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When increasing productivity, efficiency and economies of scale have become
very important in the agri-sector, small- and medium-sized agri-companies engaged
in business model innovation focusing on sustainability must take a more strategic
and innovative perspective. A strategy for these companies can be to expand their
business not through traditional growth, but rather by diversifying activities and
focusing on cooperation. Research have shown that small- and medium-sized agricompanies that have been able to overcome the challenges of the agri-sector have
developed sustainable business models based on a diversified approach (Ulvenblad
et al. 2016), a network approach (Lawson et al. 2008) or a value-net approach
(Kähkönen 2012). These sustainable business models often generate value not only
for customers but also for other stakeholders, the community and the environment
(Barnett and Salomon 2012; Kiron et al. 2013; Schaltegger et al. 2016).
Previous research regarding agri-companies have, in general terms, focused on
production and cost-efficiency (Alston 2010, 2018). Further, research regarding
business models has often addressed industries other than the agri-sector (Tell et al.
2016) such as media, information technology and biotechnology industries
(Johnson 2010).
Schaltegger et al. (2016) state that “The business model perspective is particularly interesting in the context of sustainability because it highlights the value creation logic of an organization and its effects and potentially allows (and calls) for
new governance forms such as cooperatives, public private partnerships, or social
businesses, thus helping transcend narrow for-profit and profit-maximizing models”
(p.5). This is line with Boons et al. (2013), who conclude that business models are
useful for the creation and study of sustainable innovation. Lambert and Davidson
(2013) and Zott et al. (2011) have shown that a sustainable business model is a useful tool when studying how a single company or an entire value network achieves
sustainability in terms of environmental, social as well as economic value. However,
the existing research on sustainable business models in the agri-sector has often
been limited to and addresses developing rather than developed countries (e.g. the
United States and European countries) (Beuchelt and Zeller 2012). Even though a
structured literature review reveals an increasing number of research articles that
examine sustainable business model innovation in the agri-sector, there is a need for
more research on this topic (Tell et al. 2016).
To summarize, businesses in the agri-sector face difficult challenges – but have
also unique opportunities to develop sustainability-oriented innovation and sustainable business models which create value in other ways than low-cost production.
However, even if the needs at the global and firm levels are large, research regarding
the development of sustainable business models within the agri-sector is limited.
This is a significant issue, since profitable agri-companies, which develop sustainable business models and advance along the agri-value chain, need to become part
of the solution at a moment in history when the world needs more food, which is to
be produced and distributed in sustainable ways.
In order to reduce the research gap identified, the aim of this chapter is to illustrate and analyse how Swedish agri-companies strive to develop sustainable business models to innovate their business activities. I will illustrate, map, categorize
5 Development of Sustainable Business Models for Innovation in the Swedish…
When increasing productivity, efficiency and economies of scale have become
very important in the agri-sector, small- and medium-sized agri-companies engaged
in business model innovation focusing on sustainability must take a more strategic
and innovative perspective. A strategy for these companies can be to expand their
business not through traditional growth, but rather by diversifying activities and
focusing on cooperation. Research have shown that small- and medium-sized agricompanies that have been able to overcome the challenges of the agri-sector have
developed sustainable business models based on a diversified approach (Ulvenblad
et al. 2016), a network approach (Lawson et al. 2008) or a value-net approach
(Kähkönen 2012). These sustainable business models often generate value not only
for customers but also for other stakeholders, the community and the environment
(Barnett and Salomon 2012; Kiron et al. 2013; Schaltegger et al. 2016).
Previous research regarding agri-companies have, in general terms, focused on
production and cost-efficiency (Alston 2010, 2018). Further, research regarding
business models has often addressed industries other than the agri-sector (Tell et al.
2016) such as media, information technology and biotechnology industries
(Johnson 2010).
Schaltegger et al. (2016) state that “The business model perspective is particularly interesting in the context of sustainability because it highlights the value creation logic of an organization and its effects and potentially allows (and calls) for
new governance forms such as cooperatives, public private partnerships, or social
businesses, thus helping transcend narrow for-profit and profit-maximizing models”
(p.5). This is line with Boons et al. (2013), who conclude that business models are
useful for the creation and study of sustainable innovation. Lambert and Davidson
(2013) and Zott et al. (2011) have shown that a sustainable business model is a useful tool when studying how a single company or an entire value network achieves
sustainability in terms of environmental, social as well as economic value. However,
the existing research on sustainable business models in the agri-sector has often
been limited to and addresses developing rather than developed countries (e.g. the
United States and European countries) (Beuchelt and Zeller 2012). Even though a
structured literature review reveals an increasing number of research articles that
examine sustainable business model innovation in the agri-sector, there is a need for
more research on this topic (Tell et al. 2016).
To summarize, businesses in the agri-sector face difficult challenges – but have
also unique opportunities to develop sustainability-oriented innovation and sustainable business models which create value in other ways than low-cost production.
However, even if the needs at the global and firm levels are large, research regarding
the development of sustainable business models within the agri-sector is limited.
This is a significant issue, since profitable agri-companies, which develop sustainable business models and advance along the agri-value chain, need to become part
of the solution at a moment in history when the world needs more food, which is to
be produced and distributed in sustainable ways.
In order to reduce the research gap identified, the aim of this chapter is to illustrate and analyse how Swedish agri-companies strive to develop sustainable business models to innovate their business activities. I will illustrate, map, categorize
5 Development of Sustainable Business Models for Innovation in the Swedish…