access to and the use of data. Value generation logic for the customer is embedded in the strategic resource, namely access to the data in question. In the context of the development of the network economy, a need to design network business models arises. Networking emerges in three basic formats. The model (Palo and Tähtinen 2013, No. 42, p. 774) is an important solution in the component perspective of networked business models. It has an interesting graphic and substantive presentation. In this model, business net development is the core. The next layer is defined by business opportunity development and the last by a business development model. It presents the aspects of business model development by means of the network. 1. In analogical terms, when relationships occur between companies in the organizational sphere—in this case, a network solution can be a cluster of companies and supporting institutions. 2. A network may also have a hybrid character when interorganizational relationships are supported by means of IT cooperation platforms used for the development of technology, communication or the exchange of information and knowledge. 3. In technological terms, a network may be completely operationalized through communication between technical systems. Such a situation will concern interfaces between e-business models. Jabłoński and Jabłoński defined the following attributes of the networked business model: 1 . A business model does not exist without a network. 2. Some components of business models (e.g. a value proposition for customers) depend on activity in the network. 3. A business model is based on the cooperation of the company with a minimum of one partner. At least one component of the business model must integrate with another model. 4. Development of the business model depends on the development of other business models.

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5. The strength of the relationship and the activity of players in the network ensure the consistency and sustainability of the business model (Jabłoński and Jabłoński 2013, p. 38). The graphical model of networked business models was presented by Palo and Tähtinen (see Fig. 3.2). Networking is particularly evident when business models function within the framework of the sharing economy. The nature of this idea allows strategic resources to be shared in a variety of ways; thus, a number of innovative solutions emerge. Figure  3.3 shows the attributes of the resource sharing process in the context of the assumptions of the concept of business models. Designing, reconfiguring and adjusting business models are processes that are implemented properly throughout the life cycle of the business model by the creators of innovative business ventures. From a broader perspective, the conceptual and technological sphere of the design process at least should be distinguished. Both are important in the business environment in terms of the Sharing Economy and Open Data. In both cases, the technology stimulates the chances of creating an innovative Actors – firm level business models Business opportunity identification, development and exploitation – at the net level – based on firm level business model Networked business model – net level business model

Fig. 3.2  Elements of the networked business model. (Source: Palo and Tähtinen 2013, No. 42, p. 774)

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Select technologies and features to be embedded in the product/ service

Design mechanisms to capture value

Determine the benefit to the customer from consuming/ using the product/ service

Design mechanisms to capture value

Identify market segments to be targeted

Confirm available revenue streams

Create value for customers, entice payments and convert payments to profits Fig. 3.3  Elements of business model design. (Source: Teece 2010, p. 173)

idea. The key stages in the design of business models were proposed by Teece (see Fig. 3.3). Teece proposed a never-ending cycle of the design process aimed at creating value for customers and ensuring that payments are converted to profits. The process includes the selection of technology and features to be embedded in the product or service, determining the benefit to the customer, including the type of consumption and usability, identifying market segments to be targeted, determining the expected revenue stream, and designing mechanisms to capture value. The scheme proposed by Teece can generally be used in the process of designing business models within the framework of Open Data and Sharing Economy concepts with certain conditions. The conditions result from the specificity of these new concepts that are important for the development of business models.

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It is worth noting that the presented model is very important and should be used to design business models. While conducting a critical analysis of the adopted solution, however, in this model, in the area of converting payments into profits, the component of the adopted method of its monetization should be emphasized. Then, it seems that the adopted scheme would be complete in relation to the new dimensions of the economy as, between the component canvas of the business model and the adopted mechanisms of value capture, the logic of monetization of payments made should be defined as an innovative process which enables cash flows. The different method of monetization adopted will generate various cash flows. Levy’s proposal was used to propose the stages of the business model design process in the context of new technological and business conditions, which, within the framework of part of the so-called User Experience (UX) strategy, indicated content designed to create innovative products and business models. Design starts with the first contact the user has with the value proposition, and lasts until the user can no longer do without the product. Design is carried out using the so-called funnel matrix. (…) The goal of filling in the funnel matrix (Table 3.2) is to force the team working on the product to think through the prism of all potential actions that the customer has to take, moving through the funnel to be a recurring user. The proposed solution shows key project stakeholders, namely, a potential customer, a qualified potential customer, a customer, a repeat user and a recommending party. (…) Every feature or function must make the product better and easier to use rather than more complicated (Levy 2017, pp. 177–204). This specific type of business model design is mainly carried out through the prism of creating value for customers and identifying such functionalities of the system that will allow for the establishment of a lasting bond with and loyalty to and from customers. An important aspect of designing the funnel is to precisely identify customers in the context of the various levels of customer loyalty and trust (users in terms of the proposed solution). The method requires defining the scope of potential use of the product, indicating the user’s process supported by the system, defining the desired operation, the necessary business tasks, indicators, required functionalities and verified conclusions.

