Sustainable innovation practices and their relationship with the performance of industrial companies.
| Autor | Kneipp, Jordana Marques |
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Introduction
The patterns of production and consumption have changed substantially in the last decades, leading to transformations in society and in the environment, and creating demands and constraints for companies, so that competitiveness is increasingly related to the adoption of innovation management that includes sustainability.
Hence, companies have realized the importance of adopting sustainable innovation practices in order to minimize negative social and environmental impacts that result from their activities and, consequently, achieve superior corporate performance. Legislation and the society itself are demanding from organizations that innovation in products, services, processes and business models be accompanied by the responsibility for sustainable development.
Dyck and Silvestre (2018) observe that there is an increasing awareness of society to find solutions for dealing with socio-environmental crises through the adoption of more sustainable lifestyles. A key factor for this confrontation is to implement innovations that promote sustainable development.
Sustainable innovation is the creation of something new that improves performance in the three dimensions of sustainable development: social, environmental and economic. Such improvements are not limited to technological changes, and may relate to changes in processes, operational practices, business models, thinking and business systems (Szekely & Strebel, 2013).
According to Adams, Jeanrenaud, Bessant, Denyer and Overy (2016), sustainability-oriented innovation relates to changing philosophy and organizational values, as well as products, processes or practices, in order to attain the specific purpose of creating and realizing social and environmental value, beyond economic returns.
From the above mentioned information, we can see that sustainable innovation refers to a company's strategic and systematic attitude regarding economic, social and environmental aspects, and not only to isolated actions, such as the development of new environmentally responsible processes and products.
The adoption of sustainable innovation practices can affect business performance. Several studies, such as those by Gunday, Ulusoy, Kilic and Alpkan (2011), Lopez-Valeiras, Gomez-CondeC and Naranjo-Gil (2015) and Wagner (2010), have linked the results of investments in sustainable innovation to business performance.
Sustainable innovation contributes to business sustainability, since it has a potential positive effect on a company's financial, social and environmental performance (Aguilera-Caracuel & Ortiz-de-Mandojana, 2013).
For Lopez-Valeiras et al. (2015), there is an increasing interest at the academic, business and political level regarding the relationship between sustainable innovation and business performance. These authors highlight the need for studies that provide more evidence on this link. Although literature suggests that the management of sustainable innovation can be an important source of benefits for companies, empirical results are still not conclusive.
Thus, in view of the importance of sustainable innovation for the competitiveness of companies and its potential relationship with business performance, the main question of this research is:
RQ1. How does the adoption of sustainable innovation practices relate to the performance of industrial companies?
By addressing these topics, this study can foster the adoption of a business behavior that integrates the goals of sustainable development in a strategic and systemic way.
In spite of their relevance, studies that seek to verify the relationships that are intrinsic to these subjects, as well as the implications for management with regard to the competitiveness of Brazilian companies, are still incipient. In this sense, the results of this research lead to the identification of important elements for the development of this knowledge area, with a significant contribution to the country's scientific production, as well as to a reflection on business practices.
This paper is structured in six sections, besides this introduction. Sections 2, 3 and 4 present the theoretical contributions and Section 5 describes the methodological procedures. Subsequently, we present the analysis and discussion of results, followed by the final remarks.
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Sustainable innovation practices
Sustainable innovation can contribute to organizations' competitive advantage, since sustainability has led companies to a prominent position before stakeholders. For Schaltegger, Ludeke-Freund and Hansen (2016), business activities are responsible for many environmental and social problems; therefore, concerns toward sustainability are of critical importance.
For Dyck and Silvestre (2018), the world's awareness of social and ecological crises has grown, bringing the need for more sustainable lifestyles. Organizations have a critical role in facing these crises, by implementing innovations that promote sustainable development.
According to Charter and Clark (2007), there is not a single established concept for sustainable innovation, which reflects the difficulty to define sustainability and sustainable development. However, despite this conceptual trouble, there is an emerging recognition that sustainable innovation is related to entrepreneurship and to new concepts, technologies, products and services, as well as to the adoption of new processes and social systems.
The authors emphasize that, although the terms sustainable innovation and eco-innovation are often used as synonyms, eco-innovation only addresses the environmental and economic dimensions, while sustainable innovation also comprises ethical and social aspects. For Boons, Montalvo, Quist and Wagner (2013), sustainable innovation goes beyond eco-innovation by including social objectives, and refers more clearly to the holistic and long-term process of sustainable development.
Siqueira and Pitassi (2016) state that sustainability-oriented innovation is a wider concept than eco-innovation, since it encompasses the social dimension and is a multilevel phenomenon that requires three major forces for its promotion: at the macro level: government policies and actions that overcome the immense risks involved in radical innovations; at the company level: the development of new business models; and at the individual level: changes in people's cognitive mechanisms, attitudes and behaviors.
Szekely and Strebel (2013) define sustainable innovation as the creation of something new that improves performance in the three dimensions of sustainable development: social, environmental and economic. Such improvements are not limited to technological changes, and regard changes in processes, operational practices, business models, thinking and business systems.
Hansen, Grosse-Dunker and Reichwald (2009) observe that sustainability-oriented innovation is a tool that covers both sustainability issues and the inclusion of new customer and market segments, thus adding a positive value to the firm's global capital.
Hence, the great challenge for organizations is to innovate through the perspective of sustainable development, by adding value to products and processes and contributing to minimize socio-environmental impacts that result from industrial activity.
A company can implement incremental or radical sustainable innovations. However, in practice, most firms' sustainable innovations are incremental. This is due to the difficulty of organizations to go beyond incremental levels, because there is not a large market for sustainable products and services yet. Social changes are necessary to value these products and services (Charter & Clark, 2007).
For Boons (2009), sustainable innovations need to go beyond incremental levels, since sustainable development requires the change of production and consumption systems. Thus, sustainable innovation needs to cross the business environment and be valued by society, so that companies can invest in levels of radical innovation, building a new logic toward sustainability.
In order to evaluate and structure the effects of sustainable innovations, Hansen et al. (2009) propose a generic model called the Sustainability Innovation Cube (SIC), which includes three dimensions: target, life cycle and types of innovation. The target dimension explores the concept of the Triple Bottom Line, by distinguishing the economic, environmental and social effects of innovations. The life cycle dimension relates to the effects of products and technologies in the different stages of their life cycles. The types of innovation dimension consider technological innovations of products or processes, innovations in business models and product-service systems (PSS). Considering the possible intersections of these dimensions, the model has 27 individual areas that show the moment when the potential effects of sustainability emerge.
Through the three dimensions of the generic model--target, life cycle and types of innovation--Hansen et al. (2009) identified practical implications for the management of sustainable innovation, represented by the following categories: integration of the sustainability criterion; integration of stakeholders and users; expansion of the PSS; targeted marketing for sustainable innovation; and sustainability awareness.
Bocken, Short, Rana and Evans (2014) suggest a set of sustainable business model archetypes, in order to develop a common language that can accelerate the development of sustainable business models in research and practice. They identified several examples of mechanisms and solutions that can contribute to the innovation of business models for sustainability, based on a review of literature and business practices. They proposed eight archetypes, grouped in the dimensions of technological, social and organizational innovation, to describe mechanisms and solutions that can contribute to sustainability: to maximize material and energy...
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