Energy eco‐innovations for sustainable development: Exploring organizational strategic capabilities through an energy cultures framework

This article reports on research on energy eco‐innovation using case studies of firms. Positioning energy efficiency changes in an organization as “eco‐innovations,” the paper examines the firm‐level resources involved for these to be successful. To identify these resources, the energy cultures (EC) framework, an organizing tool to understand energy behaviour, is drawn on. From an analysis of 142 case studies of successful business and energy change, three models are developed. It is found that the EC framework (consisting of norms, material culture, and practices) makes explicit key resources involved in developing energy eco‐innovations. The findings show that for an eco‐innovation capability, there is a need to align the physical resources with intangible resources to lead to learning and knowledge that, in turn, needs to be aligned with the firm strategies. This research has implications for developing company strategy and practice to drive energy eco‐innovations.     

Can breakthrough innovations serve the poor (bop) and create reputational (CSR) value? Indian case studies

Though radical and complex reengineered product innovations are not discussed much in either the ‘Corporate Social Responsibility’ (CSR) or the ‘Base of the Income Pyramid’ (BoP) literature, both support the premise that if an innovation serves the poor, then it will generate CSR gains. To test this assumption with respect to breakthrough technological innovations, the present paper proposes a theoretical construct and uses it to examine two innovations launched in India, namely genetically modified cotton seeds and a HIV/AIDS drugs cocktail. Because firms decide on innovation outlays to maximize profit without including an explicit CSR component, it develops indicators to examine if any involuntary CSR effort was embedded in the innovation strategy. It confirms that though firms do not invest in innovation to earn CSR credit, some breakthrough technological innovations, not all, can trigger CSR returns. There are tradeoffs between CSR effort and BoP innovation market value. Higher the consumer surplus generated by the innovation, better the bargaining position of the innovator vis-à-vis contestations. The windows of opportunity for generating BoP market value and CSR value are context specific. A robust business strategy rather than philanthropy is needed for breakthrough technological innovations to be marketed to BoP communities.     

Exploring networks of proximity for partner selection,firms' collaboration and knowledge exchange. The case of clean‐tech industry

Nowadays scholars widely recognize that know‐how, capabilities and knowledge needed to generate innovations often reside outside the firm, start‐ups are a valuable source, and collaborative networks are a fundamental strategy for innovation. This is true especially for the clean‐tech sector, which is characterized by the continuous search for innovative solutions and technological advancements. The purpose of the paper is to provide a methodological support for the screening of potential partners based on network analysis and, then, help firms to select them for collaboration and knowledge exchange. The methodology can be easily adopted by managers and executives to identify firms to monitor with greater attention for future investments. The analysis is on a dataset of 4,782 clean‐tech companies operating worldwide. Results highlight that energy companies looking for external sources could investigate their network of business proximity if they intend to specialize in a defined field and/or collaborate with similar partners, while they could explore their network of strategic proximity if they intend to diversify their businesses, that is cooperating and exchanging knowledge with firms with distant but complementary capabilities and resources.     

Sustainable Development Strategies for Product Innovation and Energy Efficiency

The interaction between product innovation and companies’ activities aimed at improving the energy efficiency of production facilities has been relatively little studied, but is of great relevance to society and companies given the strong focus of governments on grand challenges like climate change, green innovation technologies, and environmental problems in general. This paper utilizes the 2009 European Manufacturing Survey for the Danish sub‐sample including 335 manufacturing firms. Through factor analysis, this paper confirms three main areas of focus of new product development: efficiency considerations, market attention, and greening of innovation. Logistic regression analysis demonstrates that while market attention is important for the development of new products, green aspects of innovation and efficiency considerations are important for production companies wanting to improve their energy efficiency. When these models are combined, the results highlight that energy efficiency moderates the effect of market attention to new product development. This paper therefore finds that aligning product innovation and energy efficiency is a complex and intertwined process – focusing on one may have indirect detrimental effects on the other. These results point to the conclusion that researchers and practitioners in innovation management have to consider more carefully the specificities and interactions of different types of products and process innovations and their environmental implications, and must formulate new, more sustainable managerial practices combining energy efficiency and product innovation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Successful eco‐innovators: Exploring the association between open inbound knowledge strategies and the performance of eco‐innovative firms

