Industrial Dynamics and Sustainable Business Models:

Reflections on Covid-19

Emrah Karakaya

Assistant professor, KTH Royal Institute of Technology

2020/6/4

Epictetus, circa 50 – 135 BC

It's not what happens to you, but how you respond to it that matters.

How to respond Covid-19?

Time

Structuration

Markets, user preferences

Industry

Technology

Culture

Science

Niche

Innovations

Sociotechnical

landscape

Existing

Sociotechnical

regimesPolicy

Established systems where incumbent

business models operate

Broader political,

economic and demographic

tendencies

Micro-level formations

where new business models

experimented

A multi-level perspective on industrial change

Structuration

Markets, user preferences

Industry

Technology

Culture

Science

Niche

Innovations

Sociotechnical

landscape

Existing

Sociotechnical

regimesPolicy

Markets, user preferences

Industry

Technology

Culture

Science

Policy

Window of opportunity

Covid 19: A landscape shock with a window of oppurtunity?

Time

(see Geels et al 2017, and Rosenbloom & Markard, 2020)

Some reflections

1) Landscape changes such as Covid-19 may create both challenges and windows of opportunities

- In favor of ‘sustainable’ or ‘unsustainable’ business models?

[…] the crisis has amplified

voices demanding that

supply chains be

repatriated to Europe,

which would be easier if

states could pay more subsidies

May 28th 2020 edition

2) ‘Sustainable business models’ are framed and re-framed on a continuous basis

- ‘sustainability’ as a wicked problem

Did I really save carbons? In comparison to what? Had not I taken the e-scooter, would not I have just walked instead?

(see further Susur and Karakaya, 2020)

For instance, think aboute-scooters …

3) Explorative project networks may be key to navigate sustainability journeys

(Engwall, Kaulio, Karakaya, Miterev and Berlin, 2020)

We have studied three case studies (2016-2018) of pre-commercial projects of emerging technologies in the sectors of • steel production, • long haulage, and • public transports,

We show how engaging in project networks can be a strategy for incumbents to explore possibilities and to position themselves when anticipating a potential transition.

4) There is no ‘one fits all’ business strategy

- Which strategy do you have?

Defenders:• Continually defend what you are good at• Prevent competitors to enter your market• Ignore developments in niches/landscapes

Prospectors:• Continually explore new niches• Innovators and change makers• Respond to tomorrow’s world

Analyzers:• Dual business/technology cores• Follow into niches after first movers• Twin characteristics

Reactors:• Reactive rather than proactive• Responding inappropriately • In mood of panic

(see further, Chizaryfard & Karakaya 2020 and Miles, Snow, Meyer and Coleman, 1978)

So what?

I started with …

It's not what happens to you, but how you respond to it that matters

I may conclude with …

• Challenges may turn into opportunities• ‘Sustainability’ is a journey with no final destination• Inter-organizational projects can help• Respond ‘proactively’ and ‘reflexively’.

References

• Chizaryfard A., & Karakaya E (2020). ‘Remaining grounded’ in sustainability transitions: A strategy for incumbents in emerging upstreamvalue chains- International Sustainability Transitions Conference, Austria

• Geels, F. W., Sovacool, B. K., Schwanen, T., & Sorrell, S. (2017). Sociotechnical transitions for deep decarbonization. Science, 357(6357), 1242-1244.

• Engwall, M., Kaulio, M. A., Karakaya, E., Miterev, M., & Berlin, D. (2020, 2018). Explorative project networks: Means for business model innovation to navigate sustainability transitions? European Group of Organizational Studies, EGOS Conference, 2020, Germany

• Rosenbloom, D., & Markard, J. (2020). A COVID-19 recovery for climate. Science Reports.

• Susur, E. & Karakaya, E. (2020, 2019). A critical review of ‘sustainability’ assumption of the transitions literature. Academy of Management Conference, 2020, Canada

• Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman Jr, H. J. (1978). Organizational strategy, structure, and process. Academy of management review, 3(3), 546-562.

Emrah Karakaya

Assistant Professor of Industrial Dynamics and Sustainable Business Models

Department of Industrial Economics and Management

KTH Royal Institute of Technology

E-mail: emrah.karakaya@indek.kth.se

Web page: https://www.kth.se/profile/emrahka