Unfolding the role of technological turbulence in business model innovation along the industry life cycle. Evidence from Italian firms

Business model innovation (bmi) has long been recognized as an important source of firm’s competitive advantage and performance. bmi has been also incorporated in the well-established industry-life cycle (ilc) framework of innovation dynamics, where bmi is mostly associated with the maturity stage. Despite its theoretical soundness, this framework does not fully explain the emergence of bmi, especially in earlier ilc phases, probably because it does not sufficiently account for technological dynamics. In this study, we investigate the role of technological turbulence in companies’ likelihood of operating with an innovative business model; in particular, we assess whether technological turbulence still matters once the ilc stage is accounted for. To identify innovative models, we retrieve individual business models using information from the companies’ websites and compare them with the prevalent business model of the industry. To capture technological turbulence, we create a sectoral indicator starting from patent data. Using a representative sample of 1,234 Italian firms, we show that technological turbulence is positively associated with business model innovation even after controlling for the stage of market development; this suggests that companies can successfully exploit this type of innovation regardless of the life-cycle stage of their industry.