Business Model Innovation and Performance of Public Universities: Evidence from Kenya

Abstract

Public universities in Kenya are under increasing financial strain due to reduced government funding and rising expectations for academic and institutional performance. This study explored the role of business model innovation in enhancing university performance, focusing on three key areas: value creation innovation, value proposition innovation, and revenue stream innovation. Data from senior administrators at 32 public universities were analysed using descriptive statistics, correlation, and regression techniques. The findings showed that revenue stream innovation had the most significant positive impact on performance (β = 0.449, p = 0.004), while value proposition innovation had a modest but insignificant effect (β = 0.138, p = 0.458). Value creation innovation showed a negative influence (β = -0.062, p = 0.638). The study concluded that universities should prioritise revenue diversification and external funding to improve financial sustainability and competitiveness while continuing to refine academic and strategic value.