Analysis of Technological Knowledge Flows in Business Model Innovation

Abstract

With the extensive applications of Information and Communication Technologies (ICTs) in development of new business models, the business model concept is becoming an important research topic in the field of innovation and technology management. The Internet has driven innovation and changes across the business landscape and opened the era of e-commerce. Since many of, or sometimes even entire, commercial activities thus can be conducted on the Internet platform, ICTs are becoming a key enabler in the creation of new business models. Companies are keen to leverage ICTs to develop specific methods underlying business models and seek protection for these new inventions under patent laws. These inventions, called business model patents or business method (BM) patents, refer to various commercial techniques that are usually based on digital or software-based technologies. The value of BM patents lies in the fact that these patents contain essential technological knowledge regarding business model innovation and also can facilitate business model development and innovation through knowledge flows. Despite the importance of technological knowledge flows in business model innovation, linkages between business model innovation/evolution, technology and knowledge flows are a rather rarely explored subject. The present literature does not pay much attention to the technological basis of business model innovation, flows of knowledge in business technologies or quantitative analysis of business model innovation. To fill this research gap, the overall objective of this work is to explore technological knowledge flows in business model innovation based on patent analysis. This study consists of three research themes. The first research theme is to develop a structured approach to measure technological knowledge flows in business model innovation. The proposed approach integrates two complementary methods, the patent citation analysis and text mining technique. The empirical study applies the proposed approach to measure knowledge flows through BM patents and reveals that BM patents actively participate in stimulating knowledge flows in business model innovation. The second research theme is to identify patterns of technological knowledge flows in business model innovation. This study applies a dynamic approach to capture time-varying processes of knowledge flows in BM patents. A Hidden Markov Model, patent citation analysis and clustering technique are used to identify major temporal patterns of knowledge flows in BM patents. The third research theme discusses positions or roles of BM patents regarding knowledge flows in business model innovation. This study propose a systematic framework directed at investigating different roles of BM patents that facilitate knowledge flows for innovations in social commerce. The framework mainly uses several citation-based indicators to identify core BMs and specifies their roles according to knowledge flow patterns. This study extends overall understanding of the technological aspect of business model innovation by linking the concept of business model innovation with technological development and knowledge flows and providing systematic ways to utilize patent citation analysis and other effective techniques.