Innovation For Sustainability Business Transformations Towards A Better World Bocken Ritala
Innovation For Sustainability Business Transformations Towards A Better World Bocken Ritala
Innovation For Sustainability Business Transformations Towards A Better World Bocken Ritala
SUSTAINABILITY
Business Transformations
Towards a Better World
EDITED BY
Nancy Bocken, Paavo Ritala,
Laura Albareda and Robert Verburg
PA L G R AV E S T U D I E S I N S U S TA I N A B L E B U S I N E S S
Series Editors
Paul Shrivastava
Pennsylvania State University
University Park, PA, USA
László Zsolnai
Corvinus University Budapest
Budapest, Hungary
Sustainability in Business is increasingly becoming the forefront issue for
researchers, practitioners and companies the world over. Engaging with
this immense challenge, Future Earth is a major international research
platform from a range of disciplines, with a common goal to support
and achieve global sustainability. This series will define a clear space for
the work of Future Earth Finance and Economics Knowledge-Action
Network. Publishing key research with a holistic and trans-disciplinary
approach, it intends to help reinvent business and economic models for
the Anthropocene, geared towards engendering sustainability and creat-
ing ecologically conscious organizations.
Innovation
for Sustainability
Business Transformations Towards
a Better World
Editors
Nancy Bocken Laura Albareda
Lund University Lappeenranta University of Technology
Lund, Sweden Lappeenranta, Finland
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
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Praise for Innovation for Sustainability
v
Contents
vii
viii
Contents
Index 451
Notes on Contributors
than 20 book sections. His main research interests are corporate sus-
tainability management, sustainability assessment, LCA, industrial
ecology/circular economy, interorganisational management and sustain-
ability-oriented innovation. He was named as DuPont Young Professor
2016 and he was awarded with the Seraphine-Puchleitner-Price 2017 by
the University of Graz as the best Ph.D. supervisor.
Nancy Bocken is Professor and Research Coordinator in Sustainable
Business Management and Practice at Lund University, IIIEE in
Sweden. She focuses on different approaches for sustainable business
innovation such as experimentation and business model innovation. She
is also Associate Professor at TU Delft, Industrial Design Engineering
and Fellow at the Cambridge Institute for Sustainability Leadership,
which develops and delivers executive programmes and education in
sustainability leadership. She is also Visiting Professor at Lappeenranta
University of Technology and Maastricht University. Nancy co-founded
HOMIE who are involved in ‘pay per use’ business models, starting with
washing machines, to drive sustainable consumption and ‘circularity’.
Dr. Alex da Mota Pedrosa is Professor at the DHSH. Dr. Pedrosa’s
expertise is in the fields of new product and service development, organ-
isational behaviour and research methods. His research interests include
innovation management, innovation systems at different levels, organi-
sational behaviour and research methods. He teaches courses in innova-
tion management and methods as well as in public organisation.
Jan Carel Diehl (1969) received his M.Sc. and Ph.D. degrees in
industrial design engineering from Delft University of Technology.
In his present position, he is Associate Professor for the Design for
Sustainability (DfS) research programme and Senior Researcher within
the Delft Global Initiative and the LDE Centre for Frugal Innovation
in Africa. The focus of his research is on Context Variation by Design
(CVD) and Sustainable Product Service Systems (SPSS) especially
applied in low-resource settings.
Linn Meidell Dybdahl works at the Nordic Institute for Studies in
Innovation, Research and Education. Her research interest is innova-
tion towards a more sustainable society, on both an organisational and
xiv
Notes on Contributors
xxv
xxvi
List of Figures
N. Bocken (*)
IIIEE, Lund University, Lund, Sweden
e-mail: [email protected]
P. Ritala · N. Bocken
Lappeenranta University of Technology, Lappeenranta, Finland
e-mail: [email protected]
L. Albareda
Lappeenranta University of Technology, Lappeenranta, Finland
e-mail: [email protected]
© The Author(s) 2019 1
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_1
2
N. Bocken et al.
have caused on Earth systems are putting our resilience at risk (Steffen
et al. 2011). In this regard, nine “planetary boundaries” (Rocktröm
et al. 2009) are highlighted: climate change, rate of biodiversity loss,
interference with the nitrogen and phosphorus cycles, stratospheric
ozone depletion, ocean acidification, global freshwater use, land use
change, chemical pollution and atmospheric aerosol loading. This
analysis has been integrated in international studies such as the latest
Intergovernmental Report on Climate Change report (IPCC 2018a)
that shows the pressing need to limit global warming.
Indeed, the most pressing issue of all is the climate change, because it
is intertwined with several other sustainability issues. The IPCC (2018a)
is clear on the ever more pressing need to tackle climate change to
curb further devastating effects, including reduced crop yields, increas-
ing sea levels, coral bleaching, extreme weather events, increased water
stresses and droughts, slower economic growth and more people living
in poverty. In order to limit global warming as per the Paris Climate
Agreements, policy and business action need to be accelerated and
ambitions need to be raised (IPCC 2018a). “Limiting global warming to
1.5 °C would require rapid, far-reaching and unprecedented changes in
all aspects of society”, according to IPCC Chair Lee (IPCC 2018b: 1).
More broadly, the key sustainability challenges have been formal-
ized in 17 sustainable development goals (SDG), developed from the
Millennium Goals, including challenges around climate action, clean
water and sanitation, zero hunger and reducing inequality. They were
adopted by the UN in 2015 calling for new collaborative solutions by
governments, businesses, researchers and civil society organizations
(George et al. 2016). These grand challenges may be viewed as “the
R. Verburg
Faculty of Technology, Policy and Management,
Delft University of Technology, Delft, The Netherlands
e-mail: [email protected]
N. Bocken
Industrial Design Engineering, Delft University of Technology,
Delft, The Netherlands
1 Introduction: Innovation for Sustainability
3
We are entering the third decade on the twenty-first century. This will
be an important period for business, sustainability and innovation. IfS
displays multiple levels of action needed to interconnect individ-
ual sustainable leadership and entrepreneurship to the other levels of
organizational transformation and systems transitions towards sustain-
able development. We see how business is becoming problem-solvers,
aiming to provide solutions to grand challenges and fostering ways to
adopt and build on SDG. IfS is not a secondary goal anymore; it is a
core approach for creating value at multiple levels: products, services,
business models and system-level transitions. This reflects a necessary
way forward for scholarly development. Beyond using sustainability
as a context or target for innovation, we ask scholars to be even more
ambitious in their attempts to theorize and conceptualize IfS, as well
as developing interdisciplinary action research-based approaches. For
instance, recent attempts draw from circular design principles and com-
bine those with a business model approach from management studies
to advance understanding of circular economy transitions (e.g. Bakker
et al. 2014; Bocken et al. 2016; den Hollander et al. 2017).
All in all, we have sought to contribute with a book that crosses top-
ics, disciplines, as well as business and academia. We hope it will open
up further debate and spur action to resolve our world’s most pressing
challenges through the lens of Innovation for Sustainability.
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Part I
Systemic View—the Big Picture
Introduction
There is a strong promise and potential of innovation for sustainability.
It includes themes such as sustainable business models (Boons and
Lüdeke-Freund 2013; Bocken et al. 2014), sustainability-oriented inno-
vation (SOI) (Adams et al. 2016), sustainability transitions (Markard
et al. 2012), and shared value (Porter and Kramer 2011). The common
thread in many of these discussions is the hope that the private sector,
together with other organizations and institutions, can develop solutions
that resolve the grand challenges, such as climate change, social inequal-
ity, and environmental degradation. As firms control most of the pro-
ductive resources globally available (Porter and Kramer 2011), it makes
sense to look for answers to sustainability problems from the innovative
pursuits and new technologies pushed forward by companies.
P. Ritala (*)
Lappeenranta University of Technology,
Lappeenranta, Finland
e-mail: [email protected]
© The Author(s) 2019 21
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_2
22
P. Ritala
and does not necessarily reflect the worldview of the cited authors and
works, nor represents the state of the art in its entirety. In any case, this
categorization helps to explicate the different potential stances towards
innovation for sustainability. It purposefully contrasts scepticism and
idealism as the extreme positions, while the “middle road” of pragma-
tism adopts less normative stances and focuses on the contextual heter-
ogeneity and diversity of the topic as it appears in the empirical reality
(on pragmatism, see, e.g., Almeder 2007). Table 2.1 summarizes them
up-front, and more detailed discussions ensue in the following sections.
are not only possible but also are effectively adopted globally in different
industries and contexts.
From an economic viewpoint, the idealist perspective includes the
idea that sustainable innovation and sustainable business models will
outpace other alternatives given the superior value propositions to mul-
tiple different stakeholders (Schaltegger et al. 2012; Boons and Lüdeke-
Freund 2013). This, in turn, leads to system-wide improvements in
different facets of global sustainability. In the idealist perspective, even
the idea of degrowth might be possible in some segments of the econ-
omy. Degrowth refers to “equitable downscaling of production and
consumption that increases human well-being and enhances ecologi-
cal conditions at the local and global level, in the short and long term”
(Schneider et al. 2010: 511). For instance, Hueting (2010) points out
that there is no fundamental conflict between employment and the
environment, as “the production and consumption of the same amount
of goods require more labour with safeguarding the environment than
is required without” (p. 529). Further, it is obvious that less material
production is beneficial to ecological systems. However, degrowth in
itself is a highly contested issue and stands against many of the main-
stream economic practices that rely on rising production and overall
gross domestic product (GDP) growth (for discussion, see, e.g., Jackson
and Senker 2011; Van den Bergh 2011). Therefore, alternatively, pol-
icies and practices could be directed towards growth that is non-
resource-consuming (e.g. intangible services and knowledge-based value
creation) and therefore, would not contest mainstream economic ideas
of the importance of growth. However, in an ideal world, both types of
economic development (degrowth and sustainable growth) could take
place in different contexts.
In environmental terms, the idealist perspective offers the promise
of innovation and technological development as a solution to ecologi-
cal challenges. For instance, Falk and Ryan (2007) argued that moving
towards more innovations driven by information and communication
technology (ICT) will create more possibilities for smarter production
and consumption, and more intangible value creation in general. Other
authors expect that the progress in solar and other renewable energy
technologies will accelerate to such a pace that these technologies could
30
P. Ritala
Conclusion
Viewing the global economy as a complex adaptive system (Beinhocker
2006) allows a reflective, system-level examination of innovation for
sustainability. In this chapter, I discussed the sceptical, pragmatic, and
idealist perspectives on how sustainable innovation has been viewed,
and what types of system-level implications are involved. The sceptical
perspective relates to pessimism about businesses and the overall capi-
talist system to provide enough incentives for SOI. Here, firms’ actions
follow profits, and often, the trade-offs among economic, environmen-
tal, and social issues tend to tilt to the advantage of the first one. The
pragmatic perspective avoids the normative stances and embraces heter-
ogeneity among the broader system or actors, technologies, and institu-
tions. Local differences in sustainability aspirations and capabilities are
2 Innovation for Sustainability: Sceptical, Pragmatic …
31
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34
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Introduction
Over the last few decades, a growing number of organizations have
embarked on a path in which sustainability has become a core innovation
driver (Boons and Wagner 2009; Hart and Milstein 2003; Nidomulu
et al. 2009). The growing attention paid to sustainable development,
earth system impacts and planetary boundaries (e.g., climate change, nat-
ural resource scarcity and pollution) has turned the focus to innovation
for sustainability (IfS) (Blowfield et al. 2007) as a means to solve soci-
etal and environmental challenges (Tukker 2005) while bring to the
markets new sustainable products and services (e.g., renewable energy)
L. Albareda (*)
Lappeenranta University of Technology, Lappeenranta, Finland
e-mail: [email protected]
A. Hajikhani
VTT Technical Research Centre of Finland, Espoo, Finland
e-mail: [email protected]
© The Author(s) 2019 35
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_3
36
L. Albareda and A. Hajikhani
(Adams et al. 2016; Boons and Lüdeke-Freund 2013; Bocken et al. 2014),
fostering system-wide changes (Inigo and Albareda 2016) and transform-
ing economic and industrial systems toward sustainable development (e.g.,
circular economy) (Gladwin et al. 1995). Many companies are increasingly
changing the way they innovate, fostering integrated economic, social and
environmental value creation (Elkington 1997; Klewitz and Hansen 2014)
and, therefore, enhancing sustainability system transformation (Geels 2010),
including new forms of sustainable business models (Bocken et al. 2014).
In this chapter, we focus on the growing literature on IfS over the
last two decades (Hansen and Grosse-Dunker 2013). We present a bib-
liometric literature review to illustrate how complex research in this area
has spread across fields of research including innovation management,
economics, environmental engineering, environmental sciences and ecol-
ogy. We expand previous literature reviews (Adams et al. 2016; Bocken
et al. 2014; Boons and Lüdeke-Freund 2013; Inigo and Albareda 2016;
Nidomulu et al. 2009), providing an in-depth understanding of how IfS
research issues and themes are organized in five key goal-oriented discus-
sions. Following a review of the core literature, we propose a bibliometric
analysis to study the impact of this literature over time and its dissemi-
nation across other academic research fields in the peripheral literature.
The core literature includes the initial research on IfS and the seminal
concepts, while the peripheral literature includes research that has crossed
the original research parameters as well as other broad empirical analyses
(Small 1973).
collaborative and systemic IfS. This analysis also comes after prior sys-
tematic and integrative literature research analysis done by Adams et al.
(2016), and Inigo and Albareda (2016). The second part studies the evo-
lution and dissemination of the IfS concept in the broader scientific and
academic debate (Glänzel 2015). We conducted a bibliometric data anal-
ysis using the Network Analysis Interface for Literature Studies (NAILS)2
toolkit, designed in August 2015 by a part of our research team (Knutas
et al. 2015). The NAILS statistical and Social Network Analysis (SNA)
on bibliometric data has been featured in concept emergence and dis-
semination (Hajikhani 2017) and patent portfolio comparative analyses
(Ranaei et al. 2016). We applied a four-step process as follow:
Strategic IfS
Operational IfS
Operational IfS is the second main discussion. Operational IfS studies how
businesses transform operational processes into more eco-efficient proce-
dures (WBCSD 2000). Operational optimization aims to change produc-
tion systems to integrate new process-oriented knowledge and tools (e.g.,
eco-efficiency, sustainable life-cycle assessment and environmental manage-
ment) across the whole value chain (Adams et al. 2016; Carrillo-Hermosilla
et al. 2010). Operational IfS involves three main challenges (Inigo and
Albareda 2016). The first is ensuring sustainability across the whole life
cycle and value chain, adopting waste management, industrial symbiosis
and circular economy approaches (Sharma and Iyer 2012). The second is
based on product and service design, including eco-innovation and eco-
design (Pujari 2006). The third is improving performance, adopting envi-
ronmental management systems, impact minimization technologies and
re-designing processes (Boons et al. 2013; Schaltegger and Burritt 2014).
Research on operational IfS mainly began with eco-efficiency
(Ehrenfeld 2005; Hellström 2007; WBCSD 2000), fostering environ-
mental efficient innovation tools and activities to include environmen-
tal impacts on company operations (Hansen et al. 2009; Harms et al.
2013). Eco-efficiency is a management approach that encourages busi-
nesses to search for environmental improvements that finally lead to
integrated ecologic and economic benefits and foster new ways of doing
business by integrating environmental and economic value creation
(WBCSD 2000: 4). It goes beyond incremental efficiency, transforming
operations with new systemic tools and strategies that promote radical
and sustainable process innovation, affecting the entire life-cycle assess-
ment across value chains and the industrial and innovation ecosystem
(Chertow and Ehrenfeld 2012; Wagner 2008).
All of these changes connect eco-innovation (Del Río 2009), which is
framed under different disciplines, technological change, systems analysis
and operations research, industrial ecology and industrial economics (Del
Río et al. 2010). Eco-innovation aims to change the environmental per-
formance of consumption and production activities (Kemp et al. 2007).
Early on in this century, eco-efficiency and eco-innovation have expanded
to include: sustainable product innovation (Clark et al. 2009), eco-design
3 Innovation for Sustainability: Literature Review …
41
Organizational IfS
Collaborative IfS
The fourth core discussion is based on IfS’ collaborative nature with dif-
ferent societal and environmental partners and stakeholders (Nidomulu
et al. 2009). IfS requires multiple partnerships and collaborative alli-
ances between the company and technological partners but also with
social and environmental stakeholders (De Marchi 2012; Goodman
et al. 2017). Successful IfS becomes increasingly collaborative (Ghisseti
et al. 2015). Furthermore, social and environmental stakeholders
become key partners (Ayuso et al. 2011) through the adoption of new
platforms and knowledge sources to stimulate creativity and overcome
sustainability challenges (Ayuso et al. 2006). IfS also includes different
dynamics such as design-thinking and co-creation workshops (Senge
et al. 2008), root innovation (McGowan and Westley 2015), stake-
holder dialogue (Ayuso et al. 2006), value-mapping (Bocken et al.
2013), supplier co-creation, user-focus innovation, societal c o-creation
(Hansen and Spitzeck 2011), social bricolage (Di Domenico et al.
2010), sustainable business models (Richter 2013) and reverse innova-
tion (Govindarajan and Ramamurti 2011).
In this sense, collaborative IfS connects to three main challenges
(Inigo and Albareda 2016). The first is to respond to public policies
and new regulations (Horbach et al. 2012). The second is connected
to how companies participate and co-create with local IfS networks
and clusters, including industrial symbiosis (Paquin and Howard-
Greenville 2012) and circular economy initiatives (Geissdoefer et al.
2017). The third challenge connects IfS to open innovation and how
to build new partnerships (Ghisseti et al. 2015; Senge et al. 2008),
including with new R&D partners and research centers (Chen and
Hung 2014).
3 Innovation for Sustainability: Literature Review …
43
Systemic IfS
Bibliometric Analysis
In this section, we investigate the five discussions within core IfS
publications over the years, their dissemination and citations, their
time-evolving impact in other fields of research in the peripheral liter-
ature. We also analyze sustainable business theory as a main source for
the dissemination of IfS literature.
Time-Evolving Impact
2500
Operational
innovation Sustainable business theory
10% Organizational System innovation
innovation
6% Strategic innovation
2000 Collaborative innovation
Collaborative
innovation Organizational innovation
4%
Operational innovation
Total
Sustainable Strategic
1500 business innovation
Sum of Times Cited
theory 16%
60%
System
innovation
4%
1000
500
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Year of Recieved Citation
Fig. 3.1 Core literature citations received for the 5 key IfS discussions over time
discussion categories detailed above and show how it has expanded over
time (see Fig. 3.1).
Core literature: Fig. 3.1 clearly indicates that the total citations
received by the core literature in the five key IfS discussions have grown
exponentially, featuring a sharper increase since 2006. Our research
illustrates how papers on sustainable business theory achieving a 60%
impact based on citations. Regarding the five main IfS discussions, the
strategic and operational discussions are driving 26% of the impact
and dissemination. The strategic IfS discussion is the most important.
It includes the main seminal papers on strategy and IfS, sustainability
and value creation and proposes the main concepts such as sustainable
value creation, sustainable entrepreneurship and the bottom-of-the-
pyramid approach. Operational IfS is also very important as it includes
broad research on eco-efficiency, eco-innovation and life-cycle analysis,
including the main empirical papers. Organizational and collaborative
IfS discussions started later and have become more accepted within
the academic community much more recently. Consequently, their
impact through citations is smaller. Organizational IfS has recently had
3 Innovation for Sustainability: Literature Review …
45
140
120
120
Core
VOLUME OF PUBLICATIONS
103
100 Periphery
80
66
60
49
40
30
19
20 14
810 6
4 5 5 5
1 1 2 2 1 1 31 1 2 21 1 24 24 2 3 1
0
1995
2011
1987
1988
1989
1990
1991
1992
1993
1994
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2012
2013
2014
2015
2016
2017
YEARS
Fig. 3.2 Time series for core and peripheral literature publication numbers
46
L. Albareda and A. Hajikhani
We also measured the impact and influence of IfS through its dissemi-
nation in other fields. We calculated the accumulated citations of each
article in both the core and peripheral literature and tabulated them for
the subject categories. Figure 3.3 represents the impact of the categories
studied in core and peripheral literature by citation points. It is clear
that, while there is an obvious overlap of the subject categories among
core and peripheral literature, we can see a shift in subject categories.
The peripheral literature shows a significant appreciation for new sub-
jects such as “Environmental studies, Management” and “Economics,
engineering, civil.” It is interesting to note that, while topics such as
“Economics,” “Management, planning & development” and “Industrial
engineering” in the core literature were highly cited, the peripheral liter-
ature hasn’t received the same attention citation-wise yet. However, on
subject categories such as “Green & Sustainable science & technology,”
“Management,” “Environmental studies, management” and “Business,”
180%(52)&,7$7,216:+,&+($&+),(/'5(&,(9('
%XVLQHVV0DQDJHPHQW
(FRQRPLFV
%XVLQHVV(QYLURQPHQWDO6WXGLHV0DQDJHPHQW
%XVLQHVV(WKLFV
%XVLQHVV3V\FKRORJ\$SSOLHG0DQDJHPHQW
:(%2)6&,(1&(68%-(&7&$7(*25,(6
%XVLQHVV(QJLQHHULQJ,QGXVWULDO0DQDJHPHQW
(QHUJ\ )XHOV(QYLURQPHQWDO6FLHQFHV(QYLURQPHQWDO6WXGLHV
(QYLURQPHQWDO6WXGLHV
(QYLURQPHQWDO6FLHQFHV(QYLURQPHQWDO6WXGLHV
(QJLQHHULQJ,QGXVWULDO
%XVLQHVV(QYLURQPHQWDO6WXGLHV
(QYLURQPHQWDO6WXGLHV0DQDJHPHQW
(FRQRPLFV0DQDJHPHQW
(QJLQHHULQJ,QGXVWULDO(QJLQHHULQJ0DQXIDFWXULQJ2SHUDWLRQV5HVHDUFK 0DQDJHPHQW6FLHQFH
(QYLURQPHQWDO6FLHQFHV
(QYLURQPHQWDO6FLHQFHV(QYLURQPHQWDO6WXGLHV*HRJUDSK\
%XVLQHVV(FRQRPLFV0DQDJHPHQW
3V\FKRORJ\$SSOLHG0DQDJHPHQW
Fig. 3.4 Most popular and cited publication venues for core and peripheral
literature
48
L. Albareda and A. Hajikhani
The most popular publication venues for the core literature include
Journal of Cleaner Production, Business Strategy and Environment, and
Ecological Economies, while the most cited publications are Academy
of Management Review, Journal of Economic Perspectives, and Harvard
Business Review. For the peripheral literature, the most popular publi-
cations are Journal of Cleaner Production, Journal of Business Ethics, and
Sustainability, while the top cited publication is Academy of Management
Journal, Journal of Cleaner Production and Journal of Business Ethics.
