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Bucheli-Calvache, J.M.; Zuñiga-Collazos, A.; Osorio-Tinoco, F.; Cervantes-Rosas, M.D.L.�. Integrating Concept of Eco-Innovation. Encyclopedia. Available online: (accessed on 19 June 2024).
Bucheli-Calvache JM, Zuñiga-Collazos A, Osorio-Tinoco F, Cervantes-Rosas MDL�. Integrating Concept of Eco-Innovation. Encyclopedia. Available at: Accessed June 19, 2024.
Bucheli-Calvache, Juan Manuel, Alexander Zuñiga-Collazos, Fabian Osorio-Tinoco, María De Los Ángeles Cervantes-Rosas. "Integrating Concept of Eco-Innovation" Encyclopedia, (accessed June 19, 2024).
Bucheli-Calvache, J.M., Zuñiga-Collazos, A., Osorio-Tinoco, F., & Cervantes-Rosas, M.D.L.�. (2023, July 20). Integrating Concept of Eco-Innovation. In Encyclopedia.
Bucheli-Calvache, Juan Manuel, et al. "Integrating Concept of Eco-Innovation." Encyclopedia. Web. 20 July, 2023.
Integrating Concept of Eco-Innovation

Eco-innovation is an important factor not only for the competitiveness of companies in the face of the greening of markets but also as one of the primary means on the road to sustainable development.

eco-innovation sustainable development

1. Definition of Eco-Innovation

Eco-innovation has generally been accepted as the main way to achieve sustainable development in business practice based on the following four fundamental aspects of its definition [1]: (1) the object of innovation, referring to the various components of the company; (2) minimization of environmental impact, with the control of resource consumption, polluting emissions and waste; (3) market orientation, being based on competitiveness, taking into account the stakeholders; and (4) sustainability, as the economic and social purpose of the company is also affirmed.
In correspondence with the above, there is great diversity in the definitions of eco-innovation that present subtle differences depending on the degree of environmental commitment that has been assumed institutionally. A typical example is the following definition of eco-innovation given by the European Commission in 2007 within the “Competitiveness and Innovation Framework Programme” and used as a reference by many authors including Peyravi and Jakubavicius [2] (p. 4): “Any form of innovation as significant and demonstrable progress towards the goal of sustainable development, through the reduction of impacts on the environment or achieving a more efficient and responsible use of natural resources, including energy”.
This definition underlines two essential aspects of the concept of eco-innovation, that is, it frames it in the general practice of innovation and, in addition, defines its orientation in reducing environmental impacts. The aforementioned definition also establishes the aspect of motivation for eco-innovation, which, in this case, would be the political agenda of sustainable development. According to Schiederig et al. [3] (p. 181), in relation to this last aspect of motivation, other international bodies such as the Organization for Economic Collaboration and Development (OECD) point out that only the effect of reducing environmental impact is important when defining eco-innovation as follows: “The creation or implementation of new, or significantly improved, products (goods and services), processes, marketing methods, organizational structures, and institutional arrangements that, intentionally or unintentionally, lead to plausible improvements in environmental performance compared to the corresponding alternatives”.
The OECD definition states that the motivation can be different from the environmental one, for example, a reduction in costs for waste management. In the same way, emphasis is placed on the previous definition of an improvement related to the possible alternatives. According to Schiederig et al. [3], this is an essential aspect since a comparison with intra- and inter-organizational alternatives is necessary and, therefore, can only be defined relatively and temporally, which is an important precision measurement for the practice of SMEs given their characteristics. Another aspect of the OECD definition relevant to SMEs is that eco-innovation can be technological or not, as is the case with organizational structure or marketing.
In correspondence with the above, the proposed definition of eco-innovation must assume, as constituent entities (X), innovation with explicit objects including products, processes or organizational methods, which significantly improve environmental performance in relation to possible alternatives (Y). In this case, the context specific to eco-innovation (C) includes the markets and what this implies regarding the contribution of value for customers and the company, as well as the institutional framework in relation to the political program of sustainable development. The ultimate purpose (Z) of eco-innovation, considering that the market and sustainability are not incompatible and that the latter can be achieved within commercial dynamics, is to achieve the necessary competitiveness between companies, including SMEs, which would always be something of a relative and temporary nature. In this way, eco-innovation is defined by the following statement:
The process for innovation of products, processes or organizational methods that, by providing market value, significantly improve environmental performance compared to possible alternatives, thus improving competitiveness within a specific social and institutional context.
Therefore, the definition is a pragmatic position, where the motivation for eco-innovation does not have to be environmental performance, although it is a necessity to be called such, as could be the case, for example, of selling competitive products in the world market. On the other hand, social performance is treated from the relationships that occur in the specific social and institutional context. In general, it is also in this way that the interrelation between eco-innovation, the political agenda and the objectives of sustainable development promoted by the international community is assumed.