Definition of the stage (write User your own) process

Source: Levy (2017, p. 182)

Potential A user who may need your interested party product. Potential A person or organization customer showing interest in your product (e.g. by giving their e-mail address). Anyone who demonstrates a Qualified desire to own your product potential by entering in valuable (to customer you) interactions with it. Customer A person or organization that pays to use your product. Repeat user A customer who uses your product regularly. Recommending A user who recommends your party product to others.

Stage of the funnel

Funnel Matrix:

Table 3.2  Empty template of the funnel matrix Desired action

Business task

Required Indicators functionality

Verified conclusions

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All this allows for the use of testing and experimenting on the proposed solutions to achieve the full functionality expected by the customer and the flexibility of the business solution. When making a critical assessment of the adopted solution, it is worth noting that it could be presented either in the form of a graph or an algorithm. It would be more understandable for managers who apply it. In the context of the approach described above in terms of designing business models, it is worth presenting the recommendations of Nogalski, Szpitter and Jabłoński in the area of the flexibility of designed business models. Flexibility becomes a function of the purpose of designing business models in an uncertain situation. Its assumptions should accompany the creators of new models. To achieve flexibility, attention should be paid to two areas at the design stage, namely, a creative approach to designing business models, and pragmatism and rationalism in the process of looking for various alternative solutions in the field of new behavioral changes based on a modular approach (Nogalski et al. 2016, p. 101). Here we will deal with both areas of business model design. Creativity in designing business models will help identify new proposals for delivering value to the customer, and pragmatism will facilitate the choice of the optimal technical solution for this purpose. The presented approaches to designing business models do not exhaust the issue. However, they are an indication of modern trends where design takes place together with the active participation of the customer, which results in the process of the dynamic shaping of business models as part of the process of co-creation with the customer—it is the user in many cases.

3.3 T  he Assumptions of Digital Sharing Economy Business Models The digital economy is largely based on the principles of the network of links between market players, where communication platforms not only shape the potential to effectively deliver the proposed value to customers, who are usually the users of these platforms, but are fully designed to build a community of supporters who should foster the monetization of business models after some time.

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Technology

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Sharing Business Model Compass

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B2 B B2C RO W D P2 P

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C oop

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Fig. 3.4  Sharing Business Model Compass. (Source: Cohen and Muñoz 2017)

Figure 3.4 shows the attributes of the resource sharing process in the context of the assumptions of the concept of business models. The Sharing Business Model Compass presented in Fig. 3.4 shows six key areas, which include shared resources, a governance model, a platform type, technology, transaction type and a business approach. These areas shape the structure of the designed business model in terms of its configuration and functionality. The compass confirms that there is a multitude of scenarios and alternative constructs designed in this concept of business models. Examples of business models of companies referring to the assumptions of the sharing economy concept include companies such as Uber, BlaBlaCar, ZipCar, finansowo.pl, Polak potrafi, iParkomat, Ulala Chef, Skiltrade and others.

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Designing, reconfiguring and adjusting business models are processes that are implemented properly throughout the life cycle of the business model by the creators of innovative business ventures. From a broader perspective, the conceptual and technological sphere of the design process at least should be distinguished. Both are important in the business environment in terms of the sharing economy and Open Data. However, the presented picture can be critically assessed and a fundamental question can be asked as to whether it can really be possible to conceptualize and operationalize this business model by means of this compass and whether the data presented there is complete and sufficient. It seems that, as in previous critical analyses, a monetization component is also missing in this case. There is, after all, a strong relationship between the adopted mechanism of sharing and the adopted method of monetization through this solution. There may be numerous monetization methods which lead to different results in the form of actual cash flows. The issue of sustainability also expands the scope of its impact into the area of the digital economy. In addition to the three classical pillars underlying the assumptions of this approach, namely Economy, Environment and Society, the fourth component of technology is also used. This is particularly important in the use of sharing economy digital platforms (see Table 3.3). Each of the variables that characterize the assumptions of sustainable business models for the digital economy reveal a new perspective on building a fair process of delivering value to stakeholders. In the case of the digital economy in particular, a phenomenon of the co-creation of value for and with communities occurs. It is significantly reflected in the sharing economy. When conducting a critical analysis aimed at the proper synthesis, it seems that the compilation does not include the approach to digitalization, which strongly correlates with the elements in Table 3.3. It would be interesting to refer simultaneously to a sustainability factor by means of the social and digital approach. Moreover, if we assume that digitalization is included in technology, the interpretation adopted would be too narrow and not very precise. The sharing economy is widely discussed in the relevant literature. Many authors interpret this concept differently. Table 3.4 shows a few

Source: Daunoriene et al. (2015, p. 839)