The main purpose of this paper is to analyse the association between open inbound knowledge strategies and the performance of eco‐innovative firms in the food and beverage industry. We propose a mixed framework based on the eco‐innovation literature and the open innovation approach. We consider the characteristics in a traditional sector based upon a resource‐based perspective. Three types of firms are distinguished in terms of their sales growth in the Spanish food industry from the least to the most successful eco‐innovators. Using multinomial logistic regression models, it is shown that the diversity of collaborators (breadth of external sources of knowledge) and joint adoption of product and process eco‐innovations are positively associated with the probability of achieving high sales growth. Moreover, we find an inverted U‐shaped relationship between the breadth of the external search and firm performance, but only for the group of the most successful firms. Moreover, operational flexibility, knowledge‐based capabilities and company size are also positively related to the group of successful eco‐innovators.     

Microfoundations of companies' dynamic capabilities for environmentally sustainable innovation: Case study insights from high‐tech innovation in science‐based companies

To achieve sustainable development, companies are increasingly putting an emphasis on the creation and the promotion of environmentally sustainable innovations. Environmentally sustainable innovation often involves a significant shift in a new strategic direction. This paper studies this shift from a dynamic capabilities perspective and aims to identify the microfoundations of science‐based companies' dynamic capabilities for high‐tech environmentally sustainable innovations. It investigates the development of high‐tech environmentally sustainable innovations in two distinctive science‐based companies. To scholars, this study provides an in‐depth process analysis, over time, of how and why microfoundations of dynamic capabilities influence the development of a science‐based company's high‐tech environmentally sustainable innovations. To practitioners in science‐based firms, this process study can function as a frame of reference, enabling the tailoring of a strategy for high‐tech environmentally sustainable innovation.     

The role of openness in the fuzzy front-end of service innovation

The early stages of innovation involve high levels of uncertainty, leading to it being labelled as the “fuzzy-front end” (FFE). Although openness has been identified as pivotal to innovation performance in the open innovation literature, little effort has been put into exploring its role in the FFE. Specifically, this study examines ‘openness competence’ within the FFE–i.e., the ability of a FFE team to explore, gather and assimilate operant resources from external sources by means of external searches and inter-organisational partnerships. The aim is to investigate the impact of openness competence on front-end uncertainty reduction and service innovation success. Data were obtained from a survey of 122 IT-based service innovation projects implemented by IT service provider firms in Thailand. The results suggest that openness competence positively influences both the degree of uncertainty being reduced during the FFE and the overall success of service innovations. These findings offer several implications for research on open innovation and the FFE as well as encouragement to managers to apply a more open approach to the FFE of their service innovation projects.     

LIFE CYCLE ASSESSMENT AND INNOVATION IN LARGE FIRMS

Life cycle assessment (LCA) applications within large European firms are discussed. Many industrial applications have been proposed for cradle to grave assessments of environmental burdens of products, including technology design and optimization, technology strategy, green marketing and environmental foresight. There is evidence of a growth of LCA competences and applications within industrial firms, although there are few examples of systematic applications of the instrument in business decisions. The influence of life cycle approaches on the generation of product and process innovations is assessed. The paper argues against the assumption that LCA will be ‘internalized’ pervasively across industry. Commodity producers will maintain externally oriented approaches, whereas some engineering based final goods producers may find more routine uses for internally oriented LCAs. These applications may influence technological innovation. In most cases the capacity to appropriate LCA-based innovations will be constrained.     

Inter‐firm R&D collaborations and green innovation value: The role of family firms' involvement and the moderating effects of proximity dimensions

The present paper investigates the relationship between the involvement of family firms in R&D collaborations aimed at developing green solutions and the value of resulting innovations. To dig into this relationship, the moderating effects of two proximity dimensions (i.e., geographical distance and technological relatedness) are also assessed. Analyses are based on a sample of 156 joint patents classified into the “Alternative energy production” field, as defined by the International Patent Classification Green Inventory and successfully filed at the United States Patent and Trademark Office in the period 1997–2010 by publicly listed companies. According to our conjectures, results reveal a positive relationship between the involvement of family firms and green innovation value. Moreover, our findings show that this relationship is hindered when partners are geographically distant or technologically proximate. Eventually, we contribute to the literature on green innovation by unveiling under which conditions inter‐firm R&D collaborations lead to more valuable innovations.     

