Business model innovation and transformation towards net zero in digital services: theoretical foundations and industry implications

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Introduction

As the integration of digital technologies continues to facilitate an expanding array of services (Pember, 2021), the path to achieving net-zero emissions becomes increasingly intricate (Karpen et al., 2023; Keiningham et al., 2023; Koskela et al., 2023), given the profound impact of digitalization (Kowalkowski et al., 2022). Digital service transformation presents a double-edged sword, with the potential to bolster customer service experiences and operational efficiencies (Ostrom et al., 2021), while simultaneously amplifying the carbon footprint of the digital realm (Jing et al., 2023; Sharma and Bibhu, 2022). Surprisingly, despite often initiating digital transformations proactively (Marino-Romero et al., 2023), many firms adopt a predominantly reactive approach when navigating the transition towards net zero (Berger-Schmitz et al., 2023). Our understanding of how service firms negotiate the intricate landscape of digital transformations and innovate their business models, whilst concurrently steering toward net zero remains limited. The aim of the proposed special issue is to advance theoretical foundations and industry implications concerning business model innovation and transformation towards net zero in digital service firms. 

The pivotal role played by dynamic capabilities, and related change management practices, in the context of digital service transformation, specifically in how service firms innovate, reshape, and adapt their business models, holds paramount importance (Ellström et al., 2022; Neri et al., 2023; Warner and Wäger, 2019). However, a significant knowledge gap persists regarding the approaches available to service firms – whether to adopt a reactive, proactive, or a combined approach in response to such transformations, especially when seeking to transition towards net zero. In contemplating a transition towards net-zero emissions amidst a backdrop of turbulence and external uncertainties, service firms may resort to a reactive deployment of their dynamic capabilities to engage in transformative efforts. On the other hand, when they aim to become digitally enabled, a proactive deployment of dynamic capabilities takes center stage. This proactive approach involves the cultivation of innovative ideas and the identification of new opportunities, effectively equipping service firms to confront endogenously generated uncertainties (Maghzi et al., 2023). Crucially, rather than constraining dynamic capability deployment and associated practices to a binary choice between reactive and proactive approaches, it is imperative to recognize that service firms may embrace a more nuanced approach (Randhawa et al., 2021). This could entail the sequential adoption of both reactive and proactive approaches or other flexible configurations, thereby moving beyond a rigid adherence to a singular approach. Such flexibility is essential in navigating the intricate landscape of digital transformation and the concurrent pursuit of net zero emissions, and warrants further investigation and scholarly discourse. 

In this way, the theme of this special issue connects directly with the United Nations’ Sustainable Development Goals (SDGs). Especially, advancing theoretical foundations and industry implications that clarify business model innovation and transformation towards net zero in digital services will support achievement of SDG 7: Affordable and clean energy, and SDG 9: Industry innovation and infrastructure. 

List of Topic Areas

In light of the aforementioned complexities, this special issue aims to advance theoretical and empirical understanding regarding the approaches that service firms adopt when harnessing dynamic capabilities, and related change management practices, to transform their service business models, with the specific objective of addressing the challenges associated with achieving net-zero emissions within the context of digital service transformation. 

To achieve the desired theoretical and empirical advancements, this special issue focuses on studies conducted within service sectors where digitalization and the imperative of pursuing net zero are of paramount importance. In these service firms, the deployment of dynamic capabilities and related change management practices may exhibit a combination of reactive and/or proactive characteristics. A more nuanced approach to the deployment of dynamic capabilities and use of related change management practices in the context of digital transformation and the transition to net zero emissions opens up a range of research questions.   

• How do service firms balance between reactive and proactive approaches in their deployment of dynamic capabilities and related change management practices to effectively navigate the complexities of digital transformation and the pursuit of net zero emissions? 
• How do organizational factors influence the choice of sequential adoption of reactive and proactive approaches in their deployment of dynamic capabilities and related change management practices to innovate business models that enable digitally enabled services in net zero transition? 
• How do industry factors influence the adoption of flexible configurations for their deployment of dynamic capabilities and related change management practices in facilitating digitalization and net zero transition? 
• How does the pace and scale of digital service transformation impact the deployment of dynamic capabilities and related change management practices to address the challenges of achieving net zero emissions? 
• What are the implications of adopting a more nuanced approach to the deployment of dynamic capabilities and related change management practices on a service firm's competitive advantage and long-term sustainability in a digitalized and environmentally conscious landscape? 
• What role does strategic leadership play in shaping the culture of flexibility and adaptability in the deployment of dynamic capabilities and related change management practices within service firms, and how does it impact organizational resilience and innovation? 
• In the pursuit of net zero emissions, how do service firms effectively measure and evaluate the outcomes of different approaches when deploying their dynamic capabilities and related change management practices, especially those that are sequential or flexible in nature? 

