Business Model Innovation Factors of Small and Medium-Sized Enterprises in Bolivia

Abstract

This paper aims to explore how four Bolivian small and medium-sized enterprises’ business has overcome the gaps in reliance on traditional small and medium-sized enterprises’ business models, i.e., to extract and sell raw unrefined natural resources in a local area, and instead make productive use of innovation inputs (technology, higher-educated people) by innovating their business models. We were particularly interested in how the small and medium-sized enterprises could manage to develop their business models in relation to the socio-cultural, economic, and technological contexts in a lower middle-income country such as Bolivia. We employ an exploratory multiple case study. The study’s results show that the four selected small and medium-sized enterprises’ business model innovation processes followed two different business model innovation patterns, a technology-driven pattern and market-driven pattern shaped by the macro-level factors of availability of natural resources, the informally organized economy, regulations, and access to higher education resources. The paper ends with presenting the managerial, policy, and theoretical implications of the study.