Business model innovation and the adoption of digital technologies in incumbent firms

The adoption of digital technologies has been widely recognized as a relevant driver of business model innovation (BMI); however, detailed data on these variables are often not available, and empirical evidence is still scant. In this study, we investigate the determinants of business model changes, and in particular the role played by digital technologies, using detailed survey data for a sample of 2,514 Italian incumbent firms operating in the manufacturing and service sectors. We measure the intensity of technology adoption as the number of advanced digital technologies (e.g., Big Data Analytics, IoT, additive manufacturing) recently introduced by a company. To compute the variable capturing BMI, we rely on a series of survey questions on firms’ changes in their production, organization, finance and network activities, and compute the intensity of BMI as the number of changes that occurred in the aforementioned business areas. Our regression analysis reveals that the intensity of technology adoption is positively related to business model innovation, thus strengthening the extant evidence on the positive contribution of digital technologies to BMI.