Conclusion
We have presented a bibliometric study that explores how IfS liter-
ature has grown and developed over the last two decades. The main
conclusion is that IfS core literature mainly comprises five key goal-
oriented discussions: strategic, operational, organizational, collaborative
and systemic IfS changes that frame the main topics and themes that
researchers study to understand the main transformations undergone
by businesses and organizations to embrace sustainable development
principles and systems-based transformation (Geels 2010). The litera-
ture analysis is based on previous research (Adams et al. 2016; Bocken
et al. 2014; Boons and Lüdeke-Freund 2013; Inigo and Albareda 2016;
Nidomulu et al. 2009), providing an in-depth understanding of how
IfS research issues and themes are organized. This bibliometric analy-
sis shows the differences on impact and citation between different dis-
cussions. IfS literature is strong on strategic and operational themes
that have been the two most impactful since 2002, including the main
papers and theoretical and conceptual references in IfS. Contrarily,
organizational, collaborative and systemic IfS discussions have emerged
and increased in the last few years. This is mainly due to the current
changes adopted by leading companies in IfS (e.g., Patagonia, Unilever)
with growing collaboration between companies and social and environ-
mental partners to build sustainable business models (e.g., slow fashion,
waste to management, social innovation), in addition to sustainability
transitions and societal change. In terms of the core literature, the two
key fields of research are business management and economics followed
3 Innovation for Sustainability: Literature Review …
49
Notes
1. Sustainability-oriented innovation, sustainable innovation, sustainability
and innovation, innovation for sustainable development, social innova-
tion, responsible innovation, green and eco-innovation.
2. http://nailsproject.net/ online interface.
3. WoS is maintained by Thomson Reuters and has 90 million documents
indexed. It is considered one of the most important databases for scien-
tific bibliometric data.
50
L. Albareda and A. Hajikhani
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56
L. Albareda and A. Hajikhani
Introduction
From the publication of the ‘Our Common Future’ by the
Commission headed by Gro Harlem Brundtland (WCED 1987), to
the operationalisation of the Sustainable Development Goals—SDGs,
onwards—(United Nations, G. A. 2015), the quest for social, envi-
ronmental and economic sustainability has been on the global agenda.
Leading businesses worldwide have directed their efforts towards the
development of new products, processes and business models that
minimise harm to the environment, improve social welfare and sus-
tain economic growth while creating value for the firm. Innovation
has proven to be one of the most effective strategies of businesses to
contribute to such sustainability goals (European Commission 2012;
OECD 2010); nevertheless, introducing environmental and social
E. A. Inigo (*)
Business and Management Organisation, Social Sciences Group,
Wageningen University & Research, Wageningen, The Netherlands
e-mail: [email protected]
© The Author(s) 2019 59
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_4
60
E. A. Inigo
Background
Innovation for sustainability, that is, innovation that aims to create not
only economic but also environmental and social value (Adams et al. 2016)
has become a cornerstone of the business sustainable development strat-
egy (Jay and Gerand 2015). Decoupling environmental degradation
and social erosion from economic growth is now a major goal in the
global agenda (UNEP 2011), and, as major actors of innovation, busi-
nesses have shown great ability to perform as levers in the transforma-
tion towards sustainability (Inigo and Albareda 2016). IfS is not solely
concerned with the consecution of social and environmental goals: the
importance of innovation driven by sustainability to improve compet-
itiveness has been noted by scholars and businesses (Nidumolu et al.
2009; Pfitzer et al. 2013).
4 Environmental Factors in Business Engagement …
61
Conclusion
In this chapter, we have explored how business organisations are related
to the economic, social and natural environments in which they are
embedded, and how changes in such environments affects their IfS
activities. There are three major degrees of change. In stable environ-
ments, whereby change is mostly guided by regulations and policies,
the firm must react to such changes; moreover, these may serve as a
steer and anchor for the company to direct its IfS. Therefore, vigilance
72
E. A. Inigo
systems that ensure that the company anticipates these changes are
essential. However, at so-called dynamic environments, compa-
nies adopt a more proactive role, for which they need to identify the
socio-environmental challenges in their surrounding environment and
acquire the necessary knowledge to tackle them through innovation,
very often in partnership with stakeholders. Finally, in the case of dis-
continuous change, those businesses that realise their engrailment in a
wider environment and work to grant resilience for the wider system
will thrive in their IfS activities.
In a nutshell, this chapter shows that, apart from working on inter-
nal capabilities, businesses must also look outside and adapt to the
main challenges in their environments to thrive and become more com-
petitive through IfS activities. This calls for further research on out-
ward-looking management of IfS, and how the relationship between
businesses and their external environment can help to sustain economic,
social and natural resilience.
This also has important implications for businesses. The research
shows that, to successfully engage in IfS, companies must keep looking
outside of the firm for new knowledge, new collaboration opportunities
and building networks that will help them to acknowledge the dynam-
ics of the system in which they operate. As environments become more
discontinuous, successful companies become proactive agents of change
for sustainability, maximising the impact not only for the firm, but also
for their environment.
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5
Circular Business Model Innovation
for Sustainable Development
Eva Guldmann and Rikke Dorothea Huulgaard
Introduction
The need for a transition to sustainable development has been
discussed for decades. In 1987, the World Commission on
Environment and Development published Our Common Future, which
emphasised the need for companies to support this transition (WCED
1987), and Elkington (1997) later suggested companies take a triple
bottom line approach in which equal attention is given to economic
prosperity, environmental protection and social equity, as a means of
providing such support.
Recent findings nevertheless suggest that the incremental improve-
ment of product and process designs that companies have engaged in
since then is insufficient to attain sustainable development (Abdelkafi
E. Guldmann (*) · R. D. Huulgaard
Department of Planning, Aalborg University, Aalborg, Denmark
e-mail: [email protected]
R. D. Huulgaard
e-mail: [email protected]
© The Author(s) 2019 77
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_5
78
E. Guldmann and R. D. Huulgaard
Theoretical Background
Circular Business Models
Circular services
Customer
Activities
relationships
Value Customer
Partners
proposition segments
Resources Channels
Cost Revenue
Business Experimentation
Research Design
A Multiple-Case Study
foundation (Orum 2015; Yin 2014) for the development of the model
for CBMI that is presented in Table 5.1. The model was derived from
an abductive interchange (Saunders et al. 2015) between the empir-
ical data from the multiple-case study and the literature presented in
the theoretical background and is thus the result of iterative cycles of
refinement.
Data was captured in a case study database (Yin 2014) containing
memos and minutes from our interventions at the companies, field
notes and documents (e.g. sustainability reports). In some companies,
these data were supplemented with formal interviews, and the collabo-
ration with the eight case companies has so far lasted between one and a
half and four years.
Case Companies
• a specific foundation for the CBMI process in the form of the exist-
ing business model, employees driving the CBMI process and the
sustainability strategy,
• a set of characteristics of the CBMI, i.e. the goal of the CBMI, the
type of experimentation that is conducted and internal and external
stakeholders involved,
• the type of CBM that is explored.
(continued)
87
Table 5.1 (continued)
Internal CBMI Hybrid CBMI Systemic CBMI
Involvement of internal and Focuses on internal dia- Focuses on internal collab- Engages internal and exter-
88
external stakeholders logue. Minimal value chain oration and/or dialogue nal stakeholders in the
partner involvement with trusted or new value experimentation. Focuses
chain partners on developing existing
collaboration with value
chain partners or establish-
ing collaboration with new
value chain partners
Explored types of CBM Internal CBM that incorpo- Hybrid CBM that incorpo- Systemic CBM that incorpo-
rates resource efficiency rates selected circular ser- rates improved circular ser-
improvements and recy- vices and/or product design vices and product designs
cling, for instance in the features into the business model
manufacturing process, The hybrid CBM comple- The systemic CBM aligns all
E. Guldmann and R. D. Huulgaard
thus narrowing and/or ments the existing business or most business model
closing resource loops model by closing and/or elements to close and/or
The internal CBM is imple- slowing resource loops slow resource loops in an
mented locally within the optimal way
company and does not
interfere with the core
business
5 Circular Business Model Innovation for Sustainable Development
89
Systemic CBMI takes place in companies that are already circular, but
where management is interested in improving the existing CBM. The
sustainability strategy is oriented at redefining and transforming com-
panies, so that they have a net positive impact and the company actively
pursues this objective. The CBMI process at the start-up, Better World
Fashion, illustrates systemic CBMI. The company manufactures jackets
from recycled leather and offers leasing and take-back services for the
jackets to resell them or recycle them into new jackets. The company
owners were eager to refine the existing CBM and open to experimen-
tation and collaboration. For instance, the company tested customer
acceptance of its existing products and business model at a music fes-
tival and collaborated closely with the manufacturer of the jackets to
develop the best selection and cutting methods for the recycled leather.
As a result of the continued CBMI, the company recently expanded the
product portfolio with bags and wallets produced from leather cuttings
from the manufacturing of jackets, thus expanding the value proposi-
tion and optimising profitability of the existing CBM. The new business
model is an example of what we term systemic CBM in which an existing
CBM is developed further with improved circular services and/or prod-
uct designs to close and slow resource loops in an optimal way.
Implications for Practitioners
The model for CBMI provides an overview of the innovation process,
which could be useful to both companies that are new to CBMI and
companies that are familiar with this sort of innovation. Practitioners
can thus apply the model to guide the CBMI process in a company,
and the first step is to clarify what the company’s current foundation
for CBMI is. The foundation corresponds to the point of departure and
organisation of CBMI process and the sustainability strategy in the model
and it indicates what type of CBMI is likely to be most relevant to the
company. Based on this categorisation, the model can inform what sort
5 Circular Business Model Innovation for Sustainable Development
91
Conclusion
A transition to sustainable development is supported by the develop-
ment and implementation of CBMs, but the needed business model
innovation process is challenging and not well described in the lit-
erature. The aim of the model for CBMI developed in this chapter is
to contribute to an understanding of how companies in different set-
tings can engage in CBMI. The chapter demonstrates that companies
can engage in three different types of CBMI, i.e. internal, hybrid and
systemic CBMI, and outlines the process characteristics of each type.
Recognising the differences between these CBMI types can be useful for
practitioners and scholars, who want to support companies in a transi-
tion to, or a refinement of, CBMs.
Acknowledgements The authors would like to thank all the case companies
for their participation in the research.
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Hultink. 2017. “The circular economy—A new sustainability paradigm?”
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94
E. Guldmann and R. D. Huulgaard
Introduction
Green growth and green economy are two key terms that describe a
recent sustainability paradigm aimed at linking growth in the private
sector with addressing increasing environmental problems and the min-
imisation of its impact on the ecosystem. Through so-called ecological
innovations (eco-innovations), a win-win situation of both job creation
(and hence growth) and environmental protection can be achieved.
While green growth has been criticised for being a repackaging, or a
J. Engelmann (*)
Institute for Technology and Resources Management in the Tropics and
Sub-Tropics, TH Köln - University of Applied Sciences,
Cologne, Germany
e-mail: [email protected]
M. Al-Saidi
Centre for Sustainable Development, College of Arts and Sciences,
Qatar University, Doha, Qatar
e-mail: [email protected]
© The Author(s) 2019 97
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Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_6
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J. Engelmann and M. Al-Saidi
sustainability”
101
102
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Conclusion
Green growth is a contemporary strategy for sustainable development
that encompasses a conceptual economic perspective, concrete growth
strategies and political initiatives linking economy to environment. Eco-
innovations hereby play a crucial role as one of the main tools for ena-
bling a transition to a green economy and are therefore a central and
constituent element of green growth. Specifically, eco-innovations rep-
resent the key strategy for achieving green growth through incentivis-
ing businesses creating economically viable and environmental sound
solutions.
In summary, innovative businesses are the important actors that
incorporate eco-innovations and spread their use to achieve resource
efficiency and eventual decoupling. The adoption of such innovations
on a wide scale is seen as a criterion for assessing businesses and indus-
tries that bear a great potential for supporting green growth. Many
countries worldwide have already started developing green growth strat-
egies, with concrete incentives such as pricing reforms, subsidisation
and entrepreneurship programmes aimed at priority industries with
high potential for green growth. This prioritisation of economically
viable and environmentally sound business solutions should also be
examined with regard to the viability of addressing social issues. Eco-
innovations represent a strategic growth option for many countries with
large ecological footprints and/or declining resource bases. However,
particularly in the context of developing countries, affordability of
products and services as well as the impacts of sustainability transition
on “less innovative” businesses are important considerations for public
policies. Often, governments choose to incorporate social welfare spill-
overs and distributional issues as additional criteria for their support of
green and innovative industries.
To conclude, the transition towards green economy cannot take place
without innovative businesses and a strong public engagement in read-
justing priorities and designing incentives. Such transition provides
opportunities for existing and new companies in adopting innovations
that produce a win-win situation in an ecological and economic sense
110
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6 Business-Driven Ecological Innovations in Green Growth Strategies
111
Introduction
Understanding the need for long-term survival and competitiveness
at different levels in society, a growing number of organizations aims
for sustainability. This implies the creation, delivery, and capturing of
all three dimensions of value (economic, social, and environmental)
as part of their business model (e.g., Boons et al. 2013; Bocken et al.
2014; Lüdeke-Freund et al. 2016). Innovation is an important means
to achieve sustainability and relates to the development of new products
and services, processes (production methods and procedures), technol-
ogies, organizational practices, and business models. Innovation is vital
for organizational survival and constitutes a significant source of com-
petitive advantage for organizations (Teece 2010; Gunday et al. 2011).
R. Verburg (*)
Faculty of Technology, Policy and Management, Delft University of
Technology, Delft, The Netherlands
e-mail: [email protected]
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R. Verburg
defined as the production of novel and useful ideas (Amabile et al. 1996)
and is often associated with individuals, whereas innovation tends to be
accomplished by groups, organizations, or societies (West 2002). Montag
et al. (2012) show that behaviors driving creative processes are an inte-
gral part of the role of R&D professionals. The emphasis on innovation
and creativity has a profound impact on the way organizations lead their
teams as command and control does not fit well with offering employees
the freedom to explore. Therefore, leadership is increasingly regarded as
an important predictor of innovation outcomes (Rosing et al. 2011).
Although innovation and creativity are very important areas of
inquiry, the empirical research on leadership and innovation is surpris-
ingly limited (see Anderson et al. 2014 for an overview). Only a small
percentage of leadership studies were conducted in R&D organiza-
tions or other contexts in which creativity and innovation outcomes are
central performance indicators (e.g., De Jong and Den Hartog 2010;
Gupta and Singh 2015). Research evidence, so far, suggests a link
between leadership and innovation outcomes in organizations. More
particularly, studies suggest that a transformational leadership style may
help stimulate innovative behavior in areas in which creative engage-
ment is important (Rosing et al. 2011).
The sense of purpose that an attractive vision of the future inspires, acts as
a powerful motivating force for those who share this vision.
Vision is what contrasts transformational leadership with other
forms of leadership such as transactional forms of leader behavior (Bass
1999). Transactional leadership views leader–follower interactions from
an exchange perspective. An effective transactional leader recognizes
what followers want to get from their work and tries to see that they are
rewarded with their desired outcomes if their performance warrants it.
The leader clarifies performance criteria, rewards meeting these criteria,
and takes action when correction is needed. As such, a transactional lead-
ership style can be effective in driving short-term meeting of performance
targets, but is not likely to be associated with innovation and creativity as
experimentation is not encouraged (Rosing et al. 2011). Also, the effect
of formal control on performance seems to be much stronger in stable
and standardized environments, than in knowledge-intensive firms. For
example, Horwitz et al. (2003) argue that knowledge-intensive organiza-
tions are usually more decentralized, networked, and flatter than tradi-
tional firms and therefore rely more on normative kinds of control than
on common command and control arrangements (Alvesson 2000).
Transformational leaders go beyond such cost-benefit exchanges and
both inspire and challenge followers to make the vision a reality (Bass
1999). The dynamics of transformational leadership involve joining in a
shared vision of the future and going beyond the self-interest exchange of
rewards for compliance (Bass 1999). By defining the need for change and
creating a new vision the leader can help followers see new possibilities.
Such leaders also stimulate followers to think outside the box and try out
new ideas or work methods if these would help to realize the vision.
Transformational leadership is a proactive rather than a reactive way to
lead. Earlier leadership models focused on how follower needs and other
contextual conditions determine leaders’ actions and leaders were mostly
seen as effective when they reacted effectively and thus complemented
the environment. Transformational leadership models describe how lead-
ers proactively change their environment and emphasize how they cre-
ate desirable conditions and affect change rather than merely respond
to followers or the context. Transformational leaders (when compared
to transactional leaders) have subordinates reporting greater satisfaction,
7 Leadership, Innovation, and Sustainability
121
In the last few years, concepts such as integrity, responsibility, and ethics
have prominently entered the field of leadership studies. Focusing on this
ethical dimension of leadership has gained popularity following the many
infamous cases of ethical misconduct by CEOs, such as Kenneth Lay
(Enron), Conrad Black (Hollinger International), and Scott Thompson
(Yahoo!) as well as ethical lapses of leaders beyond the business arena. In
older work, transformational leadership was described as containing an
ethical component, but more recently authors indicate such leaders may
have more or less ethical aims and there has been an increased atten-
tion for ethical behaviors of leaders more generally (Den Hartog 2015).
Studying the ethical dimensions of leadership is not new (see for instance
Kanungo and Mendonca 1996) and there are many different perspec-
tives which highlight the ethical dimensions of leadership, such as ethical,
authentic, spiritual, and servant leadership1 (see Table 7.1).
Table 7.1 Different leadership perspectives which highlight moral/ethical dimensions
Ethical leadership Leaders have a strong influence on ethical standards Treviño et al. (2003)
and act as ethical role models. Reward and punish-
ment are applied in order to promote ethical behav-
ior of followers
Spiritual leadership Values, attitudes, and behaviors that are necessary to Fry (2003)
intrinsically motivate one’s self and others so they
have a sense of spiritual survival/well-being through
calling and membership
Authentic leadership A process that involves positive psychological capacities Avolio and Gardner (2005)
as well as a highly developed organizational context,
which results in greater self-awareness and self-reg-
ulated positive behaviors on the part of leaders and
associates, fostering positive self-development
Servant leadership Demonstrated by empowering and developing people; Van Dierendonck (2011)
by expressing humility, authenticity, interpersonal
acceptance, and stewardship; and by providing
direction
7 Leadership, Innovation, and Sustainability
123
who are attracted to work at this firm and customers who will buy from
them. Older theory suggests that leaders can instill pride, gain trust, and
increase a sense of optimism and hope in followers through articulating
such a vision (Shamir et al. 1993), which should also be the case for sus-
tainable innovation.
Although transformational leadership could be an effective style for
encouraging sustainability, there is no clear research evidence (yet) for
this effect. Only few studies relate transformational leadership with sus-
tainability outcomes. A notable exception is the study by Tabassi and
his colleagues (2016) addressing the role of transformational leadership
behavior of project managers in sustainable construction projects in
Malaysia. They only found limited support for the direct relationship
between transformational leadership and sustainable performance meas-
ures. Other studies which highlight the importance of stakeholders and
both environmental and broader social concerns can be found in the
literature on corporate social responsibility (CSR). In this realm, the
empirical work by Waldman et al. (2006), who study the link between
CSR and CEO transformational leadership and intellectual stimulation,
is often cited.
However, CSR and sustainability are not the same, although they
are not often separated in studies. CSR is often defined as ‘the volun-
tary actions taken by a company to address economic, social, and envi-
ronmental impacts of its business operations and the concerns of its
principal stakeholders’ (Christensen et al. 2007: 352). Like the exam-
ple of Natural Evolution Foods shows, sustainability refers to business
that contributes to an equitable and ecologically sustainable economy
as their core mission and not so much to separate corporate social or
environmental initiatives. Despite their differences CSR and sustaina-
bility are often treated as the same. For example, in a study on leader
characteristics of newly appointed members of top management teams
in a large sample of US firms, Wiengarten et al. (2017) interchange sus-
tainability and CSR in the position titles of the officers and directors
in their sample. Although established firms may use sustainability labels
for their officers, a chief sustainability officer does not necessarily imply
sustainable leadership. This starts to beg the question: Is there such a
thing as ‘sustainable leadership’?
126
R. Verburg
Sustainable Leadership?