Economy

Perspectives

The economy is defined as an organizational domain that Production and Resourcing; Exchange and Transfer; emphasizes the practices, discourses and material Accounting; Consumption expressions associated with the production, use and and Use; Labor and management of resources (adapted from Circles of Welfare; Infrastructure; Sustainability 2011, p. 9). Wealth and Distribution Materials and Energy; Environment The ecological sphere is defined as an organizational Water and Air; Built-Form domain that emphasizes the practices, discourses and and Transport; Emission material expressions that occur across the intersection and Waste between the organizational and the natural realms (adapted from Circles of Sustainability 2011. p. 10). Society The social sphere is defined as an organizational domain Social equity; Health equity; Community development; that emphasizes the practices, discourses and material Social support; Human expressions associated with formal and informal rights; Labor rights; Social processes; systems; structures; and relationships actively responsibility; Social support the capacity of current and future generations justice; Social integration; to create healthy and livable communities (adapted Cultural competence; from McKenzie 2004, p. 12, 13) Human adaptation Technology The technological sphere is defined as an organizational Intermediate; Progressive; domain that supports and enhances a “good life” for all Alternative; Light-capital; Labor-intensive; of its employees, customers and society as well without Indigenous; Low-cost; compromising the Earth’s ecosystem or the prospects of Soft; Liberatory later generations (adapted from Vergragt 2006, p. 7).

Sustainability area Definition

Table 3.3  Sharing economy sustainable development perspectives

Akubue (2000)

Omann and Spangenberg (2002); James et al. (2015).

Circles of Sustainability (2011)

Circles of Sustainability (2011)

References

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Table 3.4  Narrow and broad definitions of the sharing economy Author

Definition

Narrow definitions Benkler The sharing economy refers to a class of resources or goods that (2004) are amenable to being shared within social sharing systems rather than allocated through markets. Social sharing also constitutes an “alternative modality of production” based on gifting and the free participation among “weakly connected participants.” Belk (2014) “True sharing” and “pseudo-sharing” are distinguished. “Sharing is an alternative to private ownership that is emphasized in both marketplace exchange and gift-giving.” Pseudo-sharing is a phenomenon whereby commodity exchange and the potential exploitation of consumer co-creators present themselves in the guise of sharing or a business relationship masquerading as communal sharing. Cockayne The “on-demand” or “sharing” economy is a term that describes (2016) digital platforms that connect consumers to a service or commodity through the use of a mobile application or website. The access economy, (…) also known as sharing or the peer-to-­ Eckhardt and Bardhi peer economy, (…) provides temporary access to consumption resources for a fee or for free without a transfer of ownership. (2016) The sharing economy can be defined as “consumers granting Frenken each other temporary access to underutilized physical assets and Schor (“idle capacity”), possibly for money.” (2017) Stephany The value-sharing economy means using underutilized assets and (2015) making them accessible online to a community, leading to a reduced need for ownership of those assets. Broad definitions Habibi et al. We suggest a sharing-exchange continuum that helps distinguish (2017) the degree to which actual sharing is being offered. Lessig The sharing economy can be described as the hybrid economy, (2008) which is either a commercial entity that aims to leverage value from the sharing economy, or it is a sharing economy that builds upon a commercial entity to better support its sharing aims. Muñoz and A socioeconomic system enabling an intermediated set of exchanges of goods and services between individuals and Cohen (in organizations, which aim to increase efficiency and the this issue) optimization of under-utilized resources in society. Schor (2013) Sharing activities fall into four broad categories: recirculation of goods, increased utilization of durable assets, exchange of services and sharing of productive assets. Botsman An economic model based on sharing underutilized assets from (2013) spaces to skills to stuff for monetary or non-monetary benefits. Source: Acquiera et al. (2017, p. 3)

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narrow and broad definitions of assumptions pertaining to the sharing economy. Conducting a critical analysis of the adopted definitions in terms of narrow and broad definitions of the sharing economy, it should be said that the very approach as a narrow and broad approach is cognitively very interesting. However, it is worth considering whether such a combination fully reflects the spirit of this concept, especially in the context of business models or social business models? The sharing economy is the result of several overlapping concepts, technologies and solutions of a social nature. Acquier, Daudigeosb and Pinksec graphically demonstrated the central place of the sharing economy compared to the following concepts: the Access Economy; the Community-Based Economy; the Platform Economy, the Access Platform, Community Based Access and the Community Based Platform. The Access Economy includes a set of initiatives for sharing underutilized assets (material resources or skills) to optimize their use. The Platform Economy is the second core of the sharing economy. It is defined as a set of indirect initiatives of decentralized exchanges among peers via digital platforms. The community-based economy is the third core of the economy. It refers to coordinating initiatives through non-contractual, non-­ hierarchical or non-monetized forms of interactions in order to perform work, participate in projects or create exchange relationships (Acquiera et al. 2017, pp. 3–7) (see Fig. 3.5). When performing the critical verification of the model shown in Fig.  3.5, it must be clearly stated that the logic adopted is correct. Relationships in overlapping circles are appropriate and interesting. What it lacks, however, is the direct demonstration of the social aspect, and not only through the concept of community. In the sharing economy, roles are assigned to three entities that create a triadic B2B platform relationship. These include service enablers such as Uber, Airbnb, Luxe, and so on, service providers such as drivers, hosts in homes and customers, such as passengers, guests and users. A customer may be a firm (B2B) or an individual (B2C) (Kumar et al. 2018, p. 147). Fig. 3.6 shows the relationship between the actors constituting the structure of the sharing economy business model.