2. Dimensions of Eco-Innovation

In the dimensions of eco-innovation, there is also diversity in the approaches that obey the theoretical perspective and purpose of the previous studies. In this sense, there are relevant works by Hellström [4], on Schumpeter’s theory of organizational change associated with innovation, and that by Andersen [5], on the perspective of an industrial dynamic. Other seminal works include those by Carrillo et al. [6], from an evolutionary approach, as well as Xavier et al. [7], which addresses the management of eco-innovation and its maturity in companies. In general, the analyzed literature can be placed into one or more of the perspectives mentioned above. For the reference frameworks used in this research, the topic of dimensions is important when qualifying the element of constituent entities (X), dealing with the various modes of realization and the flexibility inherent in eco-innovation (y), which are fundamental aspects in the development of the competencies required for SMEs. The dimensions also reflect the aspects that serve as a solution to the interests that derive from the context (C) and, with it, the ways to achieve competitiveness (Z).
As an integrative synthesis aimed at understanding the concept of eco-innovation for SMEs, the following dimensions are proposed: (1) organizational change; (2) product/service life cycle; and (3) eco-innovation management. These dimensions also serve as an analytical tool for the practice of eco-innovation and correspond to the evolutionary theory of entrepreneurial activity.
Regarding the organizational change implied with eco-innovation, the analyzed literature agrees that the most important and used theory is that of Schumpeter, which represents the magnitude of change in a matrix with the incremental/radical and component/system sets [4][6]. However, the variations for this theory observed in the publications are notable: the most significant among those analyzed are the typologies proposed by Andersen [5], including complementary, integrated, alternative and social sets, as well as by Carrillo et al. [6], with their evolutionary determinations of component, subsystem and system in relation to the sustainable performance of the company.
Following the referential frameworks used in this research, in the perspective of the functional utility of knowledge, it is considered that the perspectives previously exposed are not exclusive or incompatible. In this sense, an integrative synthesis of organizational change implied with eco-innovation is proposed, based on the arrangement of Andersen [5], given its high descriptive value of current business dynamics.
The axes used for the description are defined as follows: (1) incremental/radical and (2) complementary eco-innovation/integrated eco-innovation/alternative eco-innovation. The horizontal set is the best known since Schumpeter’s proposal and refers directly to the magnitude of change in the product/service system with eco-innovation: the term incremental means only gradual modifications that add value as a result, while the term radical means a discontinuity or rupture with the product/service system or parts of it [4][6].
On the other hand, the vertical axis represents an adaptation of the arrangement of Andersen [5], making it coincide and integrating it with the determinations of Carrillo et al. [6]. Both perspectives are considered to be functionally equivalent. In this case, it is a direct reference to the type of change in the product/service system: Complementary eco-innovation refers to components that are added to the system to improve environmental performance, such as, for example, technological additives or processes for pollution management. Integrated eco-innovation represents changes in the system that are a continuity of the existing one, which makes the performance more environmentally friendly or eco-efficient. Alternative eco-innovation implies a new trajectory or discontinuity with the product/service system, which seeks a positive impact on the environment or eco-effectiveness, such as, for example, replacing conventional agriculture with organic agriculture [5].
The analyzed literature indicates that eco-innovations can mean new ways of organizing production and consumption at the most systemic and social levels, imposing new functional interactions between organizations, families and workplaces, as well as new perspectives for organizing cities and their technical infrastructure [4][5][6][8]. Although this possibility is explicitly reflected in the description of organizational change reported in some references, in the approach to the concept of eco-innovation, it was preferentially maintained as an implicit situation in the axes or sets that were used. In practice, the action of SMEs is still far from achieving this possible performance and systemic impact.
On the other hand, the life cycle dimension refers directly to the elements of the product/service system in relation to the value result that is delivered to its users and the corresponding impact on society [6]. Therefore, this dimension emphasizes the value chain throughout the life cycle of the product/service and the relationships that are established in this sense with the different actors [9][10][11]. The life cycle approach is also a theoretically self-represented notion that has evolved since the second half of the last century, extending from marketing to other areas of organizational analysis and engineering. In the analyzed literature, some of the varied models that exist as a representation of the life cycle are usually used [6][10]. With a descriptive purpose only, this research assumes an adaptation of the model proposed by Kriwet et al. [12], making it correspond to the most recent determinations of Cao and Folan [13].
Finally, the management dimension refers to the strategic integration of eco-innovation in companies with organizational practices that guarantee its application to each new opportunity. In the analysis of the previous dimensions, it was possible to see the possibilities of eco-innovation in different elements of the product/service system (X) as well as the variations in the magnitude of the organizational change that eco-innovation can bring (Y). However, eco-innovation is not only an exercise of operational excellence; its relative complexity implies that companies continuously test management models or methods to motivate creativity and increase the ability to quickly grasp the environmental possibilities offered by the environment. That is, it is a context conducive to the effectiveness of eco-innovation, taking into account the way in which people relate to each other around the projects of the company, from the different organizational functions [9][14][15].
In the analyzed bibliography, the dimension of management had a significance of first-order or relevance. In terms of the reference frameworks used in this research, this is understood since it is the aspect that facilitates the instantiation of the different constituent entities (X) in the notion of status or eco-innovation (Y). The relevance of management is also seen in the analysis when it is found that the main barriers in the company for eco-innovation refer to this dimension, as pointed out the following: (1) lack of a culture, that is, of values and organizational climate, for sustainable development [4][16]; (2) lack of resources and appropriate initiatives [17][18]; (3) short-term learning processes that are more focused on solving specific problems than those at the organizational level [4][19]; and (4) lack of vision and strategy formulation for eco-innovation, which frames the previous ones [15][20].
For SMEs, strategic integration is cardinal since it is in this aspect, as a rule, where they present the greatest problems of adequate systematization. Taking into account the above regarding barriers to eco-innovation, the analyzed literature indicates the following categories as fundamental elements to consider in the management of eco-innovation [7][21][22][23]: (1) strategy; (2) culture; and (3) organization. It is argued that this classification also allows a causal analysis of sustainable performance and the determination of the evolutionary stage or level of maturity in which eco-innovation is present in companies. Additionally, it is recognized that eco-innovation does not necessarily correspond to an area of R + D; the key factor is the practical knowledge (know-how) that provides a solution to a potential demand with the feasible means to develop innovation, which can be performed from the existing units coordinating its implementation [9].

