Designing Sustainable Business Models with Emerging Technologies: Navigating the Ontological Reversal and Network Effects to Balance Externalities

As organizations seek to address urgent environmental challenges, emerging technologies (ET) such as artificial intelligence, Internet of Things, and blockchain offer new opportunities to enhance sustainability. Two key phenomena—network effects and ontological reversal—are increasingly shaping how organizations leverage ET in business model design to drive environmental impact. This study examines how digital organizations can incorporate mechanisms enabled by ET affordances, particularly those linked to ontological reversal, to harness network effects for sustainability. In doing so, we respond to calls for research on how ET not only support but actively transform physical reality, fostering collaborative environmental value creation in digital ecosystems. Through an in-depth literature review and an analysis of industry cases, we develop both a typology of network effects and a theoretical model for sustainable business model design. Our typology identifies three value-creation mechanisms of network effects—participation, data mediation, and learning moderation—which are integrated with three manifestations of ontological reversal—data infusion, virtualization, and dematerialization—that clarify how organizations generate environmental value with ET. Our theoretical model provides a structured approach for organizations to strategically align digital business models with sustainability goals.