Business model theory-based prediction of digital technology use: An empirical assessment

Abstract

Firms invest heavily in their future use of digital technology to create and appropriate value and thereby survive and prosper. Such decisions regarding the future are part of a firm's foresight, which is a core element of a firm's dynamic capabilities. The contemporary toolbox for generating foresight is dominated by procedural methods, thus ignoring theory-based predictions of the future uses of digital technology. This paper presents the first empirical assessment of business model theory's ability to predict the future uses of digital technology by a given firm. Predictions for a specific niche of hemophilia firms are investigated. Outcomes related to these predictions are then observed. The results show the power of business model theory for deriving such predictions, implying that the managerial toolbox for foresight generation should be extended to include this theory. This study also provides several directions for further development of business model theory to increase its ability to account for value creation and appropriation from the use of digital technology.

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