Open innovation, networking, and business model dynamics: the two sides

Abstract

A business model describes the design of the value creation and capture mechanisms needed to yield profit. We contend that for a business model to be viable in turbulent and hypercompetitive environments, its dynamics are important and must leverage, out of all key business model modules proposed in different studies, on a combined value and network perspective. These different elements present, however, distinctive challenges for small innovative companies and larger firms. Moreover, the business model of small firms is sited in the business models of their partners, big companies in particular. The purpose of this article is to highlight the importance of a dynamic network perspective and to understand how the networked business models in action of large firms may affect small innovative companies. We examine here the networked business models of big pharmaceutical companies and venture capital firms which interact in open innovation with small biotech companies.

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