Abstract
Keywords
Introduction
Conceptual background and analytical framework
Demand response in Finland
Data and methods
Results
Discussion
Conclusions
Declaration of Competing Interest
Acknowledgements
Appendix A. Reserve marketplaces and DR participation in Finland (Fingrid, 2020b, 2020c)
Appendix B. First stage coding scheme
Appendix C. Details of the demand response companies studied
References
ABSTRACT
Demand response (DR) is an innovation emerging at the intersection of the energy and information and communications technology sectors. This paper aims to investigate the drivers of—and differences in—business model innovation (BMI) behaviours of firms operating in these two interacting industries. Results from 22 semi-structured interviews with representatives of Finnish DR companies show that external drivers of BMI include regulation, competition, and the demise of the telecom industry following the fall of Nokia. Whereas technology start-ups and companies from adjacent industries are motivated by entrepreneurial opportunities, incumbent energy companies are driven by the threat of losing their existing customers and need to increase efficiency. The BMI behaviours observed do not fall neatly into the often-used dichotomous categories of niche/new entrant and regime/incumbent, as firms show behaviours from both extremes. To overcome this binary thinking, we propose a morphological box model that represents the extreme states of firm BMI while allowing for flexibility.
Introduction
In response to concerns over the perceived lack of agency in sustainability transitions research, the topic of actors’ roles and strategies in socio-technical change has been gaining increasing attention (de Haan and Rotmans, 2018; Farla et al., 2012; Fischer and Newig, 2016; Ruggiero et al., 2021; Wittmayer et al., 2016). Actors can adopt different strategies at different levels of structuration—i. e. at regime or niche level—and can pursue single strategies or a constellation of strategies that change over time (Wittmayer et al., 2016). This can range from those advocating a particular niche, those not favouring a specific niche but making space for change at the regime level, and those actively opposing change (Kivimaa et al., 2019). Firm strategies have generally tended to be conceptualised along two, rather simplified, lines: incumbents and front-runners. Incumbent actors may include firms that maintain the status quo through the power they possess for the purposes of resisting change (Geels, 2014b; Johnstone et al., 2017), thus contributing to the stability of regime structures (Geels, 2014b). In contrast, ‘niche actors’—often considered to include entrepreneurs, start-ups, and spin-offs (Wittmayer et al., 2016)—are seen as front-runners, dedicated ‘outsiders or fringe actors’ in small networks who pioneer path-breaking innovations that challenge incumbent regime structures (Geels and Schot, 2007: 400). However, reality is much more complex; and we should not expect all incumbent firms in an industry to follow similar strategies.