According to Ferdig (2007), sustainable leadership ‘reflects an emerg-
ing consciousness among people who are choosing to live their lives and
their organizations in ways that account for their impact on the earth,
society, and the health of local and global economies’ (p. 26). In this
definition, leadership is regarded as taking charge by individuals in gen-
eral, rather than being aimed at individuals who are responsible for a
business and its people (formal leaders). The former seems more related
to emergent (informal) leadership by any individual and not (as we
focus on in this chapter) limited to the leadership of those in manage-
ment and business ownership roles. In other words, individuals from
any background taking action to create awareness about sustainability
challenges in relation to the natural environment and society seem to
be key in much of the sustainable leadership work to date, rather than
focusing on the role of managerial leadership in sustainability and sus-
tainable innovation. The term leadership is probably used to underline
the importance of being proactive as an individual in order to pursue
sustainability goals rather than to be reactive or even complacent. This
is in line with the more general work on strategic proactive work behav-
iors that describe how employees might try to influence the organiza-
tional agenda, such as the aforementioned issue selling. The work by
Parker and Collins (2010) provides an overview of more such proactive
work behaviors that employees can show.
Steve Schein (2015) takes a more corporate perspective and applies
the term sustainability leadership in order to present the findings of 65
interviews with what he calls ‘global sustainability leaders’ of multina-
tional corporations, NGOs, and consulting firms. He presents illus-
trations of how such global sustainability leaders have shaped their
ecological worldviews, how they express these, and how they try to influ-
ence others through their expressions. He proposes a generally more col-
laborative approach to leadership with less control. In line with Ferdig
(2007) he also emphasizes the importance of collective wisdom. His
book relates to the nature and importance of ecological worldviews and
contains a number of remarkable examples of leadership within the con-
text of sustainability; however, his analysis does not reveal new insights
7 Leadership, Innovation, and Sustainability
127
Conclusion
The literature and work under the heading of sustainable or sustain-
ability leadership is growing but so far there is no consensus on what
this kind of leadership entails. The question what sustainable or sustain-
ability leadership means, is not so much a semantic discussion rather
than the result of different perspectives on sustainability in relation to
innovation and leadership. Some use sustainability leadership to better
explain the impact of leadership behaviors on sustainability initiatives
in organizations and regard it as part of the current developments in
128
R. Verburg
Notes
1. Some proponents of the servant leadership perspective tend to frame
servant leadership as positive and transformational leadership as nega-
tive. See, for example, Cater and Beal (2015) who claim that ‘servant
leaders (as opposed to transformational leaders) do not seek power, fame,
or self-interests (…) but aim to positively impact the employees and the
community above the pursuit of short-term profit’ (p. 29). Such state-
ments are problematic for several reasons. First, the theory on trans-
formational leadership does not indicate that such leaders are always
seeking power, fame, or self-interests. The theory is about how leaders
influence others in order to help attain (group or organizational) goals
and the theory is not about the motivations of people to become lead-
ers. Second, transformational leadership also stresses the importance of
positive impacts on employees by highlighting the role of individual-
ized consideration (i.e., treating each individual as valuable and unique),
intellectual stimulation (i.e., providing subordinates with a flow of chal-
lenging new ideas), and some authors even include the use self-sacrifice
in order to demonstrate (the leader’s) loyalty to the cause. Third, the
outcomes of any leadership style are not necessarily positive or negative.
Whether reaching a certain goal is positive or negative depends on the
perception of the different stakeholders within a specific context and as
the work on ethics in leadership shows the effects can differ for different
stakeholders. As such, the fact that servant leaders will positively impact
the employees and the community is a normative statement since ‘lead-
ership is in the eye of the beholder’ (Billsberry and Meisel 2009).
2. For more information see the following website: https://www.natu-
ralevolutionfoods.com.au/story/. There is also an interesting piece on
Natural Evolution Foods entitled ‘Going Bananas,’ which was published
in the Oct/Nov (2017) issue of the in-flight magazine of Rex Airlines
(Australia), 61–64.
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8
Leadership and Goal Setting
for Sustainable Innovation Projects
in Large Businesses
Ilka Weissbrod
Introduction
Ninety large businesses accounted for almost two-thirds of the global
industrial carbon dioxide and methane emissions between 1751 and
2010 (Heede 2014), therefore significantly contributing with these
greenhouse gas emissions to climate change. In order for humanity to
survive long term on planet Earth, safe planetary operating bounda-
ries have been defined (Rockström et al. 2009). Large businesses are of
utmost importance as contributors to the sustainable development that is
needed (Ashford et al. 2011; Geels 2011) to ensure that humanity stays
within these safe planetary operating boundaries (Rockström et al. 2009).
I. Weissbrod (*)
Leuphana University Lüneburg, Centre for Sustainability Management,
Lüneburg, Germany
e-mail: [email protected]
I. Weissbrod
Imperial College London, Centre for Environmental Policy, London, UK
© The Author(s) 2019 135
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Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_8
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I. Weissbrod
Methodology
I conducted exploratory research on the characteristics of radical sus-
tainability-oriented innovation in 2013–2014 through semi-structured
interviews. I asked the interviewee views on
This chapter draws on the responses of 9 practitioners who all were cur-
rent or past project leads, with explicit sustainable innovation respon-
sibility. In addition, data from 2 interviewees working, respectively, in
a sustainable innovation consultancy and on a substantial sustainable
innovation intrapreneurship project were included. The interviews were
conducted in the USA and the EU: either during innovation confer-
ences, in pre-arranged meetings or, on one occasion, over the phone.
Interviews lasted between 5 and 64 minutes each, were voice-recorded,
verbatim transcribed, uniformly formatted in a natural transcript struc-
ture (McLellan et al. 2003) and analysed in the qualitative software
analysis software ATLAS.ti, using Descriptive coding and In Vivo cod-
ing1 (Miles et al. 2014). The challenges and opportunities of leading sus-
tainable innovation projects presented in this chapter are based on the
themes that emerged from coding the interviews. A selection of quotes
highlights where there are differences and overlap between theory and
8 Leadership and Goal Setting for Sustainable Innovation Projects …
141
consequences, situations, and identities. What are the implications for prof-
its, costs, and sales in a business firm? ’ (March and Heath 1994: 207).
Applying this to Fig. 8.1, sustainable innovation leaders would pick out
a selection of the interconnected triple bottom line value creation fac-
tors, gather information and narrow down the uncertainty accordingly.
This ‘rational action’ approach is, however, rarely used in practice in
sustainable innovation projects with a high degree of uncertainty—or
even in conventional innovation projects exploring value propositions
outside the current product and service status quo (Van de Ven 1986).
‘Rational action’ decision-making (March and Heath 1994) and/or a
logical innovation decision structure (Bessant and Tidd 2015) are eas-
ily propositioned in theory, harder to implement in practice during
innovation projects that go beyond improving the existing product and
service status quo. This innovation practitioner clearly articulates this
gap between ‘rational action’ decision-making theory and practice. He
led a sustainable innovation project that set out to bring about societal
change at the systems level (Adams et al. 2016) in a developing market.
Look, many companies don’t have very structured formal processes, where
something matures from an idea to a concept note to a business plan to a
venture, like that very logical go/no go decision point structure. That’s the
way it ought to be done, but it’s not the way it’s done in most companies.
There may be a division that does that, but when you have outlier con-
cepts—they don’t fit into that structure.
Product Innovation Leader | Biotechnology Firm | 2014
research that asserts that new value creation requires emotional engage-
ment of sustainable innovation teams (e.g. Lampikoski et al. 2014).
The biotechnology firm innovation leader above uses the term ‘outlier
concept’ to describe innovation outside the existing product and service
development status quo within a business. Theory has, indeed, acknowl-
edged that a rational decision-making structure is unlikely under such
circumstances (Barrett 1998; Van de Ven 1986) because of what advo-
cates of ‘rule following’ critique as the ‘excessive informational and cog-
nitive requirements’ (March and Heath 1994: 221)2 needed during the
implementation of a ‘rational action’ decision-making process.
Certainly worth thinking about is, how do you foster that [creative inno-
vation ] culture effectively in that you have runaway creativity without
runaway tangents.
Blue Sky R&D Programme Leader | Multinational Technology Company |
2014
This innovation leader went on to explain that in his team, stating the goal
(of ‘providing affordable eye care in bottom of the pyramid countries’)
repeatedly during creative sessions and ensuring that the innovation goal
8 Leadership and Goal Setting for Sustainable Innovation Projects …
145
is pinned to the top of the digital team communication channel are two
mechanisms used to avoid runaway tangents. He conceded though, that
even with these mechanisms, he has to intervene repeatedly through
personal communication with some individuals within his team for
whom this is harder to achieve than for other team members.
can work in practice. One interviewee found, indeed, that one can
only work if the other is granted. He found that only in allowing
team members to discover personal sustainability meaning in a team
innovation goal, they collectively were able to change their corporate
innovation process.
I do work in a corporate structure and I know where I want to go, but get-
ting there is the hardest thing. I used to think that colleagues had to find
the same sustainability meaning in the innovation opportunity that I did,
and what I’m finding is that that’s not necessarily the case. People could
find 10 different things in the same thing to get to the same result. I’m
constantly working within a system that resists change, so even for some
people what might be a simple thing is sometimes quite hard and clear
goals help to overcome this challenge.
Industrial Design Leader | Luxury Interiors Manufacturer | 2013
These start-ups inside the company, they form tiger teams of different
functions and the tiger team stays with the construct to finish. We’ve
seen the biggest success coming from that same kind of model, we have a
CEO—whatever you call it, CEO, GM, Project Manager, Program Manager,
whatever, who takes it from start all the way to finish to the point where
they’re in market. So they’ve not only been involved with R&D but now
they’re in market, they’re learning and they’re taking it all the way to fol-
low-through (author note: all the way to commercialisation ).
High Impact Innovation Leader | Healthcare Technology Company | 2013
This approach was only taken within the ‘high impact’ innovation team,
where innovating to achieve social change in addition to change in the
marketplace (see Adams et al. 2016) was a key objective for the team
according to the interviewee.
identified as concern for ethics, morality, other people and power shar-
ing (Den Hartog 2015). Communication was also a component of this
ethical leadership definition: ‘the demonstration of normatively appro-
priate conduct through personal actions and interpersonal relationships,
and the promotion of such conduct to followers through two-way commu-
nication, reinforcement, and decision-making ’ (Brown et al. 2005: 120).
The corporate reality of changing team members is possible to accom-
modate in this two-way communication and power sharing, as this
blue-sky thinking innovation leader shares from his experience with
leading an experimental product innovation project in a technology
company:
Conclusions
This chapter set out to explore the key challenges and opportunities
for leadership and goal setting for sustainable innovation projects in
large businesses. The deceptively easy task of gathering information to
reduce uncertainty during innovation processes and to wisely allocate
resources (Fig. 8.1) is very challenging for the leaders of sustainable
innovation projects. The challenges presented were enriched by insights
from cross-sectoral business practitioner interviews. The chapter linked
8 Leadership and Goal Setting for Sustainable Innovation Projects …
151
Notes
1. March and Heath (1994) allude to the criticisms of both ‘rational action’
and ‘rule following’; the authors do not proclaim preference of one decision-
making approach over the other.
2. Chapter 18 ‘Experimentation for Sustainable Innovation’ provides
details on this method.
3. Descriptive coding assigns ‘labels to data to summarise in a word or short
phrase—most often a noun—the basic topic of a passage of qualitative text ’
(Miles et al. 2014: 74); In Vivo coding uses a word or phrase the inter-
viewee used to describe a text section (ibid.).
152
I. Weissbrod
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9
Exploring the Pitfalls of Systemic
Innovations for Sustainability
Nina Tura, Genevieve Mortimer and Antero Kutvonen
Introduction
Innovation plays an important role in the sustainability journey
(Lin and Tseng 2016; Silvestre 2015). Recent management literature
(e.g., Boons et al. 2013) advocates for firms to shift from a focus on a
linear supply chain toward systems building and engaging with external
stakeholders (Adams et al. 2016; Inigo and Albareda 2016; Medeiros
et al. 2014) to improve the entire system through accelerated and trans-
formative change (e.g., Nidumolu et al. 2009; Quist and Tukker 2013).
Taking the lead in shaping the market/industry transformation may
N. Tura (*) · A. Kutvonen
LUT University, Lappeenranta, Finland
e-mail: [email protected]
A. Kutvonen
e-mail: [email protected]
G. Mortimer
Climate-KIC Australia, Chippendale, NSW, Australia
© The Author(s) 2019 157
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_9
158
N. Tura et al.
(continued)
9 Exploring the Pitfalls of Systemic Innovations for Sustainability
163
Table 9.1 (continued)
164
(continued)
Table 9.1 (continued)
Challenge categories: theoretical The effects on innovation manage- Empirical insights
insights ment: empirical insights
Conflicting aims within and between firms
Conflicts for business timeframes Existing performance measures, Companies are impatient with waiting
decision structures and practices for results of sustainable develop-
Conflicts between actors’ perceptions
are geared for a shorter business ment initiatives (e.g., monetary
Increased complexity of networks timeframe. benefits) that are not visible in the
short term.
Interaction and communication Deciding between contradictory sus-
challenges tainability goals and opportunity Social and economic sustainability
costs hinders innovation actions. goals can be contradictory and the
Information and knowledge gap interpretation of responsibility may
challenges Increased dependency on suppliers
vary between actors (e.g., societal
and networks requires identifica-
actor and company representative).
tion and management of partners’
capabilities and involvement. In Companies and organizations need
global networks, geographical and active and knowledgeable partners
cultural gaps complicate matters to sustainability initiatives, but
further. higher level sustainability goals
are weakly implemented in many
Key literature sources: Boström et al. Focusing on internal business goals
companies.
(2015), Eccles et al. (2014), Gaziulusoy obstructs collaborative innovation.
and Brezet (2015), Hahn et al. (2010), There is a need to increase informa-
Communication challenges lead to
Lockett et al. (2011), Mignon and tion about possibilities for collab-
commercial uncertainties and an
Bergek (2016), Mylan et al. (2015), oration and innovation in terms of
inability to leverage sustainability
Roscoe et al. (2016), Quist and Tukker sustainability. Especially SMEs lack
innovations.
(2013) knowledge of what is being done in
Information and knowledge gaps other companies and universities.
hinder interorganizational learning
9 Exploring the Pitfalls of Systemic Innovations for Sustainability
Radical innovation
characteristics
Challenges of Structural
Challenges of
impediments: institutional
open innovation
misalignment
Opportunity
costs
Outcome uncertainties
Conclusion
Our study of 13 companies from seven industries showed that firms’
capabilities are yet to catch up with the unique demands set by systemic
innovations for sustainability. To acquire the appropriate capabilities, firms
should focus on building adaptive learning capacities and redesign pro-
cesses to accommodate extensive uncertainty and collaboration, e.g., by
integrating end users into innovation processes (Zimmerling et al. 2017).
9 Exploring the Pitfalls of Systemic Innovations for Sustainability
171
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10
Toward Smart and Sustainable Business
Models in Retail
Sveinung Jørgensen and Lars Jacob Tynes Pedersen
Introduction
The business models of the retail sector are under pressure. Several
factors force retail companies to think in completely new ways about
how to create, deliver and capture value: The sustainability challenges
associated with a massive footprint along global value chains both
related to resource usage and emissions; digitalization and automation;
disruptive innovations from new competitors; and evolving customer
preferences and lifestyles.
Three main drivers—the technological opportunity space, the sus-
tainability problem and expectations from customers—thereby drive the
development of new business models. Retail companies face substantial
S. Jørgensen (*)
Inland Norway University of Applied Sciences, Lillehammer, Norway
e-mail: [email protected]
L. J. T. Pedersen
NHH Norwegian School of Economics, Bergen, Norway
e-mail: [email protected]
© The Author(s) 2019 177
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_10
178
S. Jørgensen and L. J. T. Pedersen
Background
How many years will it take before we no longer own our own car, but
rather subscribe to a shuttle service based on a fleet of driverless cars?
How soon will we sit at home browsing social media through our vir-
tual reality goggles, looking at clothes that are digitally customized to
10 Toward Smart and Sustainable Business Models in Retail
179
us, and we will simply talk to our browser and ask it to order a garment
we like? Then, the garment is 3D printed and flown to our homes by a
drone that picks it up from an unstaffed warehouse, while payment is
executed automatically. When will we put our laundry in the washing
machine and the clothes will have sensors that tell the machine the gar-
ments’ washing instructions? For that matter: When will we be able to
order 3D-printed spare parts to our washing machines, which are 3D
printed and sent to us when needed? And how long until we get smart
LED light bulbs and other products for free because they are linked to
the Internet and are financed by generating valuable data about us to
companies that benefit from this information?
Such scenarios, which may feel like science fiction, are becoming
more science and less fiction. Just look at how quickly companies like
Alibaba and Amazon have built their gigantic ecosystems online, through
which they offer more products and services than what we thought pos-
sible only a short time ago. These technological changes are occurring
at record speed, and current business models must consequently change
rapidly (Teece 2010). The fourth industrial revolution is already ongoing
and involves an almost all-encompassing transformation characterized
by new technologies like artificial intelligence, robotics, the Internet of
Things (IoT), 3D printing and new materials (Schwab 2016). It further
comprises the emergence of autonomous vehicles, new forms of energy,
genetic engineering, nanotechnology and drones (see, e.g., Kelly 2016).
In parallel with these technological developments, online solutions
and platforms that bring together suppliers and demanders of goods
and services also challenge traditional business models (Parker et al.
2016). Moreover, new sharing-economic and circular-economic busi-
ness models deviate from conventional business thinking (see, e.g.,
Botsman and Rogers 2010; McDonough and Braungart 2010). Overall,
these trends point toward a comprehensive transformation of current
business models that imply new ways of producing, transporting, con-
suming and reusing materials, components and products. These smarter
business models can enable more efficient resource use and customiza-
tion of products and services in a way that can improve the offering to
customers while reducing the footprint thereof.
Business models with such characteristics are crucial for achiev-
ing a sustainable future (cf. Schaltegger et al. 2016). Managers in the
180
S. Jørgensen and L. J. T. Pedersen
The seven features build on the following logic: New business models
are emerging across all sectors, and redesign of business models reflects
10 Toward Smart and Sustainable Business Models in Retail
183
Conclusions
In this chapter, we have argued that there are indications that we can be
moving toward an economy in which the retail sector will have a smaller
footprint, higher resource efficiency, greater degree of digitization and
automation, greater transparency and traceability, and even greater
focus on the customer experience. Based on the trends and drivers we
have pointed out, we have argued that comprehensive changes in busi-
ness models are necessary in order to develop a sustainable economy.
We have argued that these comprehensive changes toward more sus-
tainable business models require what we denote a “RESTART” of busi-
ness models. Importantly, however, such a restart is not a uniform set of
measures—a “one-size-fits-all” recipe for all companies across all indus-
tries. Rather, the RESTART framework outlines seven avenues toward
more sustainable business models that to varying degrees can inspire or
shape future business models in different industries. While some com-
panies could benefit from innovating toward a more circular business
model that implies the reuse of materials and components in produc-
tion, others could for instance be inspired by service-logic to move from
an emphasis on the manufacturing and sale of physical products to digi-
tal services that solve the same problem for its customers.
Thus, the RESTART framework operates at a higher level of abstrac-
tion, in the sense that it brings together several different business mode-
ling trends and developments that may lead us toward more sustainable
business. As shown throughout the chapter, more in-depth analyses of
such business models (e.g., circular business models, service-based or
access-based business models) can be found in various strands of the lit-
erature on sustainable business and innovation.
The RESTART framework directs attention to the crucial interrela-
tionship between various aspects of such business modeling trends. For
instance, the transformation to business models based on access to ser-
vices rather than ownership of products will require a keen ability for
business model experimentation on the part of companies. Similarly,
it seems likely that the ambitious goals for a more circular future will
require cross-sector alliances through which companies can build
10 Toward Smart and Sustainable Business Models in Retail
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10 Toward Smart and Sustainable Business Models in Retail
191
Introduction
The world is facing social and environmental grand challenges that need
to be tackled, and businesses can play an important role in this process
as put forward in the introductory chapter of this book. To pursue sus-
tainability or a triple bottom line, companies should integrate environ-
mental and social considerations in their business models. These models
are the architecture of how companies create, deliver, and capture value.
To create sustainable value or shared value means that the business goal
is not just to create profit for the shareholders, but to generate value
for a broad range of stakeholders. Shared value is created through ‘pol-
icies and operating practices that enhance the competitiveness of a company
while simultaneously advancing the economic and social conditions in the
L. M. Dybdahl (*)
Nordic Institute for Studies in Innovation, Research, and Education,
Oslo, Norway
e-mail: [email protected]
© The Author(s) 2019 193
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Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_11
194
L. M. Dybdahl
Localism
At a general level, localism is a growing international trend focusing on
re-establishing communities and protecting and rebuilding local econ-
omies (Hines 2013). It is about encouraging local livelihood through
local production and consumption, and promotion of local identity.
Localism can be considered a counter-movement to globalisation which
has had economic, political, social, and ecological implications. Gray
(2015: 57) argues that globalisation has ‘uprooted activities and relation-
ships from local origins and cultures’ and calls it ‘de-localisation ’. Greater
involvement from local communities has also been a highlighted path to
promote sustainable development (ICLEI and IDRC 1996). Shrivastava
and Kennelly argue that the ‘grand project of sustainability will be given
effect in places ’ (2013). To illustrate the prevalence of localism, initiatives
such as Bioregional (Desai and Riddlestone 2002) and The Transition
Town Movement have been expanding internationally.
