How sharing-platform SMEs innovate their business models in developing economies: A process and ecosystem perspective

Abstract

Sharing-platform small and medium-sized enterprises (SPSMEs) are a critical player in the sharing economy. However, how they innovate their business models in the developing economies setting is still unclear. This is because most research focuses on large sharing-platform firms in developed economies, often treating their business models as relatively static configurations, while explaining their innovation mainly from the firm's internal perspective. Accordingly, we ask: how SPSMEs, that operate in developing economies, adapt and reconfigure their business models over time while responding to challenging external conditions (including weak institutions, regulatory uncertainty, low digital awareness, fragmented provider networks, and limited ecosystem support). Drawing on multiple-case studies comprising seven SPSMEs in Jordan and the UAE, we develop a 3Ts process model (Triggering, Theming and Transforming) which explains how SPSMEs recognise opportunities, define value logics, and reconfigure their digital activity systems over time. We also show that the SPSMEs business ecosystem consists of two networks (the Digital Activity Network and the Digital Business Network), whose actors enable, constrain and redirect the business model innovation process. The study contributes to research on business model innovation (BMI) and the sharing economy literature by showing that BMI in SPSMEs is not a one-off design outcome. Rather, it is an evolving and context-sensitive process shaped by firm-level adaptation and business ecosystem conditions, particularly in developing economies.