In Search of Viable Business Models for Development: Sustainable Energy in Developing Countries

Purpose – Although the crucial role of business, and of business-based approaches, in development is increasingly emphasised by academics and practitioners, we lack insight into the ‘whether and how’ of viable business models, in environmental, social and economical terms. This article analyses private-sector involvement in development, including a business perspective of firm-level factors, taking the case of sustainable energy in developing countries. Design/methodology/approach – In the framework of the international business and development debate, we examine the ‘state of the art’ on sustainable energy and business involvement, and present our own research on illustrative cases from local companies involved in renewable, off-grid rural electrification. Implications are discussed, viewed from the broader perspective of business models. Findings – Existing studies on sustainable energy take macro-economic and/or policy-oriented approaches, containing specific case studies of rural electrification and/or recommended financing/delivery models. We categorize them on two dimensions (levels of subsidies and public/private involvement) and conclude that market-based models operating without subsidies do hardly exist in theory – and also not in practice, as our study shows that companies can at best have part of their portfolio non-subsidized based on customer segmentation or require socially-oriented investors/funders. Research limitations/applications – This exploratory study can be a starting point for further in-depth analyses. Practical implications – The article outlines challenges faced by companies/entrepreneurs when aiming for viable business models, and provides insights to policy-makers who want to further the role of business in sustainable (energy) development. Societal implications – Sustainable energy and development are crucial and interlinked issues highly relevant to global society, as exemplified by the UN year of Sustainable Energy for All and Rio 20. Originality/value – The article contributes new dimensions and perspectives that have been left unexplored, and that are crucial for reducing poverty and stimulating sustainable (energy) development

Smart city pilot projects: exploring the dimensions and conditions of scaling up

In many cities, pilot projects are set up to test new technologies that help to address urban sustainability issues, improve the effectiveness of urban services, and enhance the quality of life of citizens. These projects, often labelled as “smart city” projects, are typically supported by municipalities, funded by subsidies, and run in partnerships. Many of the projects fade out after the pilot stage, and fail to generate scalable solutions that contribute to sustainable urban development. The lack of scaling is widely perceived as a major problem. In this paper, we analyze processes of upscaling, focusing on smart city pilot projects in which several partners—with different missions, agendas, and incentives—join up. We start with a literature review, in which we identify three types of upscaling: roll-out, expansion, and replication, each with its own dynamics and degree of context sensitivity. The typology is further specified in relation to several conditions and requirements that can impact upscaling processes, and illustrated by a descriptive analysis of three smart city pilot projects developed in Amsterdam. The paper ends with conclusions and recommendations on pilot projects and partnership governance, and adds new perspectives on the debate regarding upscaling

Balancing exploration and exploitation in sustainable urban innovation: an ambidexterity perspective toward smart cities

The potential of technological innovation to address urban sustainability has been widely acknowledged over the last decade. Across cities globally, local governments have engaged in partnership arrangements with the private sector to initiate pilot projects for urban innovation, typically co-funded by innovation subsidies. A recurring challenge however is how to scale up successful projects and generate more impact. Drawing on the business and management literature, we introduce the concept of organizational ambidexterity to provide a novel theoretical perspective on sustainable urban innovations. We examine how to align exploration (i.e., test and experiment with digital technologies, products, platforms, and services) with exploitation (i.e., reaping the financial benefits from digital technologies by bringing products, platforms, and services to the market), rooted in the literature on smart cities. We conclude that the concept of ambidexterity, as elaborated in the business and management literature and practiced by firms, can be translated to the city policy domain, provided that upscaling or exploitation in a smart city context also includes the translation of insights from urban experiments, successful or not, into new routines, regulations, protocols, and stakeholder/citizen engagement methods

Title Regionalization strategies of European Union electric utilities REGIONALIZATION STRATEGIES OF EU ELECTRIC UTILITIES

ABSTRACT As part of the debate about globalization and regionalization, this paper adds a perspective that has so far remained underexposed, that of (formerly state-owned) firms in (previously) regulated industries, in order to better understand the (changing) role of the home country/region in internationalization processes in the context of regional market liberalization. This paper explores the global/regional orientations of the seven major EU electric utilities from five different home countries, which are active in both fossil-fuel and renewable energy generation. Using a multiple case study design, we collected internationalization/regionalization data from firms' annual reports for the years 2000, 2005 and 2010, supplemented with an analysis of secondary sources. Firms show a clear pattern of increasing internationalization away from the home-country market, coupled with a home-region orientation for traditional generation activities, which differs from the more international, wider and often multiple regional presences in the newer renewables business for some firms. Institutional factors are argued to play an important role in both processes. Findings suggest distinct regionalization patterns for business units and different FSAs, with strategic opportunities related to asset positions. Home-country effects may be linked to a heterogeneous firm-specific home-region liability of foreignness, resulting in incomplete home-region internationalization in most cases