Hess (2009) argues that there has been relatively little academic
reflection about localism. Still, there has been related research across
various disciplines and different sectors, but not all this literature uses
the term localism. In the field of rural development, a ‘ new rural par-
adigm’ is a counterforce to global competition logics in which a place-
based focus embodies multifunctional agriculture and construction of
identities linked to new rural goods and services (Horlings and Marsden
2014). The argumentation is that places have become increasingly
‘place-less’ due to reinforcing processes such as disconnection of produc-
ers, suppliers, and consumers and the goods and services (ibid.). There
are also studies of local food systems (e.g. Marsden and Smith 2005;
Jervell and Borgen 2004). Such local systems are claimed to be more
sustainable since they have ‘tight feedback loops’ which reconnect con-
sumers, producers, and ecological effects and stimulates improvements
based on continuous feedback (Sundkvist et al. 2005). Another field,
economic geography, highlights that innovation depends on proximity
11 Business Model Innovation for Sustainability Through Localism
197
factors and that local knowledge and capabilities are important to build
sustainable competitiveness (e.g. Maskell and Malmberg 1999).
Taking localism down at a company level, it is useful to look at
the supply chain and operation management literature, as well as
publications in the field of corporate social responsibility. The out-
sourcing trend of the last decades has led to global supply chains
that often include many suppliers and, thereby, easily end up being
non-transparent. These supply chains can cover shady social and envi-
ronmental practices that leave the focal company busy with assuring
control of its suppliers. Supply chain management scholars highlight
that focal companies are increasingly held responsible for their supply
chain’s problems (Seuring and Müller 2008). The companies that have
outsourced to lower-cost countries have started to take into account
that lower costs are accompanied by ethical problems such as ‘poorer
labour conditions, less environmental protection, and lower attention to
health and safety protection ’ (Crane and Matten 2016: 412). Thus, as
corporate social responsibility scholars point out, outsourcing has been
increasingly linked to problems outweighing the imposed cost savings
(Carroll and Buchholtz 2012). As a result, the phenomena of reshoring
(or backshoring, onshoring) is becoming increasingly evident in busi-
ness practices (Fratocchi et al. 2014; Kinkel 2012) which refers to com-
panies deciding to relocate their manufacturing to their home country.
Sustainable enterprising research has been criticised for being ‘place-
less’, and that the relationship between companies and their sense of
place (knowing and caring about a place) should not be overlooked
when discussing the fostering of sustainable business behaviours
(Shrivastava and Kennelly 2013; Guthey et al. 2014). The argument is
that place-based enterprises ‘offer a potentially important means of foster-
ing ecological and social sustainability in local communities ’ (Shrivastava
and Kennelly 2013: 83).
In the recent years, the number of publications on the topic of local-
ism as an approach to sustainable fashion has been slowly growing
(e.g. Fletcher 2013; Black 2008). When discussing environmental stew-
ardship and sustainable sourcing in fashion, Quinn (2008) argues that
if a company wants to incorporate sustainability in its business, it must
start out with an understanding of what products are made of and how
198
L. M. Dybdahl
had a thriving textile industry based on wool, but this industry has
undergone a decline since the 1950s (Espeli 1997). While the nation
concentrated on building an oil-focused economy with high wages,
many textile manufacturers were forced to outsource or shut down,
leading to loss of jobs and industry knowledge (Hebrok et al. 2012).
Consequently, the current industry situation can be characterised as
incomplete from a supply chain perspective, and compared to other
OECD-countries, the nation’s textile and fashion industry has had little
industrial importance for many decades (Espeli 1997).
Findings—Localism’s Contribution
to Innovation in the Business Models
With few local manufacturing partners available in Norway, two of the
companies decided to invest in their own local factories. This implied
innovation both in value creation and value delivery in their business
models. Instead of doing design as the main business activity, they also
included manufacturing in their business operations. The companies
have experienced that in-house manufacturing stimulates innovation in
the product design and manufacturing process (e.g. better utilisation of
rest materials). To make the most out of the facilities, both expanded
their value creation by offering different services at the factory.
Company 1 offers manufacturing services to other fashion designers
who want to produce locally and is also experimenting with additional
services such as organising workshops for consumers in their factory
after production hours. Company 2 has included a textile museum, a
café, and a brand store in their facilities with the result of becoming an
attraction for both tourists and other kinds of visitors.
Company 3 is a design studio which consciously seeks differ-
ent local partners that can produce their designs. In their search, they
came across a local shoe factory. Through dialogue, it became clear
that the factory needed design expertise for the renewal of their col-
lection. Therefore, the design studio expanded its value creation by
offering design services and has experienced that this type of service
200
L. M. Dybdahl
pop-up stores
11 Business Model Innovation for Sustainability Through Localism
203
The local factories create local manufacturing jobs and keep alive tacit
industry knowledge. Company 4 also takes on fashion design appren-
tices to give them much-needed practical knowledge about clothing
production. All the cases argue that their efforts to localise are moti-
vated by their wish to help revitalise the national textile and fashion
industry. They point out that a strengthened industry generates tax reve-
nue which is shared value supporting the local welfare system. The over-
all effect is a contribution to building more resilient communities.
to the community (Darnall et al. 2010). The cases in this study are all
small companies where the managers, who also are the owners, seem
connected to their local community. However, that does not mean that
large or even multinational companies do not have a chance to pursue
localism. Porter and Kramer (2011) have proposed that the strongest
global corporations in the future will be the ones that have developed
a mutually beneficial collaboration with local suppliers and grown deep
roots in local communities.
There are also darker sides of localism that should be addressed.
When companies that pursue localism reshore their production, they
cause loss of jobs elsewhere in the world. For the developing coun-
tries, reshoring will have the same effects as outsourcing has had in the
developed world, closed businesses and factories with the result of lost
jobs and decreased tax incomes that negatively affect the local welfare
systems (Carroll and Buchholtz 2012: 558). What makes outsourcing
worse for the developing countries, is that the fashion and textile indus-
try can be one of the few employment opportunities for the population,
meaning that this is a stakeholder group that can experience negative
effects of the localism strategy. One should not overlook the unintended
consequences, calling for responsible considerations by the companies
that pursue localism. Responsiveness to stakeholders in the local com-
munity is good, but one should not forget to take international stake-
holders into account too.
Conclusion
This chapter has explored the innovation of business models for sus-
tainability through localism. The closer look at four Norwegian fash-
ion companies shows that localism appears to be a potential strategy to
build business models for sustainability. The various innovations in the
business models are mostly incremental, but in sum and over time, can
represent a substantial change in the companies’ business models.
The findings also reveal that localism can increase the chances of gen-
erating shared value of various forms, but it entails that the companies
must have a sensitivity to place and be rooted and embedded in its local
11 Business Model Innovation for Sustainability Through Localism
207
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Open Access This chapter is licensed under the terms of the Creative
Commons Attribution 4.0 International License (http://creativecommons.
org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution
and reproduction in any medium or format, as long as you give appropriate
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Commons licence and indicate if changes were made.
The images or other third party material in this chapter are included in the
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copyright holder.
12
Identifying Strategies for Sustainable
Entrepreneurship
Tero Rantala, Minna Saunila, Juhani Ukko and
Hannu Rantanen
Introduction
Entrepreneurial action has traditionally been embodied in people’s rela-
tionships with the material and social environment, and entrepreneur-
ship has always consisted of discovering an opportunity (Shane and
Venkataraman 2000). Sustainable business and sustainable entrepre-
neurship are continuously growing areas in modern society. Over the
last few decades, the deterioration of the environment and its conse-
quences for humanity have led to new government policies and changes
in the legislative framework for private sector activities and businesses
(Kiron et al. 2013). Although knowledge related to green innovation
and eco-innovation seems to be growing (Franceschini et al. 2016;
Schiederig et al. 2012), some notable gaps exist in our current under-
standing. For example, new innovation strategies are needed to sup-
port sustainable entrepreneurship. Oke et al. (2012) observed that little
attention has been paid to the conditions under which innovation strat-
egy execution is likely to be effective in enhancing innovation perfor-
mance and, consequently, firm financial performance. Further, there is a
lack of understanding of how different innovation strategies contribute
to sustainable entrepreneurship strategies. To develop a better under-
standing of sustainable entrepreneurship, this chapter provides insights
into (1) the utilisation of different sustainable innovation strategies
and (2) the valuation of environmental, economic, and social sustain-
ability factors in different sustainable entrepreneurship strategies. We
argue that if the content of sustainable entrepreneurship strategies can
be more precisely recognised and understood, then entrepreneurs will
be able to enhance their businesses by focusing on the factors (e.g. the
reduction of energy consumption, costs, and waste) that enable these
strategies.
This chapter contributes to this research gap by exploring the sustain-
able entrepreneurship strategies used among horse industry operators in
Finland. Although the sustainable entrepreneurship strategies explored
in this chapter are used in a single industry, we believe that the results
are useful for other industry operators as well as academics. At the prac-
tical level, the context of the horse industry is not significantly different
from that of other agriculture-related industries; therefore, we believe
that the results can be utilised by different decision-makers, agricultural
industry operators, horse industry operators, energy producers, and
many other stakeholder groups. For example, political decision-makers
can utilise the results by determining which factors they should con-
centrate on if they want to support certain sustainable entrepreneurship
12 Identifying Strategies for Sustainable Entrepreneurship
215
Sustainable Entrepreneurship
Sustainable entrepreneurship is a research area combining innovation,
entrepreneurship, and sustainability (Sarkar and Pansera 2017; Schaefer
et al. 2015; Schaltegger and Wagner 2011; Schaltegger et al. 2016). The
literature on the interplay between entrepreneurship and sustainable
development has addressed concepts such as environmental, social, and
sustainable entrepreneurship. Each type of entrepreneurship provides
a perspective on entrepreneurship as a process in which a business cre-
ates value beyond profit (Schaefer et al. 2015). Environmental entrepre-
neurship is motivated by earning money through solutions that solve
environmental problems, whereas social entrepreneurship deals with
achieving societal goals and securing funding (Schaltegger and Wagner
2011).
Sustainable entrepreneurship differs from environmental and social
entrepreneurship because sustainable entrepreneurship focuses on entre-
preneurial activities for sustainable development in a more comprehen-
sive way, such as creating offerings that address environmental, social,
and economic aspects simultaneously (Schaltegger and Wagner 2011;
Stubbs 2017). Sustainable entrepreneurship can also be defined from a
process perspective, which refers to the recognition, development, and
exploitation of entrepreneurial opportunities in the context of social and
environmental problems (Belz and Binder 2017; Lumpkin et al. 2013).
Similarly, Schaltegger et al. (2016: 268) defined sustainable entre-
preneurship as “a sustainability mission-driven process of solving
environmental and social problems of unsustainability by means of
the exploration and exploitation of market opportunities created
with innovative business models.” Bocken et al. (2014) divided these
216
T. Rantala et al.
Innovation Strategies
Over the past decade, societies and firms have become increasingly
aware of the environmental, economic, and social pressures their activ-
ities face, and, particularly during the last five years, research on green
innovation and its interplay with economic performance has expanded
to increase the current understanding of the ways in which new ser-
vices, technologies, and business models enable societies and individual
organisations to become more sustainable (Boons and Lüdeke-Freund
2013; Boons et al. 2013; Rizos et al. 2016). In the long term, the sus-
tainable development of firms requires the adoption of green innova-
tions. Such innovations can be more effectively developed and adapted
when they are built on business models (Boons et al. 2013) and suc-
cessful innovation strategies. Ireland et al. (2009) found that firms need
the right set of organisational factors that include strategy, resources,
and skills to successfully exploit the entrepreneurial spirit and improve
innovation performance. Thus, an innovation strategy adopted in
response to changes in nature and society will strategise and deploy
12 Identifying Strategies for Sustainable Entrepreneurship
217
Data Collection
The data for this research was gathered using an Internet-based survey
questionnaire in August and early September of 2016. The population
for this research comprises horse industry operators (cluster sampling,
see Zikmund et al. 2013) in Finland. In designing the questionnaire,
the extant literature was used to formulate the survey items (Delai and
Takahashi 2011; Khan et al. 2016; Mamede and Gomes 2014; Svensson
and Wagner 2015); thus, it may be considered tested and valid. The
questionnaire consisted of 18 questions, of which three were related to
the background information of the participants. Nine of the questions
were related to the participants’ current operations, two were related to
the current risks and cost risks of the operators, one was related to the
utilisation of sustainable innovation strategies (presented in Table 12.1),
and one was related to the individual sustainability factors behind those
innovation strategies (presented in Table 12.2); there were also two
open questions regarding future of the horse industry. An invitation to
12 Identifying Strategies for Sustainable Entrepreneurship
219
Measurements
their existing situation, and for that reason, they found environmental
sustainability factors to be the most important ones.
Concluding Remarks
This chapter identified four clusters that describe strategies for sustainable
entrepreneurship. The scientific novelty of this research lies in the descrip-
tion of the strategies entrepreneurs follow when they operate sustainable
businesses. Cluster analysis was applied to the selected sustainable inno-
vation strategies, and after that, clusters were identified based on groups
of variables: background variables (cost, firm size, and distance to large
industry operators), motivational factors (perceived risks and cost risks),
and sustainability factors (environmental, social, and economic).
Based on the distinct patterns within the clusters exhibited by these
variables, the clusters were labelled as follows: (1) Trailblazers (solution-ori-
ented innovators with a comprehensive sustainable entrepreneurship strat-
egy), (2) Ride Sharers (business-oriented, positive-thinking developers),
(3) Cost Cutters (problem-oriented operators with a cost-cutting innova-
tion strategy), and (4) Risk Avoiders (environment-oriented current state
stabilisers). By identifying these clusters, this chapter contributes to the
growing stream research on the connection between sustainable innova-
tion and sustainable entrepreneurship.
As presented earlier in this chapter, many sustainable innovation
options could be integrated into horse industry entrepreneurs’ existing
core businesses. One of the most interesting current options support-
ing renewable energy and nutrient recycling is biogas production. In
biogas production, waste (e.g. horse manure) is utilised as an input in
a biogas plant, creating process outputs (biogas and digestate) that can
be utilised as energy or materials for soil improvement. To use sustaina-
ble innovations related to biogas production (e.g. technologies or input
delivery services), horse industry entrepreneurs may need to facilitate
collaboration among their operations. This is because the required level
of investment might be too great for one or two entrepreneurs, and bio-
gas plants might need more of the process input (horse manure) than
the amount produced by a few entrepreneurs’ operations. The cluster
12 Identifying Strategies for Sustainable Entrepreneurship
225
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Part III
Measurement and Assessment of
Sustainable Innovation
Introduction
Many argue that innovation is becoming increasingly important for
both long-term survival and growth in intensely competitive and uncer-
tain environments (Gunday et al. 2011; Rennings 2000). In the light
of increasing consumer awareness, tightening government regulations
and growing stakeholder expectations in respect of sustainable develop-
ment, management of innovation oriented to sustainability (or sustaina-
ble innovation) is becoming an important issue for both companies and
policy makers (Adams et al. 2016; Doran and Ryan 2016).
N. Gunarathne (*)
Department of Accounting, University of Sri Jayewardenepura,
Nugegoda, Sri Lanka
e-mail: [email protected]; [email protected]
N. Gunarathne
Department of Business Strategy and Innovation,
Griffith University, Brisbane, QLD, Australia
© The Author(s) 2019 233
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_13
234
N. Gunarathne
Sustainable Innovations
Understanding what constitutes sustainable innovation is essential for
developing any system for its assessment or measurement. In the extant
literature, two similar terms have been largely used interchangeably
though their exact meaning is not the same. They are: eco-innovations
(sometimes interchangeably referred to as green, ecological and environ-
mental innovations) and sustainable innovations (sometimes referred
to as sustainability-oriented innovations) (Adams et al. 2016; Rennings
2000). Eco-innovations primarily focus on the environmental sustain-
ability pillar of sustainable development. On the other hand, sustain-
able innovations1 include environmental innovations and additionally
incorporate societal dimensions alongside environmental and economic
aspects (Adams et al. 2016; Calik and Bardudeen 2016).
Irrespective of whether it is an eco-innovation or sustainable innova-
tion, it is not a prerequisite for them to be motivated primarily by envi-
ronmental or social improvements (Carrillo-Hermosilla et al. 2010).
They could also be a by-product of an economic motivation to reduce
236
N. Gunarathne
These challenges are discussed below. The first challenge is related to the
conventional problems of measuring the performance of innovations.
As Calik and Bardudeen (2016) suggest, measurement of even nor-
mal/standard innovation, let alone sustainable innovation, is difficult.
Second are the challenges to the measurement of sustainability since
what is meant by sustainability and how it can be achieved are uncertain
(Adams et al. 2016). The third challenge is the still unresolved problems
associated with the traditional performance measurement of any organ-
ization, system or product. Since these measurement challenges are
integrated, it is difficult to isolate them for discussion. Therefore, this
section discusses these challenges without specifically referring them to
their source of origin. These measurement challenges have to do with
the identification of what constitutes sustainable innovations, identifica-
tion and quantification of performance indicators, problems associated
with the determination of system boundary and suitable time periods
for measurement and performance comparisons. The rest of this section
provides a critical discussion of these challenges while suggesting some
practical remedies.
One of the first challenges that impede the measurement process is
to identify sustainable innovations. Similar to other innovations, sus-
tainable innovations lack a standard definition (Kesidou and Demirel
2012; Boons and Lüdeke-Freund 2013). An accepted definition or
a framework such as the OCED (2009) typology can be a useful
13 Sustainable Innovation Measurement: Approaches and Challenges
241
ment and performance comparisons tion performance. Transdisciplinary E.g., Consideration of sustainability
nature of sustainability impacts only at department level
Maintaining a right mix of accuracy
and practicability in the process of
measurement
N. Gunarathne
Determination of the suitable time Long-term nature of the impacts of Use of a reasonable time period for
period for measurement sustainable innovations performance measurement
Problems in deciding ex-post or E.g., Use three years rather than only
ex-ante focusing on one year in sustainable
agriculture innovations
Use of time value of money tech-
niques and apply them ex-ante and
ex-post
E.g., Net Present Value (NPV) or
Internal Rate of Return (IRR) in a full
life cycle analysis
Benchmarking of sustainable innova- Differences in the industries, compa- Develop a set of core and supplemen-
tion performance nies or even departments (system tal indicators
boundaries) E.g., Use of core indicators for compar-
ison and supplemental indicators to
capture the differences
13 Sustainable Innovation Measurement: Approaches and Challenges
247
Conclusions
Sustainable innovation measurement remains at a rudimentary stage.
This chapter aimed to discuss the approaches, challenges and possible
solution for the measurement of sustainable innovations and innovation
performance. The challenges and issues rooted in the measurement of
sustainability, innovations and traditional performance pose a number
of challenges to sustainable innovation performance measurement.
The discussion provided in this chapter has several implications for
practitioners and researchers. The lack of a common source of informa-
tion acts as a deterrent for researchers and practitioners to get an over-
view of this field and it in turn “limits research, education and training
in this subject area, and hence limits practical experimentation and
implementation in industry” (Bocken et al. 2014: 44). For practitioners,
it is pertinent to understand that sustainable innovation measurement
process is a dynamic learning process that informs decision-making
rather than an end in itself. Once a small set of KPIs are established
and agreed on (some possible examples are presented in Table 13.2), a
248
N. Gunarathne
Notes
1. Sustainable innovations are “any new or significant improvement of prod-
ucts, services, technological or organizational processes, commercialized
or internally implemented that not only provide economic benefits but
also generate positive social and environmental impacts” (Calik and
Barbudeen 2016: 449).
2. According to the Oxford Dictionary (2018), performance is “a task or
operation seen in terms of how successfully it is performed” or “the capa-
bilities of a machine, product, or vehicle [or innovation]”. Hence, the
definition we choose for sustainable innovation performance is consist-
ent with the traditional literal meaning of the term.
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Introduction
In a globalised world in which small changes can easily cause immense
positive or negative impacts, the creation and diffusion of sustainable
business models (SBMs) is a timely topic of increasing interest (Boons
et al. 2013; Maltz et al. 2016; OECD 2012; Schaltegger et al. 2016).
The SBM itself, with its overall claim to improve the economic, social
and environmental value creation, is also subject to innovation (Inigo
et al. 2017; Yang et al. 2017). That is because improving sustainability
implies change and innovation (Evans et al. 2017) not only through
innovations in technologies, products or services (Girotra and Netessine
2013) but also by embedding social and environmental goals in the
whole business model (Schaltegger et al. 2012).
In line with Evans et al. (2017), we argue that an impact assessment
of the SBM is needed to explore the various ways that business model
innovations can lead to improved economic, social and environmen-
tal performance. However, the impact assessment of SBMs is a subject
matter which has not yet been fully clarified. In a recent publication
on business model assessments, the authors stated that “management
approaches for the assessment and management of business models and their
innovation as a means of corporate sustainable development are currently
not available ” (Lüdeke-Freund et al. 2017: 170–71). In addition, Boons
and Bocken (2017: 46) argued that ecological impact assessments of the
SBM have fallen short when a consideration of “business models as enti-
ties in themselves, with scant attention given to the context in which they
occur ” is made. In addition, Evans et al. (2017: 604) stated that “many
metrics are still under development (e.g., local water stress) or not well
understood (e.g., wellbeing, biodiversity).”