3. The Economic Approach to Eco-Innovation

A well-known perspective on the classification of approaches to sustainability that was accepted in the analyzed literature is that provided by Hopwood et al. [24]. They classify the approaches into the following three groups according to the degree of correlation with the social and environmental correspondence: (1) defense of the status quo, as a predominant group, where sustainability is a technological problem to be solved within the current economic system; (2) reform of the economic system, where most of the academy is located, proposing the inclusion of social and environmental aspects in economic rationality; and (3) radical change in the economic system, which advocates the transformation of political, economic and social institutions.
The analysis suggests that the so-called status quo and reform groups, each with a different scope, follow an instrumentalist approach that advocates the design and deployment of environmentally friendly technologies that should be able to extend the limits imposed by the current socioeconomic model and thus minimize the impact of human activity on ecosystems [3][24][25]. These groups are based on the idea originated by the Brundtland report, which states that environment and economic development are not incompatible and that technology is capable of achieving an ecological transition of markets [26][27][28]. For their part, those who support a radical change, i.e., a position in which technology is far from neutral, argue that sustainability eventually depends on new sociocultural values instead of technologies and that the competitiveness imposed by markets is not an adequate way for the ecological transition of society [24][29][30].
From the analysis, it can be claimed that the concept of eco-innovation is born within the framework of the instrumentalist economic approach, whose position is to move toward an “ecological modernization” of industrial societies “through eco-innovation” [30] (p. 560). However, the analyzed literature also recognizes that markets by themselves fail to solve environmental externalities, so it is proposed that the process of ecological transition does not only involve technological change, but it is necessary to address the various institutional implications by inserting environmental and social aspects into the analysis of economic activity [2][3][25][30].
Knowing the economic approach for eco-innovation is relevant to the concept used in this research by framing the epistemic foundations for the relationships that occur in the context (C) and practical relevance (Z) of eco-innovation. According to these fundamentals of eco-innovation, the realization of a functional economy, oriented to products/services feasible for the environment without affecting the welfare of consumers, implies, as a perspective of sustainable development, the dematerialization of the economy, that is, an absolute reduction in the amount of materials and energy necessary to serve the functions of consumption in society, with a change in the direction of innovation that prioritizes saving resources over saving labor [2][25][30][31].