What's in it for me? Creating and appropriating value in innovation-related coopetition

There has been a substantial increase in collaboration with external stakeholders in R&D and innovation activities in modern economies. In particular, collaborating with competitors (coopetition) has been found to be an effective way of creating both incremental and radical innovations, especially in high-tech industries. However, coopetition also includes some major risks and disadvantages, which makes it undesirable in certain cases. The focus in this study is on the factors that distinguish coopetition from collaboration. We propose that the ability of a firm to reap benefits in innovation-related coopetition is contingent on factors that enable collective value creation, and on those that facilitate the individual isolation of the innovations and any subsequent profits. Further, we suggest that the effectiveness of these factors depends on the novelty of the innovation with respect to current markets and technology. In explicitly analyzing such issues we aim to expand current understanding of how firms can create and appropriate value in collaborative R&D and innovation with competitors as specific partners.     

How do firms achieve sustainability through green innovation under external pressures of environmental regulation and market turbulence?

Analyses in the fields of environmental and innovation research have hindered our understanding of the real effects of external drivers of firms' green innovation and sustainability behaviors on financial performance. This study compares the ways in which two different external factors drive firms to be green innovative: environmental regulation and market turbulence. By dividing green innovation into green process innovation and green product innovation, we propose that environmental regulation increases financial performance mainly through green process innovation rather than through green product innovation, and market turbulence affects financial performance mainly through green product innovation rather than through green process innovation. The results of an empirical analysis based on a mediation model and panel data on 472 Chinese listed firms for 2006–2017 lend support to our hypotheses. Our study contributes to the green innovation management and sustainability literature by offering a holistic framework for examining how firms pursue green innovation and sustainability in response to two different forms of external pressure.     

Supply chain collaboration and eco‐innovations: An institutional perspective from China

This study explores the impact of supply chain collaboration on eco‐innovations in the context of 220 Chinese manufacturing supplier firms involved in global supply chain networks. It investigates how supplier and customer collaborations help firms to enhance product eco‐innovations, and/or process eco‐innovations, and how the institutional context (i.e., regulatory, market, and community pressures) influences these relationships. The structural equation modeling approach is used to analyze the data captured from medium and large manufacturing enterprises in three major sectors: automotive, electronics, and textiles. The results show that community pressure has a positive effect on supplier collaboration, which further leads to enhanced process eco‐innovation. On the other hand, the findings indicate that while market pressure enhances customer collaboration, this does not reinforce product eco‐innovation. Contrary to our expectation, regulatory pressures do not impact supplier or customer collaboration for innovation. Overall, different institutional factors indicate divergent effects on supply chain collaboration and product/process eco‐innovation. The importance of normative pressures, such as those applied through the local community and interest groups, for eco‐innovations in production processes is further discussed as a typical feature of the institutional environment of Chinese supplier firms.     

Green innovation and knowledge: The role of size

This paper reports research on relationship between firm's knowledge sourcing strategy and green innovation. The data are taken from Spanish Technological Innovation Panel survey during 2007–2011. The study contributed to the literature by focusing on the moderating role of firm size on the relationship between knowledge sources and green innovations. Results from over 5,000 firms indicate a shift in the focus from internal knowledge to external knowledge when developing green innovations as firms grow in size. Despite benefits from broad knowledge search on green innovations, the relationship has an inverted U shape. The diminishing returns of knowledge breadth on green innovations are present for smaller firms and disappearing as firms get larger. Government policies promoting more coordination and knowledge complementarity between private and public sector will help to influence more knowledge transfer, ensuring a more sustainable and green economy.     

Capability building through innovation for unserved lower end mega markets

Although product innovation for unserved lower end mega markets in large developing countries has been recognized as an opportunity for improving the competitiveness of local firms, limited research has been conducted that explicitly explores how innovation capabilities can be built for these markets. This study investigates Tata Motors' Nano as an exploratory case of building innovation capabilities. This paper shows that the building of innovation capability could be achieved through creating a process that overcomes ‘the deficiency problem’ in generating radically cheap priced original products.The study's contribution to the literature is that it addresses issues of building local firms' innovation capabilities through creating original products for the unserved lower end market, in which advanced country firms have limited experience.Nano, as an unprecedented innovation in the automobile industry, reveals a path to building innovation capability that has not previously been observed. We show that detailed processes involved in generating an original product for the lower end market provide insights on the strategy in terms of target price setting, initiating innovation process overcoming ‘the deficiency problem’, and creation of complementary resources.     

