Digital Entrepreneurship and Business Innovation: A Simplified Model to Understand On-Demand Service Innovation

Abstract

As digital technologies continue to accelerate the complexity and diversity of customer demands to an unprecedented degree, companies small and large are pursuing business innovation strategies to cope with the challenge. This empirical study focuses on understanding the factors that contribute to business improvement, and specifically on-demand service innovation. The study results show that digital entrepreneurship, a precursor of digital transformation, plays a key role in on-demand service innovation through variables such as entrepreneurial orientation and digital orientation. While a larger number of complex independent and control variables may also impact on-demand service innovation, herein we focus on a simplified model. The goal of this study is to understand if digital entrepreneurship impacts business innovation through on-demand service innovation. In the analysis of the control variables, we find that the existence of a person in charge of the digital transformation (a digital entrepreneur or a chief digital officer) influences service innovation and ultimately, and indirectly through annual sales growth, it influences firm performance.