4. Drivers of Eco-Innovation

In the analyzed bibliography, the topic of drivers was the most treated subject of eco-innovation. Similarly, the importance given to the various drivers varied according to the academic perspective from which it is approached: while sources inclined to environmental economics place greater emphasis on regulation, articles on business management place greater emphasis on consumer preferences and pressures on corporate social responsibility [32][33][34]. For the referential framework used in this research, the topic of drivers explicitly considers the relationships that occur in the context (C). Every enterprise is located in a social and institutional setting, for which differences can be expected at the national and regional levels [35]. It was also recognized that, consequently, there are specific patterns in the greening of markets that affect the capacity for innovation and that it is part of the selection of the company, highlighting the importance of collaboration in addressing eco-innovation [36][37].
The following three orders of categorizations for the drivers of eco-innovation were identified in the analyzed literature: (1) one that classifies drivers according to the theory of stakeholders [32]; (2) those that classify drivers according to the role they play in the type of environmental impact [34]; and (3) one that analyzes drivers in the interrelation between the levels of the social structure and eco-innovation [33]. In the synthesis of the concept that has been presented, the first classification indicated was used because it is less dependent on the specific context and also more relevant in the orientation to SMEs. In this sense, the importance of stakeholder theory lies in the fact that strategy, as an element that determines the direction of an organization, is considered a function of the synergy among the various stakeholders [38][39].
Although authors such as Waddock et al. [40] follow the traditional classification of stakeholders according to the possibility of exerting influence, that is, primary, secondary and environmental, it is currently preferred to do so from the following three large groups [41]: (1) capital market stakeholders; (2) product market stakeholders; and (3) organizational stakeholders. The first would include, among others, shareholders and banks, which are important since they expect to generate a return for the risk assumed with the financial investment. On the other hand, the second and third groups frame, among others, customers, suppliers, employees and managers, which are essential when determining the company’s strategy and its realization [41].
According to Munodawafa and Johl [32], based on the role of stakeholders in eco-innovation and performance, the largest percentage of the literature focuses on product market stakeholders and organizational stakeholders, while a minimal part of the studies focuses on capital market stakeholders. In this sense, the work on the relationship between eco-innovation and performance identifies the following key drivers, which are grouped together with the stakeholder group from which they emanate [32][34][42]: (1) market demand (customers); (2) market competition (competitors); (3) regulatory pressures (government); (4) financial incentives (government); (5) human capital (employees); (6) strategic alignment (managers); (7) value chain action (suppliers); and (8) business model (shareholders).
Market dynamics, i.e., consumer action and competition, are recognized in the literature as one of the key drivers for eco-innovation [27][32][34][43]. In fact, the growing awareness of consumers about environmental issues is creating a distinct group of customers oriented toward sustainable consumption, both with the growing consumption of organic products and with other value propositions created using eco-processes and cleaner production technologies [27][32]. For this part, regulation and financial incentives for environmental performance, mainly due to government action, are unanimously recognized as a strong precedent for eco-innovation [32][33][34][44][45].
Finally, the action of organizational factors is what makes eco-innovation possible for companies and determines its scope [28][32][33][34][44][46]. It has been argued that strategic alignment with eco-innovation is one of the keys to achieving value creation using sustainable performance [32][46]. Managers, shareholders and suppliers are essential in the formulation of strategy and for the effective and efficient use of organizational resources in the development of capacities for eco-innovation [47]. Employees also increasingly have a fundamental role in the innovative capabilities of organizations, being the main factor of absorption and creation of new knowledge, and, therefore, they are key in the strategic alignment toward eco-innovation [28][32][33][44][46].


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