Innovation and Sustainability

  • By Leyton Benelux
    • 29 Dec, 2022
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Innovation and sustainability are two concepts that are strongly interconnected, and both are of utmost importance in our modern societies. Those concepts are therefore drawing a lot of attention from academic, industrial and public institutions, and will continue to do so for many years.

For decades now, companies have embraced innovation as a way to thrive in a globalised society and in an increasingly competitive environment. Indeed, investing in innovation can lead, among others, to improved productivity, reduced cost, improved brand recognition and value, improved profitability.[1], [2], [3], [4]

Conversely, the private sector has been accused for many years to overlook its environmental and societal impact over economic objectives. Today, due to the ever increasing importance of sustainability issues and the population’s awareness of it, companies are facing pressure to take sustainability into consideration for all their operational and strategic decisions. [5]

This also includes R&D with the concept of sustainable development defined in 1987 by the World Commission on Environment and Development’s Brundtland report as a “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.[6] More and more, commitment of the private sector toward sustainability can even go as far as dedicate innovation to develop new technologies directly destined to build a more sustainable future.[7], [8], [9]

And while it has been demonstrated many times that innovation can serve sustainability, it appears that, surprisingly, the reverse could also be true. The literature is quite limited on this area of research, but a growing number of research groups have started investigating the deeper interconnections between sustainability and innovation, one of the main questions being: “Can sustainability stimulate innovation?

In their review of 2016, Adams et al. confirmed that commitment to sustainability has a positive relationship with business performance [7]. This was later supported by a study of Foss and Saebi [10] ; and again, by Klein et al. in 2021 who argued that “sustainability commitment influences certain strategic orientations that increase the propensity of innovating a business model”.[11] Most of the other studies on the subject are concluding the same way : linkage between the two concepts of sustainability and innovation is much deeper and complex than it appears to be at first sight and, most probably, the 2 concepts are strongly influencing each other on a business level.[12], [13], [14]

In Belgium, the three regional funding entities for innovation, Innoviris, SPW Recherche Wallonie and VLAIO, have also recently decided to commit to sustainability. This is well exemplified in the strategic innovation domains announced by both the Brussels and Walloon region (Energy and climate, optimal use of resources, efficient and sustainable urban space and flows, social and public innovation and social inclusion, targeted and integrated health & pharma)[15], [16]. Even more, concerning Innoviris, sustainability (economic, environmental and social) is one of the main pillar for the evaluation of a project eligibility, together with innovation, feasibility and commercial valorisation.[17] Also in Flanders, VLAIO will reinforce its focus on sustainability aspects for innovative projects and now demands the submission of a so-called climate plan for large and energy intensive companies.[18] 

The European funding landscape is also deeply intertwined with the notion of sustainable development, having fully absorbed European policies built on the UN Sustainable Development Goals[19]. Sustainable development is therefore fully intended from an economic, environmental and social perspective. As such, the European funding schemes offer on one hand specific opportunities to projects aiming at funding sustainable innovation (e.g. under the LIFE programme[20], Innovation Fund[21], Horizon Europe[22], etc), while, on the other, always require funded projects to contribute to EU Policies embedding sustainability at their core (e.g. the Green Deal, the 2050 long-term strategy) or, a minima, to avoid delivering any significant harm (e.g. to environment).

At Leyton we strongly believe that innovation and sustainability go hand in hand, resulting in optimal business performance. Therefore, we have become experts in dealing with those concepts together and to challenge our clients about the sustainability of their innovative project. Such an approach optimises the chances of success for a grant approval but also contributes to raising awareness of the importance of sustainability in our society.


References

[1] T. Obradovića, B. Vlačićb, M. Dabićac, Open innovation in the manufacturing industry: A review and research agenda, Technovation, 2021, 102, 102221

[2] https://online.hbs.edu/blog/post/importance-of-innovation-in-business#:~:text=Innovation%20is%20often%20necessary%20for,in%20today’s%20highly%20competitive%20world.

[3] S. Rao, A. Ahmad, W. Horsman, P. Kaptein-Russell, The Importance of Innovation for Productivity, Academia, March 2001.

[4] T. Petrovska, the role and importance of innovation in business of small and medium enterprises, Economic Development, 2015, No.1-2, 55-74

[5] https://asci.org.au/resources/Documents/Sustainable-Business.pdf

[6] Our Common Future. World Commission on Environment and Development, Oxford, 1987. United Kingdom: Oxford University Press.

[7] R. Adams, S. Jeanrenaud, J. Bessant, D. Denyer, P. Overy, Sustainability-oriented innovation: a systematic review, Int. J. Manag. Rev., 2016, 18, pp. 180-205

[8] N. Altuna, A.M. Contri, C. Dell’Era, F. Frattini, P. Maccarrone, Managing social innovation in for-profit organizations: the case of intesa sanpaolo, Eur. J. Innov. Manag., 2015, 18 (2), 258-280

[9] P. Bansal, Sustainable development in an age of disruption, Acad. Manag. Discov., 2019, 5 (1), 8-12

[10] Foss, Nicolai J., and Tina Saebi, Fifteen Years of Research on Business Model Innovation, Journal of Management, 2017, 43 (1), 200– 27.

[11] S. P. Klein, P. Spieth, S. Heidenreich, Facilitating business model innovation: The influence of sustainability and the mediating role of strategic orientations, Journal of Product Innovation Management, 2021, 38 (2), 271-288

[12] S. K. Singh, M. Del Giudice, C. J. Chiappetta Jabbour, H. Latan, A. S. Sohal, Stakeholder pressure, green innovation, and performance in small and medium-sized enterprises: The role of green dynamic capabilities, Business strategy and the environment, 2022, 31 (1), 500-514.

[13] F Hermundsdottir, A Aspelund, Sustainability innovations and firm competitiveness: A review, Journal of Cleaner Production, 2021, 280 (1), 124715

[14] B. Payán-Sánchez, L. J. Belmonte-Ureña, J.-A. Plaza-Úbeda, D. Vazquez-Brust, N. Yakovleva, M. Pérez-Valls, Open Innovation for Sustainability or Not: Literature Reviews of Global Research Trends, Sustainability, 2021, 13(3), 1136

[15] https://innoviris.brussels/news/6-strategic-innovation-domains-brussels

[16] https://economie.wallonie.be/content/le-gouvernement-adopte-la-nouvelle-strat%C3%A9gie-wallonne-de-sp%C3%A9cialisation-intelligente-s3-et

[17]https://innoviris.brussels/fr/program/rd-projects

[18]https://www.vlaio.be/nl/nieuws/vlaanderen-investeert-jaarlijks-eu-6-miljoen-om-ondernemers-te-begeleiden-bij-digitale-en

[19] https://sdgs.un.org/goals

[20] https://cinea.ec.europa.eu/programmes/life_en

[21] https://cinea.ec.europa.eu/programmes/innovation-fund_en

[22] https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-and-open-calls/horizon-europe_en

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Leyton Benelux

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