Business model innovation in sustainable entrepreneurship: co-evolutionary evidence from small accommodation firms

Purpose – This paper aims to better understand how business model innovation (BMI) occurs in the context of sustainable entrepreneurship, emphasizing the dialectical nature of entrepreneurial relationships. To do so, key interdependencies and reciprocal influences between internal/firm-specific and external/environmental factors underlying BMI for sustainability are analysed through co-evolutionary lenses. Design/methodology/approach – A co-evolutionary framework is developed and applied to a longitudinal business model (BM) analysis of 15 Italian widespread hotels, which creatively use historic villages at risk of abandonment to establish their hotels. Findings – Largely influenced by the interplay between internal and external factors, BMI of widespread hotels occurs through multilevel co-adaptations, which are recognised as virtuous by all stakeholders involved. Effective variations of the BM value elements are selected resulting in circular economy practices, which are retained for successful BMI, radical (first) and incremental (thereafter). Knowledge of specific local and multi-local conditions, time awareness and a future-oriented temporal perspective, by both entrepreneurs and policymakers, favour this dynamic. Practical implications – Developing targeted policies and practices based on increased organisational knowledge supported by indicators can help in selecting and retaining successful variations of BMs appropriately in/with time with positive effects on firms’ performance and sustainable development. Originality/value – This study provides a novel co-evolutionary framework that explicitly links sustainable entrepreneurship and BM concepts in the accommodation sector. It further proposes a dynamic and holistic explanation of BMI for sustainability from which the crucial roles of the time-knowledge binomial and circular practices emerge.