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ACCESS ECONOMY

COMMUNITYBASED ACCESS

ACCESS PLATFORM

SHARING ECONOMY

PLATFORM ECONOMY

COMMUNITYBASED PLATFORM COMMUNITY- BASED ECONOMY

Fig. 3.5  The sharing economy as a result of several overlapping concepts. (Source: Acquiera et al. 2017, pp. 3–7)

This approach emphasizes the role of partnerships in the creation of value, which should be sustainable so as to maintain the consistency of the business model as well as synergy between the expectations and needs of its participants. If this partnership is not preserved and some participants in the business model achieve more favorable conditions for themselves, then these models may wobble and lose their effectiveness and efficiency. Therefore, the application of sustainable business model archetypes can successfully improve the balance between organizational, human and technological aspects. It is worth looking at this picture in terms of constructive criticism, especially in relation to the place and role of the sharing economy business model in creating social solutions. This can be done by adding the

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Payment after Commission

Service Enabler (e.g. Uber, Airbnb, Luxe) Places Order

Payment

PROVIDES FEED BACK

PROVIDES SERVICE

Service provider (e.g. driver, host, valet)

Customer (e.g. Rider, guest, consumer) Fig. 3.6  Conceptual framework of the sharing economy business model. (Source: Kumar et al. 2018, p. 148)

last additional block as an influence on the community, including the digital community. In terms of the conditions of the sharing economy concept, many proposals of business models are shaped. Many things can be shared so business models are created around these sharing spaces (Table 3.5). The business models presented point to a wide range of their application as well as the method of their monetization and thus income generation logic.

3.4 Circular Business Models The circular economy is currently one of the key areas of development on both the macroeconomic and organizational levels. The circular economy should be considered in systemic terms. This systemic approach is used to achieve goals focused on the efficient use of resources and should take into account an organization’s life cycle assessment and its business model. Life cycle assessment is a tool for analyzing the environmental burden associated with products at all stages of their life cycle—from resource extraction, through the production of materials, parts of prod-

1. Portals offering access to content

Example

P2P (e.g. Napster), iTunes Music Store, Spotify, Tidal, Legimi, Wikipedia, GitHub, hitRECord 2. Applications #toyota_ europe na for portalu cooperation Twitter, with the Start up “Via customer CRM”, IBM X-Force Exchange

No.

(continued )

The first services related to sharing digital content were P2P portals (e.g. Napster) and later the so-called Torrents, which were most commonly used in violation of copyright. With time, websites emerged with photographs or music services, the creators of which agreed to others copying them free of charge. Today, buying files, e.g. on iTunes is replaced with, e.g. a subscription to Spotify, Tidal and collecting e-books—with a subscription, for example to Legimi. Platforms for sharing and co-creation in this field are also created (from knowledge repositories such as Wikipedia or software, e.g. GitHub) to more commercial projects such as hitRECord, the creator of which invited the community to co-create multimedia productions. The policy of changing the manner of customer relationships results in the implementation of user-friendly cooperation platforms, which enable the creation of profiles on popular social profiles (e.g. #toyota_europe on Twitter) or through dedicated applications. Recently, the trend of engaging the recipients of mass market services is observable. An example is the start-up “Via CRM”, used for cooperation with, for example, public transport passengers. The application allows passengers to share their opinion on the standard of travel, which can contribute to its improvement. The client more often has access to, for example, a platform for reporting threats; by doing so, he or she creates resources for system security analysts, e.g. IBM X-Force Exchange—an innovative platform for exchanging and analyzing information on threats in the cloud. IBM specialists monitor and analyze information on problems from various sources, describing weak and strong points of security of software and data sets. The platform of this type is created by one economic entity and the users are its customers. Such functioning increases customer satisfaction because, in a sense, they may feel like co-creators.

Description of monetization

Table 3.5  Business models in the sharing economy

Source: Own study based on Papińska-Kacperek and Polańska (2015b)