In the course of this discussion, this book chapter has been written
to contribute to this debate by presenting a detailed set of propositions
regarding impact assessment on the corporate business model level,
which can guide future research. This approach has been chosen as, thus
far, the results obtained by research have been ambiguous, and the dis-
cussion about the impact assessment of SBMs is fragmented. Thereby,
the book chapter undertakes a synthesis of insights into SBM research
and sustainability impact assessment. Four normative propositions are
made to clarify the ongoing debates about the impacts of SBMs and
form a basis to guide future research. The research question that directs
Model Canvas
Which assessment Which Does the Does the Does the Does the Does the Does the relevant assessment Does the relevant assessment
method is chosen? level relevant relevant relevant relevant relevant method focus on qualitative data? method focus on quantitative
does the assessment assessment assessment assessment assessment data?
relevant method method method method con- method
assessment consider consider consider sider (rather) consider
method social environ- financial short-term (rather)
R. Rauter et al.
Note LCA = Life Cycle Assessment; MIPS = Material Input Per Service; TQ(E)M = Total Quality (Environmental) Management. – = not applicable; (√) = partly applicable; √ = applicable
14 Assessing the Impact of Sustainable Business Models …
259
Summary and Conclusion
A sustainable business model serves as depiction of a company’s activ-
ities regarding value creation, delivery and capture. As such, a SBM
integrates sustainability by improving the economic, social and ecolog-
ical performance of the respective organisation. Such an improvement
implies that change in any of the elements of a SBM occur or leads to
the creation of a completely new business model (Chesbrough 2010;
Foss and Saebi 2017). In this context, the definition of the (sustainable)
value proposition offered by the company is central, since the company
determines the value delivered to customers and other primary and sec-
ondary stakeholders through the decisions made about its products and
services (Schaltegger et al. 2012; Boons et al. 2013). This determina-
tion of a sustainable value proposition and its innovation would ideally
be linked to the SBM impact measurement, meeting the requirement
of not only being new—as compared to the status quo and a relevant
reference—but also leading to environmental and/or social benefits
(Boons et al. 2013; Breuer and Lüdeke-Freund 2017). While the impact
assessment of SBMs is challenging both for scientists and practitioners,
its successful application is highly relevant and needed. In the light of
this, we have described four detailed propositions and provided exam-
ples in which we link the field of sustainability assessment to SBMs (see
Table 14.1). The four propositions highlight the requirements for and
potentials of such SBM impact assessments from a theoretical point
of view. Practically, in the end, such SBMs would cause fewer negative
impacts or even positive impacts compared to existing SBMs.
To make decisions about designing and implementing such SBMs,
decision-makers need to be informed and provided with relevant tools.
In the absence of “a clear measurement system for the (…) value crea-
tion potential of SBMs ” (Evans et al. 2017: 604), existing sustainability
assessment tools (Table 14.1) could serve as starting points of high prac-
tical relevance. This representation also highlights the need to measure
economic, social and economic performance. Although the results of
our research have natural limitations, they can serve as a foundation for
future research by linking the debate of SBMs, its impacts and inno-
vations to findings reported in the sustainability assessment literature.
14 Assessing the Impact of Sustainable Business Models …
263
Despite the fact that it is not possible at this time to provide a clear
and final answer to the question of whether the impact of a SBM is
measurable, an approach to do so has been developed. While norma-
tive requirements and practical attempts exist, the aim of such an assess-
ment, including the definition of system boundaries and perspectives,
must be further clarified and is greatly needed. In this respect, the exist-
ing sustainability assessment literature can be helpful.
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264
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change (De Geus 2002). An essential part of this strategy has always
been to engage in partnerships and network relations with other organ-
izations (Lawrence and Suddaby 2006) in order to engage in systemic
change (Van Tulder and Keen 2018).
The integration of sustainability in the innovation strategies of com-
panies is determined by the degree to which sustainability issues can be
made ‘material’. A sustainable issue is material if ‘it could substantively
affect the organization’s ability to create value in the short, medium or
long term’ (IIRC 2013: 33). Corporations, however, are confronted
with a large number of sustainability issues which create sizable dilem-
mas in determining what to address and what not (Van Tulder with
Van der Zwart 2006). In the sustainability discourse, companies use
so-called materiality assessments to determine the threshold at which spe-
cific sustainability issues are deemed so important by relevant stakehold-
ers that they should address these in their strategy. Typically, materiality
starts from the perspective of the company and prioritizes sustainability
issues in direct response to stakeholder pressure.
In this chapter, we will explain (section “Materiality as a Principle”)
the theory and principles behind the materiality process as well as the
type of strategies existing materiality approaches tend to favour (sec-
tion “Materiality in Practice”). It has been found that extant materiality
techniques tend to prioritize incremental over radical forms of inno-
vation. Companies often stimulate reactive practices of issue manage-
ment and consider international sustainability challenges as tactical and
risk-related challenges, rather than opportunities for growth and inno-
vation. Overly conservative strategies in general tend to increase the
occurrence of an incumbent’s curse.
However, we also notice a new take on the materiality challenge
(section “Reversing Materiality: Applying the SDGs”), under the influ-
ence of the formulation of the 17 Sustainable Development Goals
(SDGs). In September 2015, all 193 UN governments agreed upon a
joint ambition for the year 2030 that ranges from poverty alleviation
to effectively addressing climate change and health problems (UN
2015). The achievement of most of these goals requires transformational
change. Many incumbents have actually contributed to the formulation
274
R. van Tulder and L. Lucht
Materiality in Practice
Determining materiality means being engaged in a lengthy and repeti-
tive process that often consists of the following steps: identification of
material topics, prioritization, validation and review (GRI, G4). Seeking
management support and stakeholder feedback are essential conditions.
Different frameworks directed at different users of the disclosed infor-
mation (e.g. Sustainability Accounting Standards Board (SASB) (inves-
tors), International Integrated Reporting Council (IIRC) (investors),
GRI (all stakeholders)) can be used as guidance, but there is no gener-
ally accepted standard. Neither is there a universally accepted definition
of materiality in the sustainability context.
In theory, the output of the materiality determination process is the
disclosure of truthful and accurate information about a company’s per-
formance and impact. In practice, this proves to be quite difficult since
this information needs to be tailored to different stakeholder groups.
15 REVERSING MATERIALITY: From a Reactive Matrix …
277
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Fig. 15.1 Exemplary GRI G4 Materiality Matrix in which we position the 4 stra-
tegic options companies have and we indicate how walk and talk are related to
the axes. https://g4.globalreporting.org/how-you-shouldreport/reporting-princi-
ples/principles-for-defining-report-content/materiality/Pages/default.aspx
1. Don’t talk and don’t walk (Inactive): This is the traditional (neoclas-
sical) view on companies in which they adopt a narrow ‘fiduciary
duty’—with only direct and short-term responsibility to sharehold-
ers and owners without taking into account negative externalities
like pollution—and consequently keep to relatively simple goals like
profit maximization. This position feeds into low expectations/trust
of society on the ability of companies to contribute to sustainability.
2. Talk, but don’t walk (Reactive): This is the archetypical reason why
sceptics refer to ‘green-washing’—or in the case of UN initiatives
‘blue-washing’ (blue is the colour of the UN)—of companies. It hap-
pens when companies are not serious about their contribution to sus-
tainability, but nevertheless suggest the opposite. This can also apply
to companies that are more serious about sustainability issues, but
nevertheless limit their sustainability strategy to marginal activities
(and organize this for instance in their philanthropic foundation).
Some are already talking about ‘SDG washing’.4
3. Walk, but don’t talk (Active): Faced with the societal trust gap, a num-
ber of frontrunner organizations are choosing not to talk (too much)
on their societal ambition, for fear of not being able to satisfy all critics.
For instance, when operating in countries with corrupt regimes, it is not
always wise to be too transparent on a number of issues.
4. Talk and Walk (Proactive): This creates alignment of trust in case
of well-communicated processes, but because most issues are very
complex and take considerable time, there is no guarantee that com-
panies that are willing to really integrate sustainability in their cor-
porate strategy are actually able to do this. The managerial challenge
becomes not only which issue to prioritize, but also what to commu-
nicate and which stakeholder to engage. Talking becomes a precondi-
tion for implementing strategic intent.
billion. They have made the SDGs material by integrating them into
corporate strategy (option 3) as well as engaging others in their strat-
egy to create an enabling environment (option 4). The more compa-
nies are able to line up with partners across their own sector as well as
with non-commercial parties, the more they are able to create an ena-
bling environment that can create radical or disruptive innovation (Van
Tulder et al. 2014). In the latter case, coalitions of parties create new
institutions (new rules of the game) that can speed up the spread of dis-
ruptive sustainability tremendously in particular when supported by
(big) incumbents.
The SDGs, when used to broaden the materiality approach as an
input for strategic planning and innovation, require that companies
move beyond their own previous selection of material issues and don’t
‘repackage’ old priorities to fit the SDG agenda. The challenge is not to
pick the easiest, most positive or obvious goals, but to select those that
can become truly material to the future business of the company (PwC
2015). Nevertheless, this is no easy task since the SDG ambition level is
high and the required innovations are generally considered too systemic
(which often implies radical change). This predicament can result in a
short-term focus with relatively quick wins to boost the company’s per-
formance instead of transforming core business strategies. Corporations
can have a ‘selection bias’: only those issues receive priority that they
would have embraced for defensive reasons. Applying the original defi-
nition of materiality becomes additionally challenging with the inclu-
sion of more than a limited number of SDG: How to find agreement
on what actually entails corporate ‘performance’ (with or without soci-
etal impact) or ‘complete’ and ‘coherent’ information? The Business &
Sustainable Development Commission (2017) argues that by prioritiz-
ing the right Global Goals in their strategy agenda, companies cannot
only anticipate the disruption that is likely to appear in the future, but
also shape the direction of the disruption to their competitive advantage
due to concomitant alliances with other societal stakeholders that have
helped in formulating these specific goals. Shared goals—even if compa-
nies were not part of their formulation—are a precondition for strategic
alignment between potential partners (PrC 2015).
15 REVERSING MATERIALITY: From a Reactive Matrix …
283
Notes
1. http://csr-reporting.blogspot.nl/2014/12/why-materiality-matrix-is-use-
less.html.
2. https://www.edelman.com/global-results/.
3. https://corporate-citizenship.com/wp-content/uploads/Accelerating-
Progress-on-SDGs-2017.pdf.
4. https://oecd-development-matters.org/2017/09/25/ever-heard-of-sdg-
washing-the-urgency-of-sdg-due-diligence/.
5. To mention a few: well-known companies like Nissan (in joint venture with
Enel Group) or Merck, but also smaller and less well-known companies are
classified as ‘unicorns’ like Didi Chuxing, GuaHao or MicroEnsure.
6. https://www.philips.com/a-w/about/investor/philips-investment-propo-
sition.html.
7. https://www.unilever.com/sustainable-living/improving-health-and-
well-being/.
8. https://www.dsm.com/corporate/sustainability/vision-and-strategy.html.
15 REVERSING MATERIALITY: From a Reactive Matrix …
287
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289
Introduction
In this introduction, we present our storyline in narrative form and end
with the central question addressed in this chapter. In the next sections,
we repeat this journey in smaller steps and discuss it with references to
academic research.
Our proposition puts several notions at the centre stage: early varia-
tion of contextual perspectives (i.e. sourcing in different perspectives to
develop a more holistic understanding), embracing diversity (i.e. dis-
cover these different perspectives on purpose, even if they might clash)
and focus on revealing patterns (i.e. be open to identify, often unex-
pected, connections that emerge once different perspectives are brought
together). Examples are provided throughout this chapter. These exam-
ples demonstrate how the mentioned notions are conducive to develop
innovations that can achieve large-scale sustainability impact. In prac-
tice, this design perspective requires a management perspective that is
aligned with it. We discuss two aspects: (1) goal setting depending on
time horizon and clarity of circumstances and (2) the extent to which
(central) management control may need to be ceded to play into contex-
tual circumstances.
The main objective of this chapter is to explore and discuss rather
than answer the following question: “How can a management approach2
be aligned with an adaptive product architecture if the aim is to achieve
large-scale sustainability impact? ” This exploration is constructed from
literature, external examples and own cases from our research in the
past few years. The cases are all anonymised because of confidentiality
considerations.
break up the system that is being considered early on, in order to con-
trol it or analyse only the single parts to understand what is happening
(Ackoff 1973). Sustainability after all is a property of a system, not of
individual elements (Ceschin and Gaziulusoy 2016).
When it comes to addressing the world’s complex and wicked prob-
lems (Rittel and Webber 1973) the claim has been made that the man-
agement domain could learn from the design domain (Buchanan 1992;
Cross 2001; Brown 2008). We do not discuss this claim in depth in
this chapter. More importantly for now, we observe that any nota-
ble sustainability issue (climate change, access to energy, food systems,
plastic waste, etc.) is experienced on a global scale, with different often
interconnected manifestations and interpretations that reflect the mul-
tiformity of such issues. There is an ongoing academic debate about dif-
ferent levels of complexity and wickedness (Camillus 2008; Raab and
Oerlemans 2016). This debate is not essential for our paper. The core
point remains that issues are interrelated, as are their manifestations.
The system as a whole is therefore unpredictable as are the effects of any
particular measure. In other words, complex and wicked issues have
no real solutions. While the relevance of complexity is acknowledged
in management circles, see for example (Stacey 1996; Courtney et al.
1997; Sargut and McGrath 2011), this does not mean that managers’
desire to stay in control has dissolved.
context. To some extent, this view has been discussed related to platforms
(Martin and Ishii 2002) or open-ended design (Ostuzzi et al. 2017).
Similarly, the paradigm of open innovation (Chesbrough 2004) and dis-
cussion on mastering the ability to work with a variety of partners (Pagano
2009) have also initiated rethinking collaboration between companies.
We now include some brief examples from our cases that illustrate
how early intentional context variation can have beneficial effects for
scaling efforts as well as for the initial context that a company chooses.
The benefits are generally understood by people who are involved in this
approach. In practice, different contexts often fall under the managerial
responsibility of different business units or branches. The management
perspective therefore needs to be considered as well.
300
W. C. Kersten et al.
The way how companies set goals needs to fit the situation that they
face. When addressing global issues with diverse local manifestations
there are many uncertainties. In this situation, one can surmise that
control-oriented paradigms like S.M.A.R.T. targets (Doran 1981) make
increasingly less sense, especially with narrow interpretations of Specific
and Measurable (quantified).
When encountering a variety of circumstances, a framework for
goal setting might need to look more like Fig. 16.1. In particular, one
would have to acknowledge the reality that management control is an
illusion in a world of uncertainty (Flach 2015). As Fig. 16.1 suggests,
only if a company environment is stable and the time horizon is short
(right below) a control paradigm might be suitable. Even then, changing
course when required may still be desirable.
In reality, setting the right types of goals is even more complex: not
only can the long-term goal be hazy and the short-term actions clear,
the opposite can also be true. A long-term direction might be clear
while each short-term action requires ad hoc circumstance driven deci-
sions. While the relevance of making such distinctions might be clear, it
is not necessarily common practice. As example we share the following
case from the field of renewable energy in developing economy context,
i.e. a “sustainable innovation”.
16 Intentional Design for Diversity as Pathway …
301
What Next?
How might practitioners as well as academics build on these insights?
An important next step has to be taken by practitioners. If they feel pos-
itively intrigued by the principle of adaptiveness they are the ones that
need to start actively aligning an adaptive product design architecture
and a management approach that allows the benefits of such an archi-
tecture to materialise. One might compare this effort to considering the
enterprise as a wheel instead of a solid block. The former can be moved
more rapidly and easily than the latter, but there are fewer certainties
where you end up so this does require entrepreneurial courage.
To support this approach and use by practitioners we however also
suggest that academics continue with conducting research along these
lines. The aforementioned work on considering sustainable innovation
as a complex adaptive system (Inigo and Albareda 2016) will be useful
input for this. The research should continue to explore what constitutes
a suitable interplay between management and design approaches to
enable companies to let their innovations achieve substantial scale and
therefore transform the world for the better.
Notes
1. Throughout the chapter product can refer to a physical product, a ser-
vice or any product-service combination.
2. We focus on “management” aspects because within the broad business
domain “management” is most explicitly related to “being in control”.
We expect this to be a relevant aspect to explore.
3. Be reminded that “product” architecture refers to combination of prod-
ucts, services and business models.
306
W. C. Kersten et al.
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309
Introduction
On a global scale, sustainable manufacturing has attracted increasing atten-
tion, both among managers and policymakers (Jovane et al. 2008; Eccles
W. Gerstlberger (*)
Department of Marketing and Management,
University of Southern Denmark, Odense, Denmark
e-mail: [email protected]
A. da Mota Pedrosa
Duale Hochschule Schleswig-Holstein, Kiel, Germany
e-mail: [email protected]
R. S. Atlason
University of Southern Denmark, SDU Life Cycle Engineering,
Odense, Denmark
e-mail: [email protected]
R. S. Atlason
Circular Solutions ehf., Ljósakur 6, Gardabaer, Iceland
© The Author(s) 2019 311
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Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_17
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W. Gerstlberger et al.
Literature Review
The vast amount of studies on product innovation success factors (e.g.
Cooper and Kleinschmidt 1995; Calantone et al. 1995; Kline and
Rosenberg 2009; Tidd and Bessant 2013; Smith 2015) generally do not
consider firms’ internal strategic environmental goals as factors influencing
the development of product innovation. However, over the last decade, a few
studies have started to investigate whether or not focussing on environmen-
tal goals is beneficial to firms’ product innovation activities in a wider sense
(Ambec and Lanoie 2008; Lampikoski 2012; Ghisetti and Rennings 2014).
314
W. Gerstlberger et al.
These recent studies have demonstrated that firms mainly have been
forced by external regulation to implement environmental aspects, for
example, technical solutions for reducing the energy consumption of
buildings (Ornetzeder and Rohracher 2006). In addition, Lanoie et al.
(2011) and Ambec et al. (2013) have attempted to empirically examine
Porter’s hypothesis that firms take into consideration external regula-
tions in their product innovation and/or further activities, which influ-
ences their manufacturing processes.
The above-mentioned studies on environmental innovation have
failed to investigate how firms’ internal environmental goals influence
their development of product innovation in general, which is not envi-
ronmental innovation by definition (Ambec et al. 2013; Kemp and
Pearson 2007; Arundel and Kemp 2009). This neglected aspect is of
great relevance to managers and researchers, because it is plausible that
managers in manufacturing firms would pay more attention to environ-
mental goals if they knew that these goals would benefit their overall
product innovation activities (Ambec and Lanoie 2008).
Another main argument in the reviewed literature is that there is
no contradiction between internal environmental goals of firms and
improved product innovation activities (Gerstlberger et al. 2016;
Horbach et al. 2012). This argument is basically in line with the
assumption of Porter and van der Linde (1995), who state that envi-
ronmental regulation does foster innovation and thus enhances firms’
competitive advantage. Multiple studies on Porter’s hypothesis reveal,
for example, a reduction in energy and material consumption during
production and/or product use, which also seems relevant with regard
to product innovation (e.g. Ambec et al. 2013; Gerstlberger et al.
2014). In addition, a more recent contribution by Porter and Kramer
(2011), ‘creating shared value’, links societal needs (including environ-
mental aspects) to firms’ innovation management in general. However,
the opposite argument can also be found in the more theoretical eco-
nomic literature, namely that environmental goals may rather constrain
than foster firms’ product innovation due to the increased complexity of
innovation-related decisions and activities (e.g. Walley and Whitehead
1994; Karvonen 2001).
17 How Firms’ Strategic Environmental Goals Influence …
315
Hypothesis Development
We take as our starting point for the development of hypotheses the
established literature on success factors within new product develop-
ment (Cooper and Kleinschmidt 1995; Cooper et al. 1999, 2002;
Ritter and Gemünden 2004). This literature has identified strategic goal
setting and portfolio management as important success factors of new
product development projects besides input factors like internal and
external R&D and upfront (e.g. marketing research) activities. Finally,
our hypothesis on internal strategic environmental goals is informed
by more recent literature on the internal drivers of firms’ environmen-
tal product development or product innovation (‘eco-innovation’)
(Dangelico 2016; Gerstlberger et al. 2014).
Recent eco-innovation literature’s theoretical argument for consider-
ing internal strategic environmental goals potential drivers of product
innovation refers to possible approaches to how to integrate additional
product- and production-related environmental information into firms’
innovation management processes (Dangelico 2016; Dangelico and
Pujari 2010). Including such additional environmental information, for
example, data referring to energy and/or material consumption during
the production and/or use of newly developed products, can support
not only eco-innovation, but also product innovation in general.
The reason for such a general, positive effect of additional environ-
mental information on product innovation is the potential financial
effects regarding new product characteristics like production cost and
selling price (Dangelico and Pujari 2010). For example, a considera-
ble material reduction of a newly developed product (compared to an
already existing reference product) will typically also lead to a significant
reduction in the production costs for this new product (Præst Knudsen
and Gerstlberger 2015). Firms’ internal strategic environmental goals
can serve as a mechanism that ‘force’ the various departments respon-
sible for a firm’s production and new product development to system-
atically collect, document and integrate relevant environmental data
into the respective firm’s innovation management processes (Dangelico
2016; Dangelico and Pujari 2010; Præst Knudsen and Gerstlberger
316
W. Gerstlberger et al.
When firms set their own internal strategic environmental goals, inter-
nal R&D departments are often challenged by the limitation of little
input from their part for the actual environmental goal development
process. They may need to include specific technological input (e.g.
regarding material selection or energy efficiency) in firms’ product inno-
vation activities. This specific input forces many manufacturing firms
to further formalise their internal R&D activities (De Marchi 2012).
Other internal sources, such as documentation of practical experiences
from production processes, often cannot provide the necessary tech-
nological input for complex innovation tasks that internal R&D can.
Furthermore, both previous studies on success factors of new product
development in general and on firms with proactive innovation strate-
gies in particular have shown that systematic and strategic management
of firms’ product portfolios (see also the argumentation above) is an
important characteristic of successful product-innovative firms (Aragón-
Correa 1998; Chen et al. 2012; Cooper et al. 1999, 2002).