Regionalization Strategies of European Union Electric Utilities

As part of the debate about globalization and regionalization, this paper adds a perspective that has so far remained underexposed, that of (formerly state‐owned) firms in (previously) regulated industries, in order to better understand the (changing) role of the home country/region in internationalization processes in the context of regional market liberalization. We explore the global/regional orientations of the seven major European Union electric utilities from five different home countries, which are active in both fossil‐fuel and renewable energy generation. Using a multiple case study design, we collected internationalization/regionalization data from firms' annual reports for the years 2000, 2005 and 2010, supplemented with an analysis of secondary sources. Firms show a clear pattern of increasing internationalization away from the home‐country market, coupled with a home‐region orientation for traditional generation activities which differs from the more international, wider and often multiple regional presences in the newer renewables business for some firms. Institutional factors are argued to play an important role in both processes. Findings suggest distinct regionalization patterns for business units and different firm‐specific advantages, with strategic opportunities related to asset positions. Home‐country effects may be linked to a heterogeneous firm‐specific home‐region liability of foreignness, resulting in incomplete home‐region internationalization in most cases

What Doughnut Economics means for business: creating enterprises that are regenerative and distributive by design

The 21st century’s rapidly compounding crises – from climate and ecological breakdown to extreme social inequities of power and opportunity – make it irrefutably clear that the global economic system must be transformed if humanity and the rest of life on Earth are to thrive. Doughnut Economics provides an increasingly recognised compass for such a thriving future, and is focused on meeting the needs of all people within the means of the living planet, by creating economies that are regenerative and distributive by design. What are the implications for the role and transformation of business, if it is to be part of this future? This paper explores how the deep design of business – through a company’s Purpose, Networks, Governance, Ownership, and Finance – powerfully shapes its strategic decisions and operational impacts, and ultimately determines whether or not businesses can transform to become part of a regenerative and distributive future. By diving into five layers of deep design, this paper reveals both design blockages that prevent transformative action, and design innovations that can unlock its possibility. In addition, this paper recognises that industry-level and system-wide transformations are crucial for turning the inheritance of a degenerative and divisive economic system into the beginnings of a regenerative and distributive one

Organising smart city projects: lessons from Amsterdam

We studied 12 smart city projects in Amsterdam, and –among other things- analysed their upscaling potential and dynamics. Here are some of our findings: First, upscaling comes in various forms: rollout, expansion and replication. In roll-out, a technology or solution that was successfully tested and developed in the pilot project is commercialised/brought to the market (market roll-out), widely applied in an organisation (organisational roll-out), or rolled out across the city (city roll-out). Possibilities for rollout largely emerge from living-lab projects (such as Climate street and WeGo), where companies can test beta versions of new products/solutions. Expansion is the second type of upscaling. Here, the smart city pilot project is expanded by a) adding partners, b) extending the geographical area covered by the solution, or c) adding functionality. This type of upscaling applies to platform projects, for example smart cards for tourists, where the value of the solution grows with the number of participating organisations. Replication is the third and most problematic type of upscaling. Here, the solution that was developed in the pilot project is replicated elsewhere (another organisation, another part of the city, or another city). Replication can be done by the original pilot partnership but also by others, and the replication can be exact or by proxy. We found that the replication potential of projects is often limited because the project’s success is highly context-sensitive. Replication can also be complex because new contexts might often require the establishment of new partnerships. Possibilities for replication exist, though, at the level of working methods, specific technologies or tools, but variations among contexts should be taken into consideration. Second, upscaling should be considered from the start of the pilot project and not solely at the end. Ask the following questions: What kind of upscaling is envisioned? What parts of the project will have potential for upscaling, and what partners do we need to scale up the project as desired? Third, the scale-up stage is quite different from the pilot stage: it requires different people, competencies, organisational setups and funding mechanisms. Thus, pilot project must be well connected to the parent organisations, else it becomes a “sandbox” that will stay a sandbox. Finally, “scaling” is not a holy grail. There is nothing wrong when pilot projects fail, as long as the lessons are lessons learned for new projects, and shared with others. Cities should do more to facilitate learning between their smart city projects, to learn and innovate faster