4. Sharing resources designated for this purpose

Transactions regarding non-cash-free products and services—e.g. Wymiennik.org (allowing for neighborhood exchange, works on the basis of reciprocity with acceptable limits for each user), Thingo.pl (an intermediary in the exchange of goods and services that are not valued in units of any currency). Transactions regarding products and services priced at a specific contractual amount—they can associate recipients and providers from various fields. Transport services may consist of a joint trip (e.g. Uber, BlaBlaCar, Lyft. Gett.com) or transport of consignments (Jadezabiore.pl). These platforms earn from being an intermediary in transactions, while being a guarantor of the correctness of settlements between the parties (e.g. portals intermediating in renting apartments or rooms such as AirBnB, Wimdu). Transactions regarding financial products and services  –  Microdonations—used to sponsor social and charity projects and provide assistance to specific people in need (e.g. Siepomaga.pl) PolakPotrafi.pl, Transactions regarding financial products and services  –  Social micro-investments (e.g. PolakPotrafi.pl, Kikstarter.com)—they involve financing Kikstarter. large projects, especially at the start of their operation, thanks to many small investors. com Transactions regarding financial products and services Kokos.pl,  –  Social loans—granting or obtaining a loan via a social website, removing the need for Pozycz.pl, the services of a bank (e.g. Kokos.pl, Pozycz.pl, Ducatto.pl) Ducatto.pl OLX, Gumtree Transactions regarding financial products and services in each category, and sometimes non-cash transactions as well, are offered by classified ads websites such as OLX and Gumtree The creators provide their own resources for use, for example, by local communities. Nextbike.pl, For example, Nextbike.pl—operating in 11 Polish cities; using this service requires creating an Carsharing, account and paying the joining fee, after which you can borrow a bike, even for free, for a Avis, Hertz, short time. Another example—Carsharing—a car fleet sharing model, or Avis and Hertz car Wolneauto.pl rental. In new business models, the fleet may comprise the cars of owners who register on the platform, then we deal with the social carsharing model (e.g. wolneauto.pl).

Wymiennik.org Thingo.pl (active exchange portal), Uber, BlaBlaCar, Lyft. Gett. com, Jadezabiore.pl, AirBnB, Wimdu, Siepomaga.pl,

3. Platforms that associate transaction partners

Description of monetization

Example

No.

Table 3.5 (continued)

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ucts and the product itself, and the usage of the product to management after rejection, through reuse, recycling or disposal (in effect “from the cradle to the grave”) (Guinée 2002, pp. 311–313). Thanks to the system approach, the circular economy integrates social, economic and natural aspects at every level of management: • Micro level—through the creation of ecodesigns, ecoproducts, waste minimization, the introduction of environmental management system and so on. • Meso level—through the creation of industrial ecoparks • Macro level—the creation of eco-cities, eco-municipalities and ecoregions (Geng and Doberstein 2008, pp. 231–239) The circular economy aims to separate wealth from resource use, that is, to answer the question of how we can consume goods and services and not depend on the extraction of primary resources, and thus ensure closed loops, which will prevent the possible storage of used goods in landfills. Production and consumption also linked “pollution transfers” to the environment at every stage. The circular economy proposes a system in which reuse and recycling ensure substitutes for the use of primary raw materials. By limiting our dependence on such resources, it improves our ability and the ability of future generations to meet their needs. The circular economy increases the likelihood of the full use of sustainable development (Sauvé et al. 2016, p. 53). In the circular economy, growth is separated from the use of limited resources by destructive technology and business models based on longevity, sustainability, reuse, repair, modernization, renewal, capacity sharing and dematerialization [Accenture Strategy …]. Linder and Williander define the circular business model as “a business modelin which the conceptual logic for value creation is based on utilizing the economic value retained in products after use in the production of new offerings” (Linder and Williander 2017). According to Hollander and Bakker, a circular business model describes how an organization creates, delivers and captures value in a circular economic system, whereby the business rationale needs to be designed in such a way that it prevents, postpones or reverses obsolescence, minimizes leakage and favors the use

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of “presources” “over the use of resources in the process of creating, delivering and capturing value” (Hollander and Bakker 2016, pp.  1–8). According to Roos, “a circular value chain business model (or green business model) is one in which all intermediary outputs that have no further use in the value-creating activities of the firms are monetized in the form of either cost reductions or revenue streams” (Roos 2014, pp. 248–274). The circular business model is the way a company creates, captures and delivers value thanks to value creation logic designed to improve resource efficiency, contributing to extending the life of products and parts (e.g. through long-term design, repair and renovation) and closed material loops ([Nußholz 2017, p. 12). Circular business models have proven that they can potentially be consistent with economic performance. In fact, they can contribute to competitiveness by lowering production costs. More ambitiously, they can generate additional turnover by penetrating new markets and winning new customers, as well as protecting the corporation against the volatility of raw material prices in traditional markets. Some of these strategies seem to allow for the improvement of operating profit and profitability (Beulque and Aggeri 2016). Laubscher and Marinelli have identified six key areas for the integration of the circular economy with the business model: 1. Sales model—the transition from selling the volume of products to selling services and recovery of products from customers after their first life. 2. Product design/material composition—the change involves the design method and product design to maximize the reuse of the product, its components and high-quality materials. 3. IT/data management—a key competence is required to optimize resources, that is, the ability to track products, components and material data. 4. Supply loops—turning toward the maximization of the recovery of one’s own assets when they are profitable, and the maximization of the use of materials from recycling/components used to obtain additional value from the stream of products, components and materials.

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5. Strategic sourcing for own operations—building trusted partnerships and long-term relationships with suppliers and customers, including cocreation. 6. HR/incentives—change requires the appropriate adaptation of culture and the development of capabilities, reinforced by training programs and rewards (Laubscher and Marinelli 2014). The dynamics of the transformation of business models from the neoclassical approach, based on the assumptions of the classical economy, toward solutions that include social elements and the assumptions of the sharing economy can be observed. Evolutionary change in designing business models also occurs, from classical business models, to sustainable business models, to circular business models (see Fig. 3.7). When conducting a critical analysis of the drawing, a multidimensional reference should be made. Sustainability and circularity are, after all, specific attributes of a particular business model. It is not unambiguous that there is a real logical transition from the business model to the sustainable business model and finally to the circular business model as

Intensifying resource loops

Sustainable value

Pro-active multistakeholder management

Long-term perspective

Closing resource loops

Dematerializing resource loops

Slowing resource loops

Narrowing resource loops

Sustainable business model

Business model

Solutions for sustainability

Circular business model

Solutions for the Circular Economy

Fig. 3.7  Comparison of traditional, sustainable and circular business models. Zła numeracja. (Source: Geissdoerfer et al. 2018, p. 714)

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the subsequent stage of business model maturity as, in fact, these models have different goals. The sustainable business model aims to ensure the company’s ability to survive in the long-term while maintaining its ability to achieve long-term value. The circular business model aims to provide the ability to create a closed loop, a cycle which aims mainly to fulfill the environmental assumptions and criteria in a new dimension of understanding this solution. Therefore, it is worth paying particular attention to it. The presented comparison defines the relationship between sustainability and circular business models in the context of development. It is also important to compare it in the areas of the value proposition, value delivery and value capture. It may also be worth looking at it through the prism of the migration of value from a horizontal perspective and adopted monetization from a vertical perspective (see Table 3.6). The issue of circular business models has been developing very dynamically in recent years, and the definitions of this concept have been evolving in many directions. Many different approaches have been proposed for designing either circular or sustainable business models; however, there is no consensus for an integrated vision of both concepts (de Pádua Pieronia et al. 2018, p. 799). The assumptions of the circular economy are based on the application of the following principles, which, in whole or in part, constitute a configuration of business models focused on their implementation. ReSOLVE is a checklist of CE requirements proposed by the Ellen MacArthur Foundation that consists of six actions: regenerate, share, optimize, loop, virtualize and exchange, each presenting an opportunity for CE implementation (EMF 2015). The scope and interpretation of these six activities covers the following areas: 1. Regenerate—shift to renewable energy and materials, reclaim, retain and regenerate the health of ecosystems, return recovered biological resources to the biosphere. 2. Share—keep product loop speed low, maximize utilization of products by sharing them among users, reuse products throughout their technical lifetime, prolong lifespan through maintenance, repair and design for durability.

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Table 3.6  Deployment of sustainability dimensions in circular business models Circular business models Sustainability dimensions Economic

Environmental

Social

Efficiency

Protection of future generations

Value proposition

Value creation and delivery system

Incentives for Offerings actors in the (products and supply chain to services) with economic margin extend product use and return to ensure profit disposal to the value system Eco-efficient Products and production and services designed logistics to minimize operations depletion of natural resources

Maximize product Pro-active approach and service value toward for the well-­ stakeholders in being of society the closed loops Maximize process Maximizing the value for for the well-­ shareholders being of who accept the enterprise. company’s involvement in the social aspects. Long-term capacity to address economic, environmental and social concerns

Incremental and radical changes in the system level to ensure long-term partnerships

Value capture Profit (or at least a non-negative result) to each stakeholder

Reduced environmental burden through extracting more value from decreased natural resource consumption Further environmental consciousness of the value of products Capturing the financial value in order to have funds, capital for involvement in the development of the enterprise and building a social effect Preparation of current production systems to make the “perfect” circular economy viable in the future

Source: Own study based on Geissdoerfer et al. (2018, p. 714)

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3. Optimize—increase performance/efficiency of a product, remove waste in production and the supply chain, leverage big data, automation, remote sensing and steering. 4. Loop—keep components and materials in closed, loops and prioritize inner loops. 5. Virtualize—deliver utility virtually. 6. Exchange—replace old materials with advanced non-renewable materials, apply new technologies (Manninen et al. 2018, p. 418). The literature recognizes digital business models and digital technologies as factors facilitating the transition to the circular economy. They can be used to overcome the challenges of the circular economy (Bressanelli et al. 2018, p. 218). Digitalization can boost the transformation toward a more sustainable circular economy. It can help to close the material loops by providing accurate information on the availability, location and condition of products. Digitalization also enables more efficient processes in companies, helps minimize waste, promotes a longer life for products and minimizes the transaction costs. Thus, digitalization boosts the circular economy business models by helping to close the loop, slow the material loop and narrow the loop with increased resource efficiency (Anticainen et al. 2018, p. 45). Therefore, it seems reasonable to say that digital technologies support the emergence of sustainable and circular business models to a greater extent than traditional solutions.

