Business Model Innovation in Small Firms: A Systematic Review

Abstract

Small firms are often urged to reinvent their business models, yet the evidence on how they actually do so is scattered across disciplines. This review synthesises 86 empirical studies published over two decades and organises them around three questions: what triggers a change of model, which resources make it possible, and what happens to performance afterwards. We find that most changes begin with a customer problem rather than a technology, and that owner-managers rely heavily on informal networks for ideas and early testing. Firms that changed one element at a time, and measured the result, outperformed those that attempted a complete redesign. Evidence on survival after failed experiments remains thin. We close with a research agenda on learning from small-scale trials and on the role of local ecosystems in supporting model change, with attention to firms outside high-income economies where evidence is scarcest.