In line with the above argumentation, we have formulated the below
hypotheses. We have also included internal R&D activities and the
composition of firms’ product portfolio (in terms of ‘old’ and ‘new’
products) as two further drivers of new product introduction in our
analysis (e.g. Calantone et al. 1995; Tidd and Bessant 2013; Smith
2015). These additional considerations lead to H2a and H2b:
Methodology
For the quantitative analysis of this study, we have used the Danish part
of the European Manufacturing Survey (EMS) 2015 dataset. In addi-
tion, we have also conducted qualitative interviews with managers of
Danish manufacturing firms, the results of which will be presented after
the quantitative findings of the study.
Traditional
Relation Internal R&D activities
Independent Variable 1
H2a
H1
New Strategic
Relation? Environmental Goals
Independent Variable 3
1. Basic metals and fabricated metal products industry, with metal and
plastic material as main products (CEO ).
2. Basic metals and fabricated metal products industry, with metal
working, laser cutting and robot welding as main products (CEO ).
3. Machinery and equipment industry with devices for industry kitch-
ens as main products (Sales Director ).
17 How Firms’ Strategic Environmental Goals Influence …
321
The results of the analysed qualitative interviews indicate, first, that the
formulation of internal strategic environmental goals has supported the
given firms’ systematic collection, documentation and use in product
innovation processes of both economically and environmentally rele-
vant data regarding the energy and/or material consumption of newly
introduced products. As an example of this inclusion of additional data
related to energy and/or material consumption in new product develop-
ment processes, one interviewee mentioned that the head of the R&D
department of the respective firm ‘was asked to provide solid evidence
for their newly developed product in terms of energy consumption’ by
the top management based on the firm’s strategic environmental goals.
A further example of the inclusion of additional economically and envi-
ronmentally relevant data in firms’ product innovation processes due
to internal strategic environmental goals ‘is the focus on material use
reduction’, as the interviewee from another manufacturing firm stated.
Finally, also the implementation of corporate environmental certifi-
cations by the investigated manufacturing firms has been driven by top
managers’ efforts to formulate internal strategic environmental goals
and introduce new products in close cooperation with both internal
(e.g. R&D, production and marketing/sales departments) and external
(e.g. key customers and suppliers) stakeholders. In this context, three of
the interviewees indicated that ‘certifications like the ISO 14001 certifi-
cation have pushed the effort to not only become eco-friendlier within
the boundaries of the firm but also to seek to innovate products that
are in line with the highest standards within use of resources, and emis-
sions’. In these cases, certifications like ISO 14001 provided a support-
ive framework for increasing the level of producer-customer inter-firm
information and knowledge transfer by setting standards for the form
and quality of the exchanged data.
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Discussion
Based on the presented quantitative and supplementing qualitative
results, a first contribution of this chapter is that certain corporate capa-
bilities are synergetic between product innovativeness in general and
the introduction of new products with specific environmental ambi-
tions. This first result is partly in line with literature on the drivers of
environmental product innovation or ‘eco-innovation’ (Pujari et al.
2003; Dangelico 2016). More in detail, our study shows the signifi-
cant positive correlation between manufacturing firms’ internal strate-
gic environmental goals and new product introduction in general, while
controlling for firms’ internal R&D activities and the composition of
product portfolios (in terms of old and new products) as established
product innovation success factors.
Second, this study contributes to the still emerging literature on
sustainable innovation with the finding that manufacturing firms’
strategic environmental goals are not only positively correlated with eco-
innovation (as can be expected and is known from the literature), but
also with new product introduction in general. Based on our secondary
analysis of qualitative interviews, one explanation for this second contri-
bution is an increased degree of producer-customer (inter-firm) knowl-
edge transfer in different kinds of environmental and general innovation
projects in firms with strategic environmental goals. Such increased
inter-firm knowledge transfer indicates that firms’ strategic environmen-
tal goals not only have implications for the content of innovation pro-
jects, but also for the form and intensity of inter-firm cooperation and
knowledge transfer during innovation projects in general.
Conclusion
Contributions to Firms’ Strategic Environmental Goals
for Theory and Practice
The results shown and discussed in this chapter can help managers
of manufacturing firms to better see and exploit the advantages and
17 How Firms’ Strategic Environmental Goals Influence …
323
• Top managers (e.g. CEOs) and managers responsible for areas such as
R&D, production and marketing can use this insight to identify and
implement strategic environmental goals for their firms, which will
lead to significant reductions in energy and/or material consumption
in specific fields related to new product development (e.g. produc-
tion, use, product refurbishment, maintenance of products and/or
production facilities).
• Besides such potential reductions in energy and/or material con-
sumption, also opportunities to avoid harmful substances (e.g. tem-
perature regulation) during production processes and/or to simplify
the recycling of used products can form part of firms’ strategic envi-
ronmental goals.
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Part IV
Tools, Methods and Technologies
Introduction
Current production and consumption patterns will not support the crea-
tion of social, environmental and economic (‘triple bottom line’) value in
the longer term (Tennant 2013; Schaltegger et al. 2016). A linear view of
economics and the accompanying ‘business as usual’ paradigm will result
in incremental innovation (Dewberry and de Barros 2009); such incre-
mental innovation is unlikely to solve urgent climate and resource chal-
lenges (Dewberry and de Barros 2009; Westley et al. 2011). Business value
offerings have to radically change: ‘do differently’ is needed rather than ‘do
what we do but better’ (Bessant et al. 2014). Do differently innovation is
I. Weissbrod (*)
Leuphana University Lüneburg, Centre for Sustainability Management,
Lüneburg, Germany
e-mail: [email protected]
I. Weissbrod
Centre for Environmental Policy, Imperial College London, London, UK
© The Author(s) 2019 335
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Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_18
336
I. Weissbrod
a higher level of complexity2 (Maguire et al. 2006). This means that the
unknowns to be explored through experiments in sustainable innovation
are higher in number than during conventional innovation. All this poses a
dilemma for innovation managers in business looking to increase the triple
bottom line value ‘output’ of their innovation process.
data contain the key learning needed to refine the product/service idea
(Fig. 18.2). The MVPs used in this process need to be refined enough to
enable the completion of the full learning cycle, at the same time these
product versions are created with ‘a minimum amount of effort and the
least amount of development time’ (Ries 2011: 77).
This learning cycle about how customers react to MVPs is repeated
fast and, usually, more than once (Blank 2013; Ries 2011). Only when
customers respond well to the minimum viable product, marketing of
the new products/services and building of a business model should take
place (Blank 2013; Bocken et al. 2018). Intensive customer engage-
ment during, ideally quick, product and service iterations will enable
innovators to achieve product/service fit with gaps in the market. Both
established businesses and small startups may pursue sustainable inno-
vation (Hockerts and Wüstenhagen 2010). It has been observed that
We have a group of people on sustainability who are corporate and I’m not
corporate. I’m really embedded in the business because my vision is to embed
sustainability into the business practices and culture. (..) I work with the busi-
ness to help them accelerate their innovation, their commercialisation and
their capabilities to drive sustainability into the heart of the business.
The [P&G open innovation] Connect and Develop concept applies to all
innovation including sustainability. I think what we see on sustainabil-
ity is that we are getting lots of ideas from our suppliers coming to us
with sustainability ideas because they are just working on this. The key
challenge really is (..) to bring them to the right people in the business
because it’s just unfamiliar territory. That would be the difference with
other innovation ideas, is that people are not really familiar with what
[sustainable innovation] is and what it can do and have lots of precon-
ceived ideas of, “It will always be more expensive”. One of my roles is to
make sure that I see these ideas and I bring them to the right place in the
business and we can nurture them and then develop them internally.
The key challenge of developing ideas internally is a dilemma not only for
P&G. Research on pursuing innovation outside the business status quo
has been trying to untangle the key barriers and components for many
years. One of the key barriers identified is a restrictive mindset and a lack
of relevant competences to pursue activities outside the innovation status
quo (Sandberg and Aarikka-Stenroos 2014). P&G identified the lack of
sustainability competences as an area for ongoing improvement during
the pursuit of sustainable innovation. Allowing experiments that are out-
side the known corporate innovation mechanisms to flourish internally
is highly dependent on the leader of a division. P&G is no exception: a
product division leader with a deep understanding of sustainability and
an appetite for experimenting to develop different and more sustainable
products has been essential to allow experimentation with triple bottom
line value propositions. In the division, the innovation team took part in
a highly unusual off-site excursion. The goal of the excursion was to expe-
rience how P&G products impact social and environmental sustainability.
The team went to Kenya.
So that’s the most extreme of inspiration. It’s taking a full week away in
Kenya. I wanted to show them how their technology could actually have a
18 Experimentation for Sustainable Innovation
345
lot greater impact that what we can imagine, social and environmental. It was
an absolutely fabulous experience. We brought back four big business ideas.
Three of them are now [Author note: 2014] being implemented, so very suc-
cessful. (..) One is in pilot, one is integrated into our innovation pipeline and
the other two actually are just integrated in the innovation pipeline, so they
are being worked as part of the full traditional innovation system.
The innovation goal for the excursion team taken to Kenya was fairly
broad in its scope to explore social and environmental value creation.
For the purposes of this particular excursion, a broad goal was useful. For
more targeted experiments, during the innovation process this is, how-
ever, different. It has long been established that clear measurable goals of
project activities ‘help to absorb uncertainty and create focus’ (McGrath
2001: 120). Uncertainty is related to a high level of complexity and as
argued earlier, sustainable innovation is more complex than conventional
innovation due to the higher number of factors involved (Jay and Gerard
2015). After all, how can we design an experiment and gain useful learn-
ing if we do not know what we are trying to achieve with the experiment
(see Hicks 1982)? Making better use of resources used in products and
services (i.e. extending the life of resources) is a clearly defined goal for
innovation activities. P&G does not only use long excursions for inno-
vation teams to gain a deeper understanding of sustainability challenges.
Visiting a landfill to highlight the undesirability of a linear consumption
pattern has been an excursion destination that took place over much
shorter period of time. The goal of reducing post-consumer waste going
to landfill was the driver for the landfill site-visit of the P&G innovation
team and aligned with the operational goal of reducing waste going to
landfill to zero by 2020 for all P&G manufacturing facilities.
development cycle (Blank 2013; Ries 2011) comes into play. The key
difference between using the customer cycle in conventional innovation
activities and sustainable innovation activities is twofold. Firstly, the
learning goal to be served with using the customer development cycle
must aim to serve social, environmental and economic value creation in
equal measure. Secondly, triple bottom line value creation knowledge
must be embedded in the team that experiments to ensure deliberate
rather than accidental learning. Customer development cycles test dif-
ferent versions of MVPs, with a number of cycles running in parallel.
Each customer development cycle consists of the 6 steps outlined ear-
lier (Fig. 18.2). To recall: (1) ideas are (2) built up into (3) MVPs, con-
sumer responses to these are (4) tested and measured, and this (5) data
is used to (6) refine the ideas. For the purpose of sustainable innovation,
each customer development cycle should be underpinned by triple bot-
tom line value creation. At the same time, the business has social, envi-
ronmental and economic value creation priorities at the corporate level
that innovations must meet. In the case of P&G, the goal of ‘zero waste
to landfill from manufacturing sites’ is a key value creation priority.
Corporate triple bottom line value creation priorities form the bound-
aries of the experimentation space for the customer development cycles.
A combination of (1) the articulated sustainable innovation goal and
(2) the triple bottom line boundaries created by the corporate priorities
enable innovation teams to focus, whilst they explore new products and
services through customer testing. Figure 18.3 shows how product and
service ideas that look to extend the lifetime of resources can be tested
through customer development cycles. Social (purple), environmen-
tal (green) and economic (blue) value creation underpin each customer
development cycle. At the same time, the boundary for the total exper-
imentation space (orange line), broadens out in scope before narrowing
again. This is to be expected due to the moving sustainability goalposts
(Gaziulusoy et al. 2013) and the large number of interconnected fac-
tors in sustainable innovation (Jay and Gerard 2015) that increase
uncertainty. Previous case study research has observed the broadening
of the triple bottom line boundary scope: it allowed for the customer
exploration of value propositions outside the current business practice
(Weissbrod and Bocken 2017).
18 Experimentation for Sustainable Innovation
347
Conclusions
This chapter showed the differences in the theoretical underpinning
between experimentation for sustainable innovation and the natural
sciences experimentation process. In contrast to the linear experimen-
tation process used in natural sciences, experimentation for sustainable
innovation is a cyclical process during which experimentation varia-
bles cannot be tightly controlled. The case of P&G highlighted some
of circumstances a business might encounter when looking to experi-
ment during the sustainable innovation process. Sustainable innova-
tion is more complex than conventional innovation due to the higher
number of factors involved. The experimenting business can, therefore,
expect for the problem space to change and even broaden out during
the experimentation process. In addition, balancing the three aspects
of triple bottom line value creation is hard for businesses to achieve.
Practitioners looking to develop sustainable business models should
initially run experiments to test a new triple bottom line value cre-
ation with potential customers. This will ensure that broader business
model experiments, likely to include a larger number of stakehold-
ers, are building on a strong triple bottom line value creation founda-
tion. Future research needs to test and develop the method shown in
Fig. 18.3 through case studies. Ideally, the case study businesses aim to
explicitly experiment during the sustainable innovation process, in order
to achieve challenging triple bottom line value creation goals.
Notes
1. Sustainable innovation is used throughout this chapter as term to
encompass corporate innovation activities that aim to produce triple
bottom line product and service offers.
2. This assertion is based on ‘Features of complex systems’ as presented by
Maguire et al. (2006: 166); the authors do not refer specifically to fea-
tures of innovation processes.
18 Experimentation for Sustainable Innovation
349
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19
Experimenting with Circular Business
Models—A Process-Oriented Approach
Maria Antikainen and Nancy Bocken
Introduction
It is widely accepted that we need to move towards a more sustainable
and preserving economic model (Seiffert and Loch 2005; Ellen
MacArthur Foundation 2013; Markard et al. 2012). The circular econ-
omy (CE) is currently offered as a key solution for creating a regen-
erative and restorative economic model (Geissdoerfer et al. 2017).
The idea is based on resource sufficiency and sustaining the value of
materials with business and technological innovations (Ellen MacArthur
Foundation 2013). To move towards the CE, a systemic innovation in
M. Antikainen (*)
VTT Technical Research Centre of Finland, Espoo, Finland
e-mail: [email protected]
N. Bocken
Lund University, Lund, Sweden
e-mail: [email protected]
N. Bocken
Lappeenranta University of Technology, Lappeenranta, Finland
© The Author(s) 2019 353
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_19
354
M. Antikainen and N. Bocken
Need for CBMEs
idea or radically change the idea or to scale the idea. If more experi-
ments are needed, the learnings are utilised as a basis of the next round
of experimentation. Therefore, a business model experimentation ‘fails’
only if there are no lessons learned. Thomke (2003) reiterates the need
to make a clear distinction between ‘failures’ and ‘mistakes’. By ‘fail-
ure’, he means a natural outcome of the experimentation process, which
should be useful for learning. In contrast, the term ‘mistake’ refers to
serious problems with the experimentation process, often caused by
poor design (Thomke 2003).
Experimentations also answer to the challenges set by a high degree
of customer and market uncertainty in the business model develop-
ment process (Andries et al. 2013). These are apparent in circular busi-
ness model innovation, as, for example, circular business models may
involve entirely new markets and customer segments, and the uncer-
tainty is high. To move towards circular business models, business
19 Experimenting with Circular Business Models …
359
feedback loop. The first step is in this approach is also to figure out the
problem that needs to be solved and then to develop a minimum viable
product (MVP) with which to begin the process of learning constituting
multiple loops, as quickly as possible (Ries 2011). Ries’ (2011) learning
cycle is based on Blank’s (2005) model of customer development, which
is a four-step process and includes customer discovery, customer valida-
tion, customer creation and company building.
In order to design and run business model experimentations, it is
important to understand the underlying processes and elements of the
business model (Chesbrough 2010). One popular tool is the business
model canvas by Osterwalder et al. (2010) that consists of nine business
model building blocks. Based on the ideas presented in the business
model canvas (Osterwalder et al. 2010), the Lean Startup method-
ology (Ries 2011) and customer development (Blank 2005, 2013),
Osterwalder et al. (2014) present a practical guide, for startups as well
as established organisations, on how to create the customer develop-
ment cycle, and design and run rapid experiments. The experimenta-
tion process starts with extracting hypotheses, prioritising hypotheses,
designing tests, prioritizing tests, running tests, capturing learnings and
finally making progress (Osterwalder et al. 2014).
Osterwalder et al. (2014) offer a practically oriented method for
designing and running experimentation and guiding businesses through
the process, step-by-step. They also provide concrete tools for compa-
nies to facilitate process. Yet, their approach is focusing on the quanti-
tative measurement of the experimentation. However, when innovating
novel business models, it is often difficult or even irrational to set quan-
titative measurements. Instead, understanding the qualitative aspects
may offer more fruitful data.
be divided into five broad phases (Fig. 19.2). The arrows in the figure
suggest that this process is iterative and often moves backwards and
forwards between different steps. The pace of each of the phases can
be fast. However, sometimes phases might take longer (in particular,
practical planning and implementation), because of business timings
and decision-making or even a lack of resources (time, money, peo-
ple), despite the low-resource nature of experiments (Weissbrod and
Bocken 2017). After Step 5 (data analysis), one might move back up to
ideating or any of the other steps, such as immediate planning of new
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Step 2. Design
The third step consists of the practical planning of the rapid business
model experimentation, which often requires quite intensive work.
The planning includes both practical part planning and planning of
the research part. In order to run experimentations in practice, there
is often a need to find new partners to secure funding and necessary
After the implementation phase, the next important step is data anal-
ysis, where the collected data, usually from multiple sources, is ana-
lysed and evaluated (Ries 2011). At this stage, REC (Antikainen et al.
2017), which are aimed for companies to help planning and conduct-
ing experimentations, can be used as to analyse the data and reflect
the gained results with the actual plan. Most important, in this phase
is to find answers to the hypothesis. There also might be other data
sources than in the planning phase was suggested. In this phase, it is
important to keep in mind that the experimentation only fails in case
the data collection and the analysis fails. Therefore, all learnings are
important and all the data should be used as a base for decision-mak-
ing for the next steps. In addition to answering the hypothesis, anal-
ysis can be leveraged to give other suggestions and answer other
research questions.
Finally, the conclusions are drawn and planning of the next steps
planned for the next business model experimentations. Building on
the REC (Antikainen et al. 2017) one of the following options may
be selected (see Fig. 19.2): (1) needs more experimentation, (2) needs
a larger pilot, (3) ready to be scaled, and (4) needs major changes (i.e.
a pivot). This decision is influenced by the (a) qualification/discarding
the hypothesis, (b) learnings from the earlier rapid experimentations,
and (c) criticality of the currently tested hypothesis. Depending on the
result, a rapid experimentation can produce ideas what are next steps to
be tested.
Next, we present our case study on Liiteri. We illustrate the different
phases identified from the process and analyse the experimentation pro-
cess by highlighting identified challenges and gained benefits in differ-
ent phases.
366
M. Antikainen and N. Bocken
Currently, many consumers own tools that are not used regularly. The
whole usage-time for a tool during its life cycle can even be under
10 minutes. These tools need storage space and require maintenance.
Therefore, a more efficient and also environmentally friendly solution
would be to rent a tool when needed. These kinds of rental services have
been popular in B2B markets and new B2C services have been launched
lately. Yet, there is still a need for novel services that are easy and attrac-
tive for consumers.
A start-up company, called CoReorient (www.coreorient.com)
was interested in developing a novel tool and cleaning equipment
rental service for consumers, which can also be developed into a
larger service platform (Antikainen et al. 2017). Yet, before launch-
ing a novel service, the business model needed to be piloted in order
to understand how to offer superior value for consumers instead
of existing models (owning) and also to make a sustainable business
model. Therefore, Liiteri.net was established by the Finnish startup
CoReorient (www.coreorient.com) and implemented with the collab-
oration of the Finnish hardware store KRauta and an AARRE research
project (http://www.vtt.fi/sites/AARRE). Liiteri (www.liiteri.net, www.
townhall24.fi) was designed and implemented during September–
December 2016.
The Liiteri platform comprised of three different service platforms,
i.e. an outsourced online platform, a 24/7 self-service pickup point
with access control and a PiggyBaggy home delivery service. The data
included the design and set-up phases, running phase as well as a
crowdfunding experiment at the end. During the piloting, 100 users
registered for the Liiteri service, and during the pilot, 44 rental transac-
tions took place.
19 Experimenting with Circular Business Models …
367
Experimentation Process
In order to offer tools as flexible as possible, the idea was that customers
are able to pick up the tools at a 24/7 Liiteri self-service point (intelli-
gent container), which was initially planned to be located at the new
metro station in Espoo. Yet, the plan changed because of the substantial
delay of the completion of the metro. Therefore, the Liiteri was placed
at Teurastamo, Helsinki, which is accessible by public transport but not
attracting as many passers-by than the metro station.
In addition to visiting Liiteri, consumers were also able to order
home delivery with the crowdsourced PiggyBaggy (www.piggybaggy.
com) service. The Liiteri pilot also offered other services, such as a vir-
tual shoe repair service and bike repair service. As such, Liiteri included
many elements of a business model offering a whole service for consum-
ers. Therefore, Liiteri can be regarded as a larger-scale pilot, running
several business model experimentations simultaneously. Challenges
identified in this phase were related to the ability to build a flexible plan
that enables justifications if rapid changes are needed.
After the first ideation and idea-clustering phase, in the second step,
the entrepreneur and researchers started to design the pilot. In this pro-
cess, REC were utilised (Fig. 19.3) to facilitate the process, and during
the process, the cards were also iteratively developed (Antikainen et al.
