SECCIÓN SEXTA Las liquidaciones Tributarias

Eco-innovation business models are business models designed to deliver value to customers by providing eco-innovative products or services. The proposed conceptual

framework should shed light on how the logic of business model design can incorporate sustainability and be geared towards radical eco-innovations. In order to do so, the conceptual framework goes beyond analysing the business models of individual companies and incorporates the perspective of the value chain. The approach also includes the notion of wider impacts and framework conditions, such as the relevant regulations and access to finance, so as to better understand what drives companies to, and what stops companies from, considering radical eco-innovation as a viable alternative value proposition. Figure 6 proposes an extended business model canvass incorporating the notion of wider impacts as well as different types of value, including notable economic, societal and environmental value. The following sections outline individual components introduced into the extended model, which helps to set the framework to analyse eco-innovation and its underlying business model.

Figure 6 The Extended Business Model Concept

Source: Technopolis Group based on Osterwalder & Pigneur (2010); perspectives of value creation along the value chain and wider impacts added by Technopolis Group

3.2.1

The focus in the analysis of business models is invariably on value creation. The business models’ literature focuses, in particular, on the value proposed to the customer or the value propositions and the value captured by the company. The approach in this study adds to these the implications of different business models on value creation upstream in the value chain of partners and suppliers. This exercise enables the potential impact of various business model approaches to be identified and indicated at specific phases of the value chain.

There are different types of value considered in this approach: economic such as monetary cost and revenue streams, social and cultural including human and social capital, symbolic values related to social status and wellbeing and knowledge and learning value that also covers market and strategic intelligence, as well as environmental benefits like reduced impacts or positive impacts on the environment.

There are at least two ways in which companies can embed eco-innovative considerations into value propositions. These are, on the one hand, cost reduction and, on the other, new value creation.10 _{The two strategies overlap in practice, whereas the}

degree to which either approach dominates may differ within individual companies, such as those with multiple business models, and across value chains.

Cost reduction models focus on improving both the economic and environmental performance of existing company processes and products. These approaches have clear economic and potential environmental benefits, as companies improve their productivity through “more from less”, while reducing the use of energy and natural resources, as well as limiting their CO2 emissions. Eco-efficiency innovations are most often related to changes in company activities, such as applying lean manufacturing and other material efficiency approaches, but they may also involve reconfiguring value chains and relationships with suppliers in order to improve efficiency. The model may imply disruptive changes in efficiency, but it does not necessarily change the value propositions of companies. The main drivers for efficiency eco-innovations are internal cost reductions, as well as the improved post-sales energy performance like energy efficient home appliances. Efficient business models can contribute to larger transformative innovations but, on their own, they are less likely to inspire a radical change.

New value creation approaches, on the other hand, are based on fundamental changes in the value propositions of the company that lead to the development of an entirely different set of products and/or services being offered to customers. Such approaches have demonstrable potential for substantial economic, social and environmental benefits. They go beyond efficiency logic and move towards radical alternatives that deliver value with minimum environmental impact or “better from less”. Clearly, such rigorously revisited business models offer fertile ground for nurturing more radical innovations. Examples of such business model innovations include shifts from product toward product-service systems linked with substantial improvements in product durability or delivering products that make other existing products redundant, such as self-cleaning paints that make cleaning detergents obsolete.

New value creation approaches are typically risky and, as such, may lead to adverse economic effects in the short term, like the example mentioned above, and make some existing products and services obsolete. Ultimately, however, such radical reconfigurations are expected to bring about wider sustainability gains for society and the economy in the medium to long-term.

3.2.2

Customers are always at the heart of the business models. The viability of eco- innovative services and products depends ultimately on the final demand. In the context of eco-innovation, two groups of customers can be differentiated.

The first group has an explicit preference for purchasing eco-innovative goods or services due to their values or their internal regulations. This group may include both public and private sector organisations that are notably large procurers, as well as the “green” segment of consumers. This group is also the most relevant for promoting value-adding eco-innovations, which go beyond cost saving.

The second group is driven mostly by the financial cost. This group recognises the possible cost savings that eco-innovation could generate. These customers are mainly looking for improvements in efficiency and are less inclined to take risks or promote more radical solutions.

10 _{The distinction between cost reduction and value creation is inspired by the Blue Ocean Strategy of Kim}

and Mauborgne (2005). The efficiency and sufficiency logic of business models may be also related to the difference between single and double-loop learning in organisations (Argyris and Schon 1996)

3.2.3

Innovation and the production process in an aspect that includes three key components: key activities; key partners; and key resources. The key activities’ and the key partners’ components include the innovation process from ideas generation to the production of new goods or services. Embedding the notion of environmental value into the value propositions of a company has a direct bearing on the nature of its activities, as well as on the partners, including innovation partners and suppliers of resources with which the company engages.

3.2.4

Companies do not act in isolation and their decisions on whether to pursue radical eco-innovation depend on a number of determinants and framework conditions. Osterwaleder and Pigneur (2010) point to four groups of drivers and constraints including key trends, which involve foresight, market forces, which involve market analysis, industry forces, which involve competitive analysis, and macro-economic forces. The conceptual framework for the current study adds the perspectives of the innovation system and the social values of consumers, as both are considered to crucial dimensions in the analysis of a wider framework for eco-innovation. Framework conditions are clearly relevant to eco-innovation and changes in these conditions may require companies to rethink their business models. Regulatory pressures and market-based instruments, for example, have a direct impact on prices and markets and, as such, can directly influence companies, their business models and their propensity to eco-innovate.