Sustainable business model innovation in rural entrepreneurial ecosystems: a conceptual framework and research agenda

Sustainable business model innovation (SBMI) is particularly important in rural economies, yet SBMI research has largely ignored rural contexts and lacked a holistic treatment of drivers. Rural entrepreneurs face heightened vulnerability due to their reliance on natural amenities sensitive to disruption, and their limited access to resources, networks, and institutional support. SBMI provides a critical pathway for enhancing the economic and socio-ecological resilience of firms and local communities, enabling diversification while integrating sustainability into business strategies. In rural contexts, SBMI likely unfolds differently compared to better-studied urban settings, and enabling mechanisms are underexplored. To advance the field, we develop a holistic conceptual framework of SBMI that is salient to these oft-ignored rural contexts and offer propositions on how these mechanisms may operate to drive rural SBMI. We incorporate four interrelated factors—entrepreneurial networks (ENs), rootedness in place (RIP), dynamic capabilities (DCs), and sustainability orientation (SO)—that together shape how rural entrepreneurial organizations adapt practices to environmental and market shifts and integrate sustainability into their business models. By emphasizing the interplay between rural ventures, their networks, and their embeddedness within rural places, the framework underscores the centrality of place and entrepreneurial ecosystems in fostering rural SBMI. It offers theoretical and practical insights for designing interventions that strengthen resilience, promote sustainability, and support the long-term vitality of rural entrepreneurial ecosystems. What drives rural entrepreneurs to innovate their business models to be more sustainable, incorporating people and the planet with profitability? Integrating academic literature, our paper develops a concept where sustainable innovation of business models—the recipes for the business itself—is driven by the capabilities of the rural firm to adapt to new conditions, the firm’s views on sustainability principles, and the connections the firm has to its rural place due to local culture, resources, and networks. Rural entrepreneurs are deeply rooted within their local contexts and often utilize unique natural and social resources to build profitable businesses, making their ability to adapt practices for greater sustainability critical. Based on our new conceptual framework, we chart a course for future research through quantitative and qualitative methods to better understand what drives rural entrepreneurs’ ability to innovate for more sustainable business practices.