These research questions provide a starting point for exploring the complexities and nuances of deployment of dynamic capabilities and related change management practices in the context of digital service transformation and the concurrent transition to net zero emissions. These illustrative questions are not meant to be inclusive, and researchers can address other questions to enhance our understanding of how service firms can strategically adapt to this intricate landscape. 

Submissions Information

Submissions are made using ScholarOne Manuscripts. Registration and access are available here.
Author guidelines must be strictly followed. Please see here.
Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to ““Please select the issue you are submitting to”. 
Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.

Please direct any questions to [email protected] 

Key Deadlines

Submission Deadline: 31 October 2024 

References

Berger-Schmitz, Z., George, D., Hindal, C., Perkins, R., & Travaille, M. (2023). What explains firms' net zero adoption, strategy and response? Business Strategy and the Environment, 1–19. https://doi.org/10.1002/bse.3437 
Ellström, D., Holtström, J., Berg, E., & Josefsson, C. (2022). Dynamic capabilities for digital transformation. Journal of Strategy and Management, 15(2), 272-286.  
Jing, S., Aneye, C., Kharitonova, A., & Fang, W. 2023. Essential innovation capability of producer‐service enterprises towards circular business model: Motivators and barriers. Business Strategy and the Environment, 32(7), 4548-4567. 
Karpen, I.O., Edvardsson, B., Tronvoll, B., Jaakkola, E., & Conduit, J. (2023). Circular service management: toward conceptual understanding and service research priorities for a more sustainable future. Journal of Service Management, 34(6), 50-69.  
Keiningham, T., Aksoy, L., & Malthouse, E. (2023). Sustainable Service. Journal of Service Research, 0(0). https://doi.org/10.1177/10946705231208259 
Koskela-Huotari, K., Svärd, K., Williams, H., Trischler, J., & Wikström, F. (2023). Drivers and Hinderers of (Un)Sustainable Service: A Systems View. Journal of Service Research, 0(0). https://doi.org/10.1177/10946705231176071 
Kowalkowski, C., Bigdeli, A.Z., & Baines, T. (2022). Guest editorial: the future of servitization in a digital era. Journal of Service Management, 33(1), 59-69.  
Maghzi, A., Lin, N., Pfarrer, M., Gudergan, S. & Wilden, R. (2023). Creating opportunities: Heuristic reasoning in proactive dynamic capability deployment. Academy of Management Review, in press. 
Marino-Romero, J.A., Palos-Sanchez, P.R., & Velicia-Martin, F. (2023). Improving KIBS performance using digital transformation: study based on the theory of resources and capabilities. Journal of Service Theory and Practice, 33(2), 169-197.  
Neri, A., Negri, M., Cagno, E., Kumar, V., & Garza-Reyes, J. A. (2023). What digital-enabled dynamic capabilities support the circular economy? A multiple case study approach. Business Strategy and the Environment, 32(7), 5083–5101.  
Ostrom, A. L., Field, J. M., Fotheringham, D., Subramony, M., Gustafsson, A., Lemon, K. N., Huang, M.-H., & McColl-Kennedy, J. R. (2021). Service Research Priorities: Managing and Delivering Service in Turbulent Times. Journal of Service Research, 24(3), 329-353.  
Pemer, F. (2021). Enacting Professional Service Work in Times of Digitalization and Potential Disruption. Journal of Service Research, 24(2), 249-268. 
Randhawa, K., Wilden, R. & Gudergan, S. (2021). How to innovate toward an ambidextrous business model? The role of dynamic capabilities and market orientation. Journal of Business Research, 130, 618-634. 
Sharma, P., & Bibhu, D. (2022). The Digital Carbon Footprint: Threat to an Environmentally Sustainable Future. International Journal of Computer Science and Information Technology, 14. 19-29.  
Warner, K., & Wäger, M. (2019). Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long Range Planning, 52(3), 326-349.