The influence of scope, depth, and orientation of external technology sources on the innovative performance of Chinese firms

It is commonly accepted nowadays that external knowledge sources are important for firms' innovative performance. However, it is still not clear, what dimensions of firms' external knowledge search strategy are crucial in determining their innovation success and whether these search strategies are contingent on different innovation modes. In this study, we analyse how the innovative performance is affected by the scope, depth, and orientation of firms' external search strategies. We apply this analysis to firms using STI (science, technology and innovation) and DUI (doing, using and interacting) innovation modes. Based on a survey among firms in China, we find that greater scope and depth of openness for both innovation modes improves innovative performance indicating that open innovation is also relevant beyond science and technology based innovation. Furthermore, we find that decreasing returns in external search strategies, suggested by Laursen and Salter (2006), are not always present and are contingent on the innovation modes. Next, we find that the type of external partners (we label it “orientation of openness”) is crucial in explaining innovative performance and that firms using DUI or STI innovation modes have different sets of relevant innovation partners. This shows that the orientation of openness is an important dimension—in addition to the scope and depth of openness. As respondents are located in China, this study provides evidence that open innovation is also relevant in developing countries.     

Do Higher Costs Spur Process Innovations and Managerial Incentives? Evidence from a Natural Experiment

This paper asks whether firms respond to cost shocks by introducing process innovations and increasing the use of managerial incentives. Using a large panel data set of workplaces in Canada, our identification strategy relies on exogenous variation in costs arising from increased border security along the 49^th parallel following 9/11. Our longitudinal difference‐in‐differences estimates indicate that firms responded to the cost shock by introducing new or improved processes, but did not change their use of managerial incentives. These results suggest that the threat of bankruptcy may provide impetus for improving efficiency.     

Towards a functional framework for measuring national innovation efficacy

In an increasingly globalised economy, the ability to draw in innovations and ideas from elsewhere and build on them to create value at home has become a powerful facility for economic growth. Since some places are better at adopting and adapting borrowed ideas than others, the function of ‘innovation through adoption’ deserves more attention at both scholarly and policymaking levels. Based on such beliefs, this paper elaborates the notion of ‘innovation through adoption’ and develops it further to advance the notion of ‘innovation efficacy’. The latter is interpreted here as the efficiency and effectiveness of innovation systems in terms of accessing, anchoring, diffusing, creating and exploiting innovations. This notion is further illustrated in a measurement tool based on a composite index, which we name the ‘Innovation Efficacy Index’.The ultimate contribution of the paper lies in its aim to shift the traditional focus of attention from a fixation with developing and exploiting new knowledge locally to the prospect of value creation through accessing, anchoring or diffusing knowledge acquired from elsewhere.     

The effect of regional factors in the development of eco‐innovations in the firm

This research addresses the study of the effect of regional factors in the development of eco‐innovations in the firm. We assume the hypothesis of regional heterogeneity, that is, geographical factors and the regional heterogeneity play an important role in determining the innovations in the firms. In this line, we will approach our study from the perspective of regional innovation systems (RISs). Therefore, our research question involves the evaluation of regional factors as determinants of eco‐innovation developing in the firm. To examine these questions, the PITEC database that covers the period 2011–2013 was used. Overall, 5,461 firms have been employed for the ordinal logit regression model. This research contributes to the studies of eco‐innovation, extending the investigation into drivers of eco‐innovation, and highlights the impact that RIS has on the eco‐innovative development in the firm. We find that regional interaction and regional characteristics are key elements for the development of eco‐innovation in firms. Thus, the density of companies in the region, the regional per capita income, and the existence of financing mechanisms are key elements for the eco‐innovative development in the firm.     

Sustainability and Environmental Behaviour in Family Firms: A Longitudinal Analysis of Environment‐Related Activities,Innovation and Performance

Environmental behaviour plays an important role as concerns the public image and performance of firms, as well as for the achievement of sustainable development in society. This study investigates the behaviour of family firms regarding environment‐related activities, innovation and performance. Opposing goals are found to impact environmental behaviour of family firms, in particular the trade‐off between family firms' risk awareness and their aim of achieving socioeconomic wealth. We find that family firms initially lag regarding environment‐related activities, beneficial product, process and organizational innovations and performance. Yet, family firms catch up and show overall less volatility compared with other firms. Overall, we thus observe a convergence process between family and non‐family firms, which ultimately enables the two types of firm to achieve similar outcomes in terms of environment‐related activities, beneficial innovations and performance. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment