In the recent years, scholars have devoted growing attention to innovation at the business model level. However, studies focusing on the relationships among capabilities, business model innovation and a firm’s performance are rare.

According to David Teece (2010), the ‘business model’ defines the way the company creates and delivers value to customers, and then captures a portion of this value to make profit and grow. Organizations that pursue this type of innovation develop novel value creation architectures and original revenue models beyond new products or new services.

In this paper, the researchers adopt broader measures of internal and external knowledge, which include codified intangibles such as patents and copyrights, and examine the effects the combinations and interactions have on sales growth based on a dataset of 310 firms from four European countries. Using the broader measure of knowledge, they find support for the curvilinear relationship reported in studies using research and development-intensity as a proxy.

However, they also find that firms with low levels of internal knowledge benefit most from an ‘optimal’ investment in externally generated knowledge, but the influence on sales growth is very sensitive to the degree of external knowledge acquired. By contrast, knowledge-intensive firms are relatively freer in defining their knowledge sourcing strategy.

The paper provides a discussion of the implications for exploiting knowledge and complementary assets in BMI.

Read the full paper:

Creating and capturing value from external knowledge:
the moderating role of knowledge intensity, Stefano Denicolai, Matias Ramirez and Joe Tidd, R&D Management Special Issue: Business Model Innovation, 2014

Recommended by David Probert, post by R&D Today admin