3.5 S  tock Indices in Shaping Robust Business Models in the Circular Economy In order to define mechanisms for developing the robustness of business models in the circular economy, two well-known stock exchange indices, namely the Circular Index and the Respect Index, were compared in the analytical process. They were analyzed in terms of differences and common features as part of the initial information, dimensions (criteria) considered, the stages of research in creating a list of companies in each index, as well as the final effects obtained thanks to individual stages of the

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analysis of enterprises. Attempts were made to find the advantages of each index. The focus was on the economic, social, environmental and circular dimensions of the Circular Index, and then the individual steps of selecting companies for the Circular Index were described in detail. Subsequently, the criteria and stages conducted as part of the Respect Index were presented in order to select an appropriate list of companies (see Table 3.7). Both indexes focus on economic, social and environmental dimensions. In addition, the company’s circular aspect is examined in the Circular Index. The study consists of several stages in order to be able to isolate a list of companies that meet the criteria of each of these indexes. The Respect Index consists of three stages, and the Circular Index of five. However, both indexes are designed to make it possible to select a list of companies that operate in a responsible, sustainable manner and are focused on pro-environmental activities.

3.5.1 Circular Index Each of the Circular Index dimensions is focused on the following goals: 1. In the economic dimension, economic value is generated and distributed; R&D and employment expenditure must be maximized. 2. In the social dimension, accidents at work, job insecurity, absence from work, staff turnover and loss of productivity should be minimized. 3. In the environmental dimension, hazardous waste, water use and energy consumption should be minimized. 4. Taking into account the circular dimension, expenditure from the primary material and materials from recycling and reuse, the life and intensity of the products used and the efficiency of the recycling process must be maximized. In the first stage, examples of sustainable development indicators and circular indicators may be those defined in Table 3.8. In the second stage, the Delphi method is suggested as a means of establishing weights for sustainable development indicators and ­circularity

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Table 3.7  Comparative analysis of the Circular Index and Respect Index in relation to adopted, selected criteria Comparative criterion Preliminary information

Dimensions considered

Stages of research in creating a list of companies

Circular Index

Respect Index

 –  The index refers to a single company, not a supply chain.  –  A set of new indicators related to the circularity dimension was proposed. –  The suggested method may also be different. Instead of the AHP (Analytic Hierarchy Process), the Delphi method can be used. The Circular Index construction consists of four dimensions:   – Economic   – Social   – Environmental   – Circular There are five stages to achieving the proposed sustainability indicator:  (a)  Stage 1—Selecting circular indicators and sustainable development indicators  (b)  Stage 2—Determining the weights of the indicators  (c)  Stage 3—Normalization  (d)  Step 4—Aggregation method for building the index  (e)  Step 5—Construction of the index

The suggested method may also be different. Instead of the AHP (Analytic Hierarchy Process), the Delphi method can be used.

The criteria used are grouped by the following areas:  –  Environmental— environmental factors  –  Social—social factors  –  Governance—economic factors The research in creating the final list of the Respect Index companies consists of three stages. The first and second stages are carried out independently, without the participation of the companies themselves and only on the basis of public information. The third stage, on the other hand, includes direct visits to the companies surveyed, after prior consent to participate in the project.

(continued )

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Table 3.7 (continued) Comparative criterion

Circular Index

Final outcome The Sustainable Circular Index for the company is created by a set of indicators related to social, economic and environmental sustainability, circularity and appropriate weights. The Circular Index is versatile and simple because it allows for the assessment of the sustainable development and circularity of manufacturing companies in the field of comparative analysis between enterprises from the same or different industries.

Respect Index The study makes it possible to update the composition of the Respect Index. The current composition of the Respect Index is published on the website http://odpowiedzialni. gpw.pl/. After verification that takes into account the criteria adopted in line with the best management standards in corporate governance, information order and investor relations, which cover the areas of environmental, social and employee factors, only such companies that meet these criteria are included.

Source: Own study

indicators. This method aims to isolate the maximum amount of unbiased information and the quantitative assessment of uncertainty. The key steps in the Delphi method include: 1 . Defining and selecting experts 2. The number of internal stages 3. The structure of the questionnaire in each round of the study The number of internal stages can range from 2 to 7, and the number of participants from 3 to 15. The information requires knowledge and reliable experience in the field of sustainable development and cyclicality; therefore, a targeted approach is proposed when it comes to the selection of experts. Interviews should be carried out with academic staff/experts on research topics to verify the significance of the sustainable development and circular indicators studied and rank them according to their importance to the sustainability and cyclicality of enterprises. Each indi-

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Table 3.8  Examples of selected sustainable development indicators and circular indicators for the Circular Index Dimension

