Sustainable Business Model Innovation in the Digital Age Based on the Dynamic Capabilities Approach

Today, responding to social and environmental challenges as well as the economic aspects is a major strategic concern for businesses. In the digital age, the lifestyle of customers has changed; therefore, businesses are struggling to present their products and services in novel digital ways to the new generation of consumers. To meet such challenges, every business needs to rely on its internal capabilities, update its internal capabilities based on external changes, and get out of the static state. The purpose of this study is to provide a model for business innovation in line with the sustainability and developments of the digital age based on the dynamic capabilities of businesses. Previous research did not investigate the required dynamic capabilities for creating sustainable digital business models. In addition, earlier models were presented statically. None of them considered the sequence and relationship of related capabilities. The present study tries to resolve this scientific gap.

This is a mixed methods study (both qualitative and quantitative). In the qualitative phase, meta-synthesis and content analysis were used and in the quantitative stage, the quantitative method of Interpretive Structural Modeling (ISM) was adopted.

The proposed model by this study consists of three approaches, four aspects, 16 dimensions, and 37 components, which are based on quantitative modeling of 16 dimensions in four main levels of "Sustainable Computing", "Sustainable Execution", "Sustainable Engagement" and "Sustainable Results", respectively. Because earlier models were presented in a standing and non-process manner, the sequence and relationship of the components related to all were not determined. This study eliminates this scientific gap.

Based on the results of this study, to innovate a business model, in addition to designing the business based on social and environmental sustainability components as well as digital technologies, it is necessary to pay attention to a new component called sustainable engagement. The concept indicates the need to pay attention to the empathy of businesses with society and the environment in addition to customers. Therefore, it is necessary for different businesses to pay attention to the mechanisms of creating sustainable engagement from the beginning of business design as a first step in their business design. For this purpose, it is necessary for business managers to acquire the skills and knowledge of design thinking in business. In addition, due to the increasing speed of environmental changes, it is necessary for businesses to consider agility and learning by doing in their business design. In addition, the digital technology factor is the most independent and influential. The economic, social, and environmental sustainability factors come with the least influence but the most dependence on other factors. The proposed model by this study can be used as a business model canvas to redesign and innovate the business model of large companies and start-ups that seek sustainability in the digital age based on dynamic capabilities.