Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs?

Harry Bouwman, Shahrokh Nikou*, Mark de Reuver

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

170 Citations (Scopus)
3778 Downloads (Pure)


Digital transformation is requiring companies to rethink and innovate their business models (BMs). However, small- and medium-sized enterprises (SMEs)have scarce time and resources for experimenting with their BMs and implementing new strategies. This paper examines whether SMEs that undergo digital transformation perform better if they allocate more resources for BM experimentation and engage more in strategy implementation. An empirical study was conducted on 321 European SMEs that actively use social media, big data, and information technology to innovate their BMs. Furthermore, structural equation modelling showed positive overall firm performance effects of more resource allocation to BM experimentation and more engagement in practices of strategy implementation. These effects were mediated by BM experimentation practices and company innovativeness. Moreover, fuzzy-set qualitative comparative analysis (fsQCA)revealed the presence of equifinality by identifying different configurations in which these antecedent conditions affect overall firm overall performance. The results of two methodological approaches showed that SMEs may take different routes to improve their performance when digital transformation is changing their BM. This paper is one of the first to analyse how SMEs can handle the impact of digitalization by spending more time and effort on innovating their BMs. Practical and policy implications are discussed.

Original languageEnglish
Article number101828
JournalTelecommunications Policy
Issue number9
Publication statusPublished - 2019

Bibliographical note

Green Open Access added to TU Delft Institutional Repository ‘You share, we take care!’ – Taverne project Otherwise as indicated in the copyright section: the publisher is the copyright holder of this work and the author uses the Dutch legislation to make this work public.


  • Big data
  • Business model experimentation
  • Business model innovation
  • Digitalization
  • SME
  • Social media


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