Business model innovation in demand response firms: Beyond the niche-regime dichotomy

S. Ruggiero, Hanna-Liisa Kangas, Sari Annala, David Lazarevic

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34 Citations (Scopus)
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Demand response (DR) is an innovation emerging at the intersection of the energy and information and communications technology sectors. This paper aims to investigate the drivers of—and differences in—business model innovation (BMI) behaviours of firms operating in these two interacting industries. Results from 22 semi-structured interviews with representatives of Finnish DR companies show that external drivers of BMI include regulation, competition, and the demise of the telecom industry following the fall of Nokia. Whereas technology start-ups and companies from adjacent industries are motivated by entrepreneurial opportunities, incumbent energy companies are driven by the threat of losing their existing customers and need to increase efficiency. The BMI behaviours observed do not fall neatly into the often-used dichotomous categories of niche/new entrant and regime/incumbent, as firms show behaviours from both extremes. To overcome this binary thinking, we propose a morphological box model that represents the extreme states of firm BMI while allowing for flexibility.
Original languageEnglish
Pages (from-to)1-17
Number of pages17
JournalEnvironmental Innovation and Societal Transitions
Early online date17 Feb 2021
Publication statusPublished - Jun 2021
MoE publication typeA1 Journal article-refereed


  • Business model
  • Sustainability transition
  • Demand-side management
  • Sectoral reconfiguration
  • Multi-technology interaction


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  • SET: Smart Energy Transition

    Pyhälammi, A., Temmes, A., Auvinen, K., Juntunen, J., Ruggiero, S., Järvenreuna, V. & Ohrling, T.


    Project: Academy of Finland: Strategic research funding

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