2017). The aim was to test the chosen hypotheses with the real main-
stream customers. With the Liiteri pilot, the entrepreneur in collabora-
tion with the research organisation aimed to test several hypotheses. The
first and the most critical hypothesis was formulated as ‘We believe that
renting tools is an attractive service for consumers, compared to buy-
ing’. Therefore, the first hypothesis was set to test the value creation to
consumers: ‘We believe that the service model creates value, in multiple
ways, for consumers (benefits greater than sacrifices)’. The entrepreneur
also believed that accessibility (24/7) and convenience (e.g. home delivery)
368
M. Antikainen and N. Bocken
Close collaboration with all the partners of the business model experi-
mentation is an important part of this step. The communication and col-
laboration with the large group of partners needed lot of time and effort.
However, this challenge was tackled by having experienced and active
communication personnel in the start-up company. Since Liiteri was con-
ducted in close collaboration with a research project, in the planning phase
the roles and responsibilities between the entrepreneur and the research
organisations were defined. The former was responsible for arranging
and running the pilot, itself, as well as for collecting the quantitative data
(number of users etc.) during the pilot, along with customer feedback, for
further analysis. The researchers were responsible for planning the research
in collaboration with the entrepreneur, collecting data in the form of con-
sumer and user questionnaires and interviews and analysing the jointly
acquired data, after the pilot. The roles and responsibilities need to be clear
to avoid misunderstandings and to facilitate efficient process in next steps.
caused errors and feedback from the users. Presumably, the active use
of social media and media visibility were important factors contributing
to the success of the pilot in attracting a critical amount of users. Based
on the data, the usage rate of the additional services remained low, yet
because of the lack of data, conclusions cannot be drawn.
During the pilot, there were significant bottlenecks related to the
most popular tools, such as a steam washer. This led to the situation
that the waiting time for these most popular tools grew too long and
the users lost their interest in the service.
In the data analysis phase, all the data from multiple sources were col-
lected and analysed by using the REC cards. Due to our five hypoth-
eses, we got five REC cards filled. The results of the most critical
hypothesis are presented in Fig. 19.4.
As a result, the Liiteri pilot confirmed that renting tools was found to
be an interesting service for urban consumers. Convenience and com-
petitive price plays a crucial role. Furthermore, in order to be attractive,
the logistics related to the usage of the service need to be smooth and
easy. This can either be solved with innovative home delivery solutions
or central locations of the container. This is also required to make the
service environmentally sustainable. For stakeholders, the model requires
mind-set change and innovative thinking how value is delivered as well
as finding novel sources of value (e.g. by offering maintenance services
or more holistic customer solutions). The conclusions drawn suggested
that another pilot in different location would be needed to bring more
understanding on the value proposition and pricing of the model.
Discussion and Conclusions
Experimentation with new circular business models is necessary to start the
transition to a CE. This chapter has presented a process-oriented view on
experimentation illustrating the confronted challenges in different steps
based on the empirical data from our case study Liiteri.
Only a few tools and approaches to date focus on experimentation
with some exceptions (Antikainen et al. 2017; Bocken et al. 2018). This
work presents a potential approach to circular business model exper-
imentation. However, it should be noted that in dynamic and turbu-
lent business environments, and with pressing sustainability challenges,
a process as structured as the product-innovation stage-gate process
(Cooper 2008) is not appropriate anymore (Tuulenmäki and Välikangas
2011). Figure 19.2 thus presents a seemingly stepwise process but the
iterative nature of this process (as opposed to stage gates in product-
innovation processes) is emphasised. Nevertheless, a rigorous approach
to experimenting is required, similar to experimenting in other contexts,
where specific set-ups, hypotheses, measures, and learning are applica-
ble. As also recommended by the Lean Start-up approach (Ries 2011),
experiments should be focused and have specific hypotheses and meas-
ures. Also, experiments need to be followed up with specific actions
(e.g. pivot, more experiments, pilot, scale up).
19 Experimenting with Circular Business Models …
371
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Introduction
Due to their risk-free environment, game-based approaches have
been adopted by companies and institutions as vessels for train-
ing and development and applied to situations that include mil-
itary training and water management planning (Michael and
Chen 2006). This trend has not escaped the field of sustaina-
bility. Within classrooms, academics have adopted game-based
approaches to increase students’ knowledge of critical raw materials
K. Whalen (*)
International Institute for Industrial Environmental Economics,
Lund University, Lund, Sweden
e-mail: [email protected]
G. Kijne
Clicks and Links, Fourways House, Manchester, UK
e-mail: [email protected]
© The Author(s) 2019 375
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_20
376
K. Whalen and G. Kijne
innovation
E-Mobility Assist in the Develop an e-mobil- A moderator guides teams through In the final phase,
Business development ity business model four phases. Players take on the players assess their
Model Gaming of innova- role of stakeholders in electric business model
(Laurischkat and tive business mobility. A physical game is used and its long-term
Viertelhausen models for with cards where players build their competitiveness
2017) e-mobility business model and collect victory using the pre-
solutions points. New scenarios are then sented business
K. Whalen and G. Kijne
Recyclebank Encourage general Earn points Players earn points for per- Points awarded from
(Recyclebank 2017) public to adopt sus- and redeem forming green actions such online platform and
tainable behaviour them for as recycling; points can also in real life
including recycling rewards be earned through online
and waste reduction quizzes that aim to increase
player’s sustainability-related
knowledge
TwoGo (TwoGo 2017) Motivate SAP employ- Earn points Digital app where players earn Tallying points
K. Whalen and G. Kijne
First, all such games are guided by a set of principles (i.e. rules)
(Wang et al. 2009), and as illustrated by the examples noted in this
chapter, these principles often draw on theoretical innovation process
models such the Business Model Canvas (Osterwalder and Pigneur
2010). For example, Play it Forward uses a Business Model Canvas
adjusted for sustainable business models as its main game board
(DeWulf 2010). Business model components (Osterwalder et al.
2005) feature in the gameplay of E-Mobility Business Model Gaming,
as players must analyse customer segments and re-design their value
proposition, customer interaction, and profit model (Laurischkat and
Viertelhausen 2017). Risk and Race also draws on the Business Model
Canvas and contains business model elements such as two different
types of sales channels (Whalen 2017). With this approach, players can
adapt or change various aspects of these components in order to alter
their business model.
Second, in all serious games, players are guided with an objective.
Like innovation processes themselves, there is no predetermined out-
come. However, players must have a tangible way to measure the out-
come. In the example cases, as illustrated in Table 20.2, this includes
counting fictitious points (such as victory points that are awarded to
players for doing certain actions) or simply scoring the business model’s
sustainability from numerous criteria.
Finally, the complexity of real organizations’ business environments
(such as return on investment uncertainty as mentioned in Linder and
Williander [2015]) is often reflected in sustainable innovation serious
games. The element of chance may be used to change gameplay and
encourage players to consider and experiment with how to respond to
shifts in their internal, operational, or external business environment.
This could mean players having to decide whether to be reactive or proac-
tive in addressing changes to eco-design legislation or resource availability.
does not entirely separate the real world from the game world. Instead,
game elements, such as those described in Table 20.1, are applied within
the real-world context. For sustainability, this means encouraging more
sustainable actions and influencing behaviour through game-based
approaches (Froehlich 2015). Here, gamification involves applying
game elements to non-game contexts, such as receiving a reward when a
specific sustainable action is performed (i.e. shutting off lights).
In contrast to our previous reflection on serious games, we do not limit
our discussion on gamification to a firm-based perspective. In fact, gam-
ification has been widely used to assist the general public in transitioning
to a more sustainable society (Baylis et al. 2014). For example, while a sig-
nificant portion of the world’s population is aware of climate change (Lee
et al. 2015), these issues can be overwhelming: What can you do as one
person—and where do you even start? Here, gamification may be a way
to make it easier for consumers to make sustainable choices. As an action-
oriented approach, gamification can help impart change by breaking down
the issues into manageable, trackable actions. Although these actions alone
may seem inconsequential, overtime they compound and add up.
Examples of gamification for sustainable innovation have targeted
changing consumer behaviour in the home. From those listed in
Table 20.2, this includes a game in development called Age of Energy,
which encourages players to use less energy and Recyclebank, which
motivates users to recycle more through a points and rewards scheme.
However, sustainable gamification is not only aimed at individuals.
Companies such as SAP’s TwoGo may use gamification internally to
influence sustainable actions by employees or measure employee perfor-
mance. As a bonus, this information can be documented and included
in sustainability reports.
games is crucial to ensure these interventions are useful for the trans-
formation to a more sustainable society. We then introduce benefits of
game-based approaches in relation to sustainable innovation.
Various approaches to assessing gaming outcomes have been pro-
posed (Watt 2009). These include embedding assessment methods into
gameplay or conducting an external evaluation after play has finished,
such as through a survey (Caballero-Hernández et al. 2017). In our
experience, however, assessing the actual impact of games is a challenge.
Games created by industry may not be held to rigorous, independent
assessment, and even those developed in academic settings may not be
scientifically evaluated. For example, after reviewing research on twenty-
five different environmental management serious games, Madani et al.
(2017) criticized the studies for their general lack of methodological
approaches and quantitative assessment methods. Still, in comparison
with serious games, gamification interventions may be easier to meas-
ure and quantify as they directly alter players’ actions outside the game
world (Visch et al. 2013).
The games previously presented in Table 20.2 exemplify some of the
challenges that game designers and researchers face when attempting to
quantify the outcomes of game-based approaches. Three of the given
examples (Age of Energy, E-Mobility Business Model Gaming, and Risk
and Race) are still in the pilot phase and currently collecting feedback
from usability tests. The remaining three (Play it Forward, Recyclebank,
and TwoGo) are in use by industry, but access to information about
them is limited. Thus, to further our reflection on challenges and ben-
efits, we expand our discussion to include additional games where out-
comes have been quantified and reported.
Here, a variety of studies suggest implementing game-based
approaches can reduce environmental impact. Use of Opower’s energy
consumption reports—where users receive an efficiency rating and are
able to compare their electricity consumption to that of their neigh-
bours—averaged a 2% reduction of energy consumption (Allcott
2011; Ayres et al. 2009). More economical driving behaviour was also
reported by some drivers when game elements such as instantaneous
feedback were applied to car dashboards to monitor and encourage
eco-driving (Stillwater and Kurani 2011). We refer readers to Owen
20 Game-Based Approaches to Sustainable Innovation
385
(2017) and Froehlich (2015) for even more case examples of specific
and quantifiable gaming outcomes related to energy, cost, and waste
reduction.
However, the positive impacts achieved from using games may not
be long term. Competition-based challenges—such as where a reward
is given to the participants who recycle the most during a set amount of
time—have shown to have only a temporary effect (Witmer and Geller
1976; Schnelle et al. 1980). Engagement may also be short-lived. For
example, Trash Tycoon, a game about upcycling with almost 20,000
likes on social media platform Facebook shut down after nine months
as developers ‘(felt) the game (had) run its course’ (Tycoon 2012; Fox
2011). This is not unique to the field of sustainability—within the first
three months after launching, the viral mobile game Pokemon Go saw
an 80% decrease in the number of daily US-based players (Siegal 2017).
Other critiques of game-based approaches target the required prepa-
ration and facilitation necessary in their development and implemen-
tation. First, before game-based approaches can be used, they must
be developed and tested. This is time-consuming and costly, espe-
cially if a digital game is being produced. One current trend in game-
based approaches—game platforms that allow users to create their
own game—could address this by enabling easier game creation. Such
approaches are being supported by industry and government initia-
tives such as the project ‘Digital Improvement by Game In Teaching’
funded by Erasmus + 2017 (an EU programme for education, training,
youth, and sport). However, even if a game is developed, a potential
user may decide to not use a game because of time limitations. (To give
an impression, the games discussed throughout this chapter range in
playing time from fifteen minutes to eight hours). Finally, while gamifi-
cation approaches do not usually require additional facilitation, serious
games are not recommended as stand-alone objects and an experienced
facilitator or educator is usually encouraged to successfully place a game
within a broader context (Sitzmann 2011; Whalen et al. 2018). This
not only takes additional time but demands additional expertise and
preparation.
Nevertheless, we find game-based approaches compliment and bring
a fresh, new perspective to sustainable innovation, especially where
386
K. Whalen and G. Kijne
previous approaches have been criticized for being vague and theoretical
(Laurischkat and Viertelhausen 2017). The ability of games to illustrate
complexity in an approachable and understanding way enables them to
depict the wicked problems of sustainable development. The interac-
tion and engagement levels achievable through games (Connolly et al.
2007), as well as their assistance with critical thinking (Ke 2009), are
also attractive to those wanting to engage others in sustainable develop-
ment issues. For example, applications of games within the classroom
have found participants to become emotionally invested in the topic of
sustainability ethics (Sadowski et al. 2013).
Furthermore, customization has been shown to increase motiva-
tion (Cordova and Lepper 1996), and the adaptability of games, such
as by allowing the user to choose challenges or personalize elements,
can increase engagement (Turkay and Adinolf 2010, 2015). While this
is perhaps easier in digital games, this can also be done in non-digital
games. For example, serious games may have ‘expansion’ packs that
increase the challenge level in order to maintain user motivation.
Finally, other characteristics of game-based approaches such as time
compression (Michael and Chen 2006) are well suited to sustainable
innovation. By simulating possible outcomes and allowing players to
experience the consequences of certain actions, otherwise unperceivable
long-term effects may become tangible. This is especially relevant to sus-
tainability where the long-term return on investment is often not relata-
ble (Whalen 2017). These elements of realism not only enable players to
observe potential outcomes, but also learn from them. As active reflec-
tion is a critical part of the learning process (Kolb and Kolb 2005), the
feedback embedded in game-based approaches provides players with the
opportunity to reflect on their actions and choices (Garris et al. 2002).
Conclusion
This chapter has outlined the potential of using game-based approaches
for sustainable innovation by addressing serious games and gamifica-
tion. Our investigation of serious games for sustainable innovation has
shown that this approach is used to provide structure to open-ended
20 Game-Based Approaches to Sustainable Innovation
387
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21
Circular Economy Inspired Imaginaries
for Sustainable Innovations
Rumy Narayan and Annika Tidström
Introduction
The Circular Economy (CE) has attracted a lot of attention in policy
and business, where it is viewed as an important approach for achieving
sustainable development. The CE-concept has its roots in historical,
economic, and ecological fields, which highlights its relevance to sus-
tainable business (Murray et al. 2017). Geissdoerfer et al. (2017: 759)
have defined CE as: “as a regenerative system in which resource input
and waste, emission, and energy leakage are minimised by slowing,
closing, and narrowing material and energy loops”.
CE, therefore, provides impetus for a new economic system with mul-
tiple opportunities for innovation (Korhonen et al. 2018; Geissdoerfer
R. Narayan (*) · A. Tidström
School of Management, University of Vaasa, Vaasa, Finland
e-mail: [email protected]
A. Tidström
e-mail: [email protected]
© The Author(s) 2019 393
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_21
394
R. Narayan and A. Tidström
et al. 2017; Bocken et al. 2016; Ghisellini et al. 2016; Brennan et al.
2015). Innovations hold the keys to sustainable development and sus-
tainable innovation implies ‘a collective commitment of care for the
future through responsible stewardship of science and innovation in the
present’ (Owen et al. 2013). Innovation consequently involves complex
interactions between organizations, technologies, and industry sectors
(Rip 2012; Van de Ven et al. 2008; Abernathy and Clark 1985).
As a critical dimension of policymaking, innovation draws attention
to the imaginations that are associated with it, in terms of unanticipated
risks, uncertainties, ambiguities, social fragility, and so on (Pfotenhauer
and Jasanoff 2017; Jasanoff 2006; Sturken et al. 2004; Beck and Ritter
1992). However, there is also a performative function associated with
these imaginations that explore how innovations are realised through
‘sociology of expectations’ (Pfotenhauer and Jasanoff 2017). Imaginaries
capture and influence ideas, symbols, and feelings. In doing so, imagi-
naries help in producing a shared sense of belonging to guide the col-
lective understanding of our world (Jasanoff and Kim 2009). They
contribute to the emergence of new social and technological configura-
tions for future-oriented businesses with promises of innovation oppor-
tunities that do not exist except in the imaginaries of involved actors
(Borup et al. 2006).
Jasanoff and Kim (2009: 120) have defined such sociotechnical imag-
inaries as “collectively imagined forms of social life and social order
reflected in the design and fulfilment of nation-specific scientific and/or
technological projects”. They are frequently used to elucidate the “hid-
den social dimensions of energy systems”, as they represent important
“cultural resources that shape social responses to innovation” (Jasanoff
and Kim 2013: 189–190). The CE with its focus on reformulating our
relationship with materials and goods (Stahel 2016) through innova-
tions embodies certain sociotechnical imaginaries.
Sociotechnical imaginaries define and shape the understanding of
innovations from diverse perspectives and play an important role in
mobilising the required resources. Sociotechnical imaginaries, there-
fore, are descriptions of futures that are attainable and offer prescriptive
means through which such futures could be attained (Jasanoff and Kim
2009). Sociotechnical imaginaries are visions that involve the creation
21 Circular Economy Inspired Imaginaries …
395
Literature Review
Sustainable Innovations
Sociotechnical Imaginaries
Transition Intermediaries
of the kinds of innovations that are given prominence, the way they
are framed, and the process through which they are finally embedded
within society.
The interconnectedness of sustainability issues demands innovations
to be conceptualised through sociotechnical imaginaries that leverage
the societal dynamics to create a link with what is desirable, with the
help of intermediaries.
Methodology
The empirical study is based on qualitative single case study research,
which was considered as most appropriate as the aim was to get rich
and in-depth information about a previously unexplored phenomenon
(Eisenhardt 1989). The chosen case is Sitra, the Finnish Innovation
Fund, an independent public foundation, which operates directly under
the supervision of the Finnish Parliament. It was purposefully selected,
as it is a key organisation that is building an understanding of current
societal transitions and facilitating the ways and means of generat-
ing discussions and debates on pathways for such transition processes.
Sustainability is an integral part of its agenda and it has identified CE as
a key approach for inspiring sustainable innovations.
The applied research methods were interviews and written docu-
ments. In total, seven semi-structured interviews have been carried out
in June and September 2017. The average length of an interview was
35–40 minutes. The informants were considered as most appropriate
as they have important and influential roles related to Sitra’s CE initi-
ative. The written material was collected from various sessions during
the World Circular Economy Forum (WCEF) hosted by Sitra in June
2017, this included presentations as well as panel discussions.
This study used the grounded theory approach (Jørgensen 2001;
Strauss and Corbin 1994), as at its core, it involved studying a social
process. This approach helped in identifying how the CE creates socio-
technical imaginaries or visions for hypothetical futures that could ena-
ble pathways for sustainable innovation.
21 Circular Economy Inspired Imaginaries …
401
Findings
There are two main findings from this study. The first relates to the role
of sociotechnical imaginaries in prompting a collective process of mean-
ing making for negotiating collaborative paths for sustainable innova-
tion. The second finding is related to the importance of sociotechnical
imaginaries in leveraging national shared culture to develop visions for
sustainable innovations.
The interviews with Sitra and interactions with other actors during the
conference indicated that in Finland, there appears to be a strong iden-
tification with innovations and a certain pride in technological prowess.
This coupled with a deep cultural tradition of making and fixing things
makes CE emotionally and intellectually engaging and practically appeal-
ing. Such culturally specific imaginaries of innovation become productive
means of engagement, as they resonate with the ideas underlying CE.
Through CE, Sitra is inspiring collective sociotechnical imaginar-
ies through a shared national culture of building world-class organi-
sations, exploring entrepreneurial opportunities, and leading to new
job creation and skill development. The idea of a national first mover
advantage acts as a key motivating factor. The appeal of acquiring a
knowledge-based competitive advantage is strong and actors believe that
CE models could, through opportunities for sustainable innovations,
404
R. Narayan and A. Tidström
Sustainable Innovation
Imaginaries inspired by Circular New Collaboration, that includes:
Economy for new models of Business Shared Social Economic
production and consumption Models & & Cultural Environment &
through intermediaries Cleaner Values Social elements
Production
Discussion
For CE, sociotechnical imaginaries offer an approach that enable pro-
cesses of continuous engagement between the dynamics of inno-
vations within their social and cultural contexts. Innovations are
increasingly coming under the purview of practitioners, with diverse
groups of actors engaging in doing, implementing, or fostering them
21 Circular Economy Inspired Imaginaries …
405
Conclusion
The main conclusion of this chapter is that CE has the ability for trig-
gering imaginaries resulting in actions that could facilitate sustainable
innovation processes. From a theoretical perspective, this leads to an
understanding of the social engagements necessary for operationalising
CE models in order to make them sustainable.
For managers, engaging with sociotechnical imaginaries could reveal
the shared meanings and values attached to the practical implemen-
tation of CE models, thus highlighting the significance of social ele-
ments of CE. For instance, collaborating with diverse actors highlight
the relevance of both cultural values and social practices for facilitat-
ing sustainable innovation processes. Sociotechnical imaginaries have
material outcomes in terms of influencing behaviour and narratives as
well as feelings of individual and collective identities. Therefore, they
could be useful tools for practitioners and policymakers who often find
it difficult to qualify what sustainability entails. They can also influ-
ence the development of policy and institutions, and concepts like CE
408
R. Narayan and A. Tidström
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21 Circular Economy Inspired Imaginaries …
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Introduction
Active engagement in digitalisation has become a priority for most
organisations. Digitalisation refers to ‘the social transformation trig-
gered by the mass adoption of digital technologies that generate,
process and transfer information’ (Katz and Koutroumpis 2013:
314). Digital technologies have the capability to provide exact repli-
cation, infinite times at almost zero marginal cost once the required
infrastructure has been established (Iansiti and Lakhani 2014).