Examples of indicators

Social

 –  Number of accidents per year in the organization  –  Loss of efficiency by the organization  –  Percentage of women employed by the organization  –  Composition of management bodies and division of employees by sex, age and other criteria  –  Percentage of temporary employees in the organization  –  Absence indicator in the organization  –  The type and rate of injury, illness, days lost, absences and deaths related to work  –  Staff turnover in the organization  –  Total number and rate of new employees Economic  –  Direct economic value generated and distributed (operating costs, salaries and employee benefits, payments to capital providers)  –  Expenses for research and development  –  Number of persons employed Environmental  –  The rate of hazardous waste  –  The rate of non-hazardous waste  –  The amount of water used annually in industrial processes  –  The amount of energy consumed annually Circular  –  Input data in the production process  –  Tools during the usage stage  –  Effectiveness of reintroduction to circulation Source: Own study

cator rating should be measured with a score from 1 to 5, where 1 means “insignificant” and 5 means “very important” so that companies can be considered balanced or circular, depending on the indicators. To obtain a measure of consistency of panel responses, a Kendall coefficient of concordance (W) should be used for each round. This coefficient is used to examine the degree of the links between the rankings of several objects by several experts. This coefficient ranges between “0,” which indicates a lack of agreement between experts, and “+1,” which indicates the total concordance of experts in the ranking of various factors. The third stage includes normalization. It is necessary to integrate selected indicators into a complex sustainable circulation indicator, because they were expressed in different units. Sometimes, however, there

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is no need to normalize indicators, as in the case of indicators already expressed in the same unit. In the fourth stage, referring to the aggregation method for building the index, there are various linear aggregation methods. The most common aggregation methods are additive, multiplicative or additive weights, the use of which depends on a set of assumptions. For example, in order to adopt a linear method, it is necessary to observe independencies between variables, and all indicators should have the same unit of measurement. Multiplicative aggregation is appropriate when strictly positive indicators are expressed in different scales of coefficients, and entails partial sustainability. The proper selection of components of composite indicators and their weights is of key importance to the aggregation process. A simple method of weighing the factors is widely used in practice due to its transparency and ease of understanding for non-experts. Stage five selects the final set of indicators to assess sustainability and cyclicality of enterprises. The proposed Sustainable Circularity Index can be used by managers who consider the following issues: 1. The set of sustainable development and circular indicators should be adapted to the type of manufacturing enterprise. 2. The relative weights of the dimensions of sustainable development and cyclicality and relevant indicators should be available through a panel of experts via the Delphi method. 3. The suggested aggregation method is a simple method of weighing factors (SAW—Simple Additive Weighting).

3.6 Conclusion When summarizing the discussion, an important factor is to find appropriate rules which ensure the robustness of business models in the circular economy. The robustness of business models can ensure the organization’s ability to make permanent changes. The changes that can be accepted, implemented and controlled, associated with the acceptance of new trends in management and the degree of their use, generate an envi-

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ronment which is conducive to robust business models. Then the business model is also the source of value creation in every sphere of its life cycle and organization. Responsible management becomes reality and the rate of return from its operationalization is visible in the organization’s performance. The management of the organization’s life cycle by means of the circular economy determines the creation of special value for both the actors in the network where the enterprise is embedded as well as the enterprise itself in terms of the robustness of its business model. Responding to the research question: Does the skillful use of the concept of business model robustness among circular economy companies guarantee the organization’s ability to ensure business continuity and high performance?, it can be concluded that this is indeed the case. Further research related to the robustness of business models among circular economy companies may focus, among other things, on the following: • The relationship between the robustness of the business model and the high performance of circular economy organizations • An analysis of business continuity based on a robust business model • The circular economy in the context of the concept of business models The research limitations include: • A lack of comprehensive scientific research on the robustness of business models • A relatively limited number of studies on the relationship between business models in the circular economy • A lack of significant research into the relationship between the robustness of business models and organizational performance and ensuring its continuity in the circular economy sector Referring to the content of this chapter, the following final conclusions can be defined: 1. Innovation plays a leading role in the process of designing hybrid business models.

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2. The company has the opportunity to gain additional innovative potential thanks to the innovation of the business model based on the combined use of the Big Data and Sharing Economy concepts. 3. The concepts of “Big Data” and the “Sharing Economy” dynamically stimulate the chances of creating a series of innovative, hybrid business models. 4. The modern design of business models is based on a modular approach where a creative solution with the use of the configuration of components, integrated by means of a common technology platform, is a prerequisite for creating innovation. This platform reflects the hybrid nature of the designed business models. 5. Collections of large databases create opportunities for developing innovative business models where the value proposition is based on the processing of appropriate data. 6. Sharing resources allows for the design of business models that ensure savings, which allows for the creation of value propositions previously unavailable to poorer customer segments. Large amounts of data increase effectiveness as well as the range of impact and operation of hybrid business models based on the construction discussed. 7. The modern attributes of business models are based to a large extent on a strategy based in turn on user experience. Collecting data on user preferences is a key element of the business model philosophy based on the Sharing Economy. 8. Selected business models that use OGT (Open Government Data) confirm that a trend of new innovative business models supported by governments or based on their strategy of sharing large data sets has emerged. At the same time, a stream of private initiatives supporting the strategy of disseminating large data sets, including ensuring the possibility of sharing among different recipients at different times, is being developed.

References Accenture Strategy, Circular Advantage Innovative Business Models and Technologies to Create Value in a World without Limits to Growth. Retrieved from https://www.accenture.com/t20150523T053139Z__w__/usen/_ acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/

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