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Business model innovation (BMI) is a well-established approach to adapt structures, activities, and services to dynamic environments. Increasing digitization and changing stakeholder demands put pressure on public organizations to adjust their business models (BMs). However, public BMI research is fragmented and lacks conceptual sophistication. Drawing on an analysis of BMI studies and supplementary public management literature, our study develops an integrative framework representing the underlying public value-oriented BM structure that can be innovated through democratically driven BMI processes. Our framework specifies public BMI and serves as a guide for research and practice by providing implications for improving public value.

Business model innovation in the public sector: an integrative framework