Their impacts, despite continuous uncertainty, are likely to be tre-
mendous, and they are approaching us at an unprecedented speed
(Brynjolfsson and McAfee 2015). The globally created amount of data
is expected to increase from the current 25 zettabytes,1 to more than
S. Schneider (*)
School of Economics and Management, Institute of Management
and Business Administration, University of Kassel, Kassel, Germany
e-mail: [email protected]
© The Author(s) 2019 415
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_22
416
S. Schneider
users either on the producer or the consumer side, the more attractive
the platform is for the other side (Casadesus-Masanell and Halaburda
2014). Further, a critical mass of actors on each side is critical for a plat-
form to be potentially successful (Evans and Schmalensee 2010).
- Leverage AI’s (AI) predictions comprehensive Awareness misuse of misuse of (energy and
potential to Capacity of IT to of develop- data collection Smart allo- data and data and consumption)
replace and/or perform activities ments and Effective data cation of manipulation manipula- Additional
augment activities that previously actual needs analysis, pre- resources Loss of work tion equipment
and capabilities of required human Customised cise predictions places Loss of con- required
S. Schneider
(continued)
421
Table 22.1 (continued)
Technologies Potential benefits Potential challenges
Mesh Blockchain Global reach Global reach and Enabler of Unregulated Unregulated Rebound effect
- Establish connec- Peer-to-peer net- and access access crowdfund- environment environment (energy and
422
tions between work that enables Source of trust Source of trust ing and Digital divide Potential consumption)
people, organiza- and records Transaction collaboration preventing misuse of
tions and technol- transactions based efficiencies Reduced equal access data and
ogy to generate on an open, Potential lever- overall con- Shortage manipula-
and deliver digital distributed ledger age of excess sumption to of key tion
S. Schneider
Trivodaliev 2017; World Economic Forum 2018), where they can help
to align the de facto energy consumption in private homes to individual
needs and preferences. However, there are economic challenges, such as
the potential misuse of data or manipulation (Lindqvist and Neumann
2017). Further, since AI often represents a black box of self-learning
algorithms (Davenport 2016), loss of control over algorithms represents
a potential danger connected to these technologies (Hoffman 2016).
Socially, the value of more precise predictions lies in the reduction of
wasted attention spent on alerts and information that recipients receive
based on inaccurate or incomplete data analytics. In contrast, receiving
highly targeted and timely information in combination with customised
solutions to de facto needs can be highly beneficial. One example is the
use of IoT technologies by Seebo,4 a US-based firm that offers intelli-
gent hospital beds that monitor a patient’s temperature and heart rate
and alert caregivers when help is needed. However, such technologies
are powerful tools to reveal very personal or confidential information
that could easily be misused. Further, the increasing use of AI and IoT
technologies to collect and analyse data may threaten human labour
owing to increasing automation and process efficiencies (Dewhurst and
Willmott 2014; Knickrehm 2018).
From an environmental perspective, AI and IoT technologies can
help to increase transparency about environmental conditions. One
example is Ericsson’s Connected Water initiative,5 where connected
sensors collect and communicate data in order to reduce the cost and
efforts required to monitor a river’s water quality. Such transparency can
be help to raise awareness for environmental developments. Further,
transparency combined with intelligent analytics can allow for smart
allocations of resources according to de facto needs, reducing overall
resource consumption (Etzion and Aragon-Correa 2016). However,
more precise information about de facto needs, leading to additional
demand, new equipment requirements (such as sensors or processors)
and additional energy required to measure, transfer and analyse data
may—in turn—lead to a rebound effect, reducing the overall energy
savings.
Digital. Theme 2 refers to the blending of the virtual and the
real worlds through digital manufacturing and AR technologies.
424
S. Schneider
this could help to slow down job losses as a result of automation, digital
manufacturing technologies can also foster a loss of workplaces owing to
increasing automation and efficiency. In addition, individuals may expe-
rience misuses of data retrieved illegally from customised digital manu-
facturing processes.
Environmentally, digital manufacturing processes can improve
resource efficiency owing to on-demand production and reduced waste
during production (Weller et al. 2015). Transportation-related emis-
sions can be avoided by on-location production. Fast and affordable
production of spare parts can further increase product lifecycles (Ford
and Despeisse 2016). AR can further help to raise awareness, as dis-
played by After Ice,11 an artist intervention that visualises future climate
change scenarios based on NASA data. However, digital manufacturing
may also create additional demand, enhancing overall consumption.
Additional resources and energy are required to run digital production
processes and to produce the required equipment. Further, as direct dig-
ital fabrication processes may involve less-skilled actors and potentially
less-suitable materials, these processes could result in higher scrap rates
than standardised mass production (Ford and Despeisse 2016).
Mesh. Theme 3 refers to the connections between people, organisa-
tions and technologies through blockchain and digital platform tech-
nologies. From an economic perspective, digital platforms expand
traditional marketplaces’ geographic reaches. Digital platforms are a
driver of the sharing economy concept, which enables resource shar-
ing and the leveraging of excess capacity. Blockchain technology can
further serve as an independent facilitator of transactions by making
even very small transactions economically viable (Iansiti and Lakhani
2017; Tapscott and Tapscott 2017). The startup Bitbond12 leverages
this opportunity by providing global access to investment and financing
opportunities through a peer-to-peer bitcoin-based lending platform for
small loans. The firm has managed to create a global marketplace for
more than 100,000 borrowers and lenders. Further, the technology can
function as a source of trust for valuable assets and transactions owing
to its reliable database of historic records (Crosby et al. 2016; Iansiti
and Lakhani 2017). Despite a wide range of potential application fields,
including medical data, energy generation and consumption or carbon
426
S. Schneider
emissions (e.g. Giungato et al. 2017; Walker 2017), both the unregu-
lated nature of the technology’s business applications and potential mis-
use and manipulation of data on the blockchain as well as on digital
platforms represent economic risks (Berke 2017; Iansiti and Lakhani
2017). Blockchain-based payment transaction systems have in the past
allowed for illegal trading or money laundering (Foley et al. 2018).
Socially, blockchain technology can help to reduce global
inequalities by providing equal access and enabling efficient micro-
transactions. Also, using blockchain as a source of trusted origin
potentially helps to prevent theft, trafficking and fraud. The startup
Everledger13 has built a blockchain technology-based digital ledger
to track and protect the origins of diamonds. Everledger has report-
edly uploaded more than one million diamonds’ digital incarnations.
Digital platforms further enable engagement and sharing among plat-
form users who may not have met without the platform and who
have excess resources. Firms such as the Berlin-based social impact
startup LEIHBAR14 have further shown that digital platforms and
the sharing economy concept can also be applied in the social busi-
ness context. The firm seeks to strengthen sustainable consumption
by offering affordable rental services of tools, kitchen utensils or
leisure equipment. At the same time, negative social implications
may imply a shortage of relevant resources owing to the economic
attractiveness of using them as a shared good (Martin 2016). This
can potentially negatively impact on urban economies or living con-
ditions (Ricart et al. 2017). In addition to online marketplaces for
goods and services, they also affect the labour market, as shown by
platforms such as Amazon Mechanical Turk.15 This platform offers
an on-demand marketplace with 24/7 availability and global reach.
Such an increase in global collaboration flexibility may also lead to a
shift of responsibility from organisations that employ a human work-
force to individual responsibility in an increasingly on-demand work
context. Global sourcing opportunities may also increase pressures on
local wages and salaries. Further, equal access and consideration of all
actors in the blockchain or a platform is questioned by the ongoing
digital divide (Toyama 2016).
22 The Impacts of Digital Technologies on Innovating …
427
Conclusion
Digital technologies have transformative impacts on business and
society. However, the paths these transformations will take are still
uncertain. This chapter’s main contribution was to establish the links
between specific digital technologies and their economic, social and
environmental impacts. The discussion revealed a multitude of both
positive and negative potential implications. Economic opportunities
centre on efficiency gains and business prospects that build on new
connections, while potential economic challenges include the mis-
use and manipulation of data, dependence on technologies, and high
investment costs. The social opportunities include customised needs
satisfaction and equal individual enablement, while potential social
challenges include job market threats, data misuse and continuing ine-
qualities. Environmentally, the opportunities focus on increasing trans-
parency and awareness and reducing consumption, while the potential
challenges centre on rebound effects owing to additional consump-
tion and production caused by the availability of digital technologies.
428
S. Schneider
Future research should address strategies of how firms can maximise the
positive implications while minimising the negative ones, along all three
dimensions. Further, researchers should emphasise how these technol-
ogies can be used in combination, potentially reinforcing one another
in positive ways. For managerial practice, this comprehensive overview
displays the manifold innovation opportunities enabled by digital tech-
nologies for firms’ current and future business. The simultaneous trans-
parency of economic, social and environmental implications seeks to
motivate incumbents and startups to reflect on the full range of conse-
quences when shaping their digital strategies.
Notes
1. 1 zettabyte = 909.49470177293 million terabytes.
2. Website: https://www.awhere.com/.
3. https://corporate.target.com/article/2015/08/beacon-technology.
4. Website: https://www.seebo.com/.
5. https://www.ericsson.com/thecompany/sustainability_corporateresponsibility/
technology-for-good-blog/2016/09/06/connected-water-how-
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Introduction
Online platforms have become essential for many people. They organise
data streams, economic interactions and social exchanges between users
J. Konietzko (*)
Departments of Design Engineering and Product Innovation Management,
Delft University of Technology, Delft, The Netherlands
e-mail: [email protected]
N. Bocken
Lund University IIIEE, Lund, Sweden
e-mail: [email protected]
N. Bocken · E. J. Hultink
Department of Product Innovation Management,
Delft University of Technology, Delft, The Netherlands
e-mail: [email protected]
N. Bocken
Lappeenranta University of Technology, Lappeenranta, Finland
© The Author(s) 2019 435
N. Bocken et al. (eds.), Innovation for Sustainability,
Palgrave Studies in Sustainable Business In Association with Future Earth,
https://doi.org/10.1007/978-3-319-97385-2_23
436
J. Konietzko et al.
(continued)
Table 23.1 (continued)
Role Literature description Key potential for a circular
economy
Co-create Enablers of citizen and community participation, empowerment, collective Repair, (re-)design, own,
action, inclusive co-creation of internet-of-things applications and open manufacture
innovation, with an emphasis on smart cities (Lee et al. 2014; Stratigea Share knowledge and
et al. 2015; Hribernik et al. 2011; Anttiroiko et al. 2014) information
A means for information exchange, knowledge creation, feedback, debate, Debate and learn
learning, innovation and social networking (Medema et al. 2014), encour-
age partnerships and co-creation of sets of platform elements (Evans
et al. 2007)
23 Online Platforms and the Circular Economy
439
440
J. Konietzko et al.
allocated the relevant literature2 within these three roles, and what their
key potential is in enabling a more circular economy. In the following
sections, we describe this in more detail and provide examples for how
these three roles have been put into practice.
Market
Online platforms serve as electronic markets (Alt and Klein 2011). They
coordinate exchange between groups of platform actors (Chasin et al.
2017), by handling their communication, providing market overviews
and price transparency, supporting customer decisions and sharing rel-
evant information (Alt and Klein 2011). Moreover, crowdfunding plat-
forms have been described as promising sources of sustainable venture
capital (Bocken 2015).
As electronic markets in a circular economy, online platforms can
potentially help slow resource loops by enabling access to existing prod-
ucts. This is often referred to as the sharing economy. Examples include
Peerby (enables temporary access to private goods like drills or bicy-
cles) or Airbnb (enables temporary access to private homes). Reduced
transaction cost has enabled people and organisations to share access
to their products and thereby reduce and monetise their excess capac-
ity (Frenken and Schor 2017). For example, three empty seats in a
car while driving on the road equal to an excess capacity of 75%. If a
person makes these seats available, then he or she is decreasing and/or
monetising excess capacity, enabled by reduced transaction cost. This
form of ‘sharing’ as an economic transaction has become a recognised
business action for implementing a circular economy (EMF 2015). The
idea is that excess capacity might help to slow resource flows because
using existing products instead of buying new ones can reduce the need
for new products and associated resources.
Even though many sharing economy platforms have claimed environ-
mental benefits, they also seem to inhibit sustainability (Frenken and
Schor 2017). For example, they have expanded trade volumes and cre-
ated additional purchasing power beyond reducing the excess capacity
of existing products (ibid.). This has led to indirect rebounds that can
23 Online Platforms and the Circular Economy
441
Operate
providers (e.g. restaurants) who can promote their offerings through ads
that are shown on the vehicle displays. The software orchestrates this
complex service ecosystem through careful, collaborative design.
Co-create
Recommendations for Practitioners
The highlighted roles of online platforms can serve as a playground for
firms to come up with new ideas for transitioning towards a circular
economy. Figure 23.1 provides an overview of the three roles.
Some example questions to support ideation of how online platforms
can be used to market, operate and co-create products, components and
material include:
23 Online Platforms and the Circular Economy
445
• Market:
– How can a firm use existing online platforms to reduce the excess
capacity of their products? How radical would this be compared to
the current way of doing business? How can this become a viable
possibility, e.g. by collaborating with online platforms?
– Does a firm have waste materials that can potentially be traded via
online platforms? Can waste materials that are traded on online
platforms be used as product inputs?
• Operate:
– How can firms connect to existing online platforms to offer and
evolve their products and services as part of larger product-service
systems? What kinds of collaborations would be needed for that?
– How can firms collaborate with others to co-create new online
platforms that support the circular economy?
446
J. Konietzko et al.
• Co-create:
– How can firms use online platforms as a tool to co-create circular
products, components and materials, as well as services, with out-
side parties?
– How can firms leverage online platforms to obtain and share infor-
mation and knowledge about their products in support of the cir-
cular economy?
New ideas are usually full of assumptions about how and whether they
are desirable, feasible and viable (Osterwalder et al. 2014). A next step
would then be to formulate, prioritise and test these assumptions. For
example, finding a way of reselling already-sold and used products via
online platforms assumes that this aligns with the existing firm philos-
ophy, that a particular set of customers desire them, that it is feasible to
do this in terms of available and accessible skills and resources, or that
it is viable in terms of costs and benefits. Conducting business exper-
iments to test these kinds of assumptions can help make first steps to
start leveraging the roles of online platforms for narrowing, slowing
and closing resource loops (Bocken et al. 2018). This requires an open
mindset: only by allowing new ideas to emerge, and by testing their
assumptions will firms ‘fail forward’ (Ries 2017) and learn how they can
transition towards a digital, circular economy.
Conclusion
This chapter has highlighted three roles online platforms can play in
enabling a circular economy. First, as markets, they can reduce excess
capacity and enable the reselling of used products, components and
material. Second, in their role as operators of product-service systems,
they can coordinate complex service ecosystems and inform main-
tenance and repair needs. Third, their role in fostering co-creation
opens new ways for collaborating and participating in different kinds
of activities. Examples have shown how these roles have been leveraged
in practice. With this work, we hope to inform practitioners about the
23 Online Platforms and the Circular Economy
447
Notes
1. We acknowledge that this is a bit like comparing apples and oranges. But
it indicates how rapidly and at what scale platforms have been growing.
2. We used literature from a targeted search in the most cited articles on
sustainable innovation. Even though the focus of this chapter is on the
circular economy, we used literature on sustainable innovation because
the former has emerged from the latter and can therefore be further
informed by it. We used a variety of search strings (e.g.: “sustainable
innovation” AND platform* (results: 35); or: platform* AND sustain-
ability AND innovation (results: 294); or: ‘sustainability AND digital*
AND platform*’ (results: 181) or ‘sharing economy AND sustainability’
(results: 58) for titles, keywords and abstracts in the academic database
SCOPUS. We filtered articles that: (1) clearly refer to online platforms
as defined in this article, (2) are no older than ten years and (3) that have
been cited more than 10 times or have been published within the last
two years. We ended up with 15 articles for review.
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Index
203–206, 215–217, 222, 248, Collaboration 45, 48, 64, 69, 72,
254–259, 262, 271, 272, 298, 84, 85, 87, 88, 90, 91, 110,
301, 305, 337, 340–342, 348, 148, 159, 161, 165, 170, 171,
354–357, 359, 360, 362, 366, 180–182, 186, 189, 200, 201,
367, 371, 378, 381, 382, 397, 203, 206, 224, 244, 298, 299,
399, 416 302, 354, 355, 366–368, 371,
Business models for sustainability 395, 401, 402, 406, 408, 426,
195, 204 445
Collaborative solutions 2
Collective intelligence 297, 302–304
C Complex adaptive systems 6, 8, 23,
Circular business 9 30, 49, 302, 304, 305
Circular business model experimen- Complexity 23, 60, 69, 136, 147,
tations (CBME) 355, 356, 148, 161, 162, 165, 170, 244,
359, 360, 370, 371 292, 294–296, 314, 339, 345,
Circular business model innovation 356, 382, 386, 397
(CBMI) 7, 9, 78, 79, 81–87, Conflicting aims 10, 158, 162, 165,
89–92, 354, 357, 358, 379 167, 171
Circular business models (CBMs) Consumer behaviour 203, 383
12, 78, 79, 181, 186, 188, Contextual diversity 302
189, 354, 355, 358, 359, 370 Conventional innovation 136, 138,
Circular economy (CE) 10–13, 36, 139, 141, 142, 195, 338, 339,
38, 40, 42, 49, 62, 67, 68, 78, 343, 345, 346, 348
85, 87, 92, 98, 104, 181–183, Corporate innovation process 146,
185, 205, 218, 283, 336, 336
353–355, 364, 370, 393, 395, Corporate social responsibility (CSR)
397–407, 436–438, 440, 441, 22, 125, 128, 197, 283
443–447 Corporate triple bottom line value
Circular economy transitions 14 creation priorities 346
Circular product design 82 Creating value from waste 41
Circular services 81, 82, 86–90 Creativity 41, 42, 118–120, 144
Climate action 2, 284 Cross-disciplinary 3, 7, 13, 244
Climate change 1–3, 21, 30, 35, 62,
71, 98, 99, 102–104, 135,
273, 283, 294, 383, 398, 425 D
Co-create 12, 42, 439, 443, 445, Decision-making 136–145, 148,
446 160, 161, 167, 169, 170, 247,
Co-create products 437, 443, 444 256, 285, 292, 302, 361, 365
Coevolutionary 23 Decision-making challenges 169
Index
453
L
Large businesses 10, 135, 136, 143, P
147, 148, 150, 151, 371 Planetary boundaries 2, 35
Leadership 3, 7, 9, 10, 13, 41, 102, Proactive strategy 286
118–121, 123, 126–129, 136, Product architecture 292, 298, 302,
141, 147, 148, 150, 161, 183, 304
195, 272, 283 Product innovation 11, 40, 139,
Lean startup 343, 359, 360 149, 292, 312–317, 319,
Lean startup approach 336, 339, 347 321–324, 357, 378, 438
Localism 10, 194, 196–198, 200, Product portfolios 90, 316, 318,
203–207 319, 322
Long-term competitiveness 4, 378 Product-service systems 12, 65, 182,
Low-carbon economy 103 438, 441, 442, 445, 446
Proto-institutions 286
Index
455
R Slow production 49
Radical sustainable innovation 140, Social enterprise 6, 39, 43
141, 143 Social entrepreneurship 39, 215
Rapid experimentations 356–358, Social innovations 3, 27, 39, 48, 49,
364, 365 61
‘Rational action’ approach 142 Social learning perspective 149
Rebounds 440, 441 Social simulations 376
Redesign 10, 81, 89, 170, 181–183, Sociotechnical imaginaries 394, 395,
236, 237, 297–299, 354, 402 397, 398, 400, 401, 403–407
Regenerative economy 78 Socio-technical systems transitions
Remanufacturing 41, 78, 80, 81, for sustainability 63
397, 437, 442 Socio-technical transitions 9, 22, 63
Renewable energy 29, 35, 49, Strategic environmental goals 11,
103–105, 107, 217, 218, 224, 313, 315, 316, 318–323
300, 399, 442 Structural impediments 10, 158,
Resource efficiency 80, 88, 89, 105, 162, 163, 166, 171
106, 109, 185, 188, 189, 237, Sufficiency-driven business models
312, 342, 398, 425, 436 43
Resource sufficiency 353 Supply chain 41, 71, 157, 159, 166,
Responsible innovation 39 187, 194, 197–200, 203–205,
Reversing materiality 11, 274, 285 283, 284, 292
‘Rule following’ approach 142 Support tools 376
Sustainability assessment 26, 255,
257, 259, 261–263
S Sustainability communication 278
Serious games 12, 376–378, Sustainability impact 11, 246, 293,
381–387 343
Service-logic 10, 181–183, 185, 186, Sustainability impact assessment
188 254, 256
Shared value 10, 21, 22, 30, 39, 41, Sustainability issues 2, 3, 13, 150,
49, 84, 193, 194, 203–206, 180, 186, 187, 245, 272, 273,
314 275, 279, 281, 292, 294, 296,
Sharing and take-back models 81 359, 387, 400
Sharing economy 23, 26, 425, 426, Sustainability-oriented innovation
437, 438, 440, 447 (SOI) 3, 7, 21, 22, 28, 30, 49,
Sharing economy platforms 437, 65, 118, 140, 194, 195, 204,
440, 441, 443, 444 235, 271, 396
Slow fashion 48, 69 Sustainability paradigm 97
456
Index
V W
Value proposition 29, 79, 81, 87, 90, Waste to management 41, 48
142, 182, 216, 258, 259, 261, Water–Energy–Food Nexus (WEF
262, 341, 344, 346, 354, 359, Nexus) 105
370, 382 Whole life-cycle thinking 41