How to Make Product Innovation Processes More Sustainable? A Literature Review

Table of Contents

I. INTRODUCTION

II. METHODS

III. BUSINESS SUSTAINABAILITY
3.1 Integration of sustainability strategy in businesses
3.2 Characteristics of sustainable product innovations
3.3 Sustainable product innovation as a competitive advantage

IV. THE SUSTAINABLE PRODUCT INNOVATION PROCESS
4.1 Innovation processes in the past and today
4.2 The sustainable idea generation process

V. SUSTAINABLE PRODUCT DEVELOPMENT
5.1 The sustainable product life cycle
5.2 Creating sustainable value in product innovation process stages
5.3 A pioneer in sustainable product development: The Body Shop

VI. CONCLUSION

VII. LIMITATIONS OF SUSTAINABLE PRODUCT DEVELOPMENT
7.1 Limitations and barriers of sustainable product development in practice
7.2 The real sustainable product innovation performance of business – a problem of greenwashing

VIII. MANAGERIAL IMPLICATIONS

IX. SCIENTIFIC IMPLICATIONS

How to Make Product Innovation Processes More Sustainable?

A Literature Review

This paper addresses the pressing and rapid shift toward greater sustainability in businesses due to the advanced stage of environmental degradation. The viability and competitiveness of a business is secured through sustainable product innovation development, which has been proven by the latest sustainable products and services. The term sustainability is precisely aligned with sustainable product innovation thinking and processes. In addressing this issue of product sustainability, I provide a concept for fostering sustainable innovation thinking and define certain sustainability criteria linked to each stage of the product innovation process. It has been shown that the reconciliation of sustainable criteria with the product innovation process is challenging. Limitations arising from sustainable product innovation development, such as greenwashing are discussed and reveal that the concept of sustainability has not been implemented properly in business practice so far. In particular, there is also a lack of scientific studies regarding the holistic approach to sustainable product innovations. Generally, fundamental innovation theories need to be improved by sustainability criteria, because keeping up with the sustainability trend will be one of the most challenging and important tasks in the future for businesses to maintain their competitiveness.

List of Figures

Figure 1: Three dimensions of sustainability

Figure 2: Sustainable innovation thinking

Figure 3: Sustainable idea generation process

Figure 4: The sustainable product innovation process (Part 1)

Figure 5: Sustainable product life cycle stages

Figure 6: The complete sustainable product innovation process (Part 2)

List of Tables

Table 1: Generations of Innovation Process Models

Table 2: Sustainable Product Innovation Process

Table 3: The Seven Sins

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

I. INTRODUCTION

“Your task is not to foresee the future, but to enable it.”

(Antoine de Saint-Exupéry)

The theory of global sustainable development, also known as the ‘three pillar’ (Klöpffer, 2008: 90) concept, originated in the Brundtland Report in 1987 and was defined as follows: “27. Humanity has the ability to make development sustainable in order to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Commission, 1987: 16). Since then, many national sustainability concepts have been established to cope with alarming problems such as climate change (Schneider, 2008), air pollution (Shrivastava, 1992) and population growth (Ehrlich & Ehrlich, 1990). In The Population Explosion, Ehrlich and Ehrlich (1990) presented a formula for expressing the environmental burden which is influenced by population, affluence and technology (environmental burden = population x affluence x technology). Based on reasonable estimates, the world’s population will reach 11 billion in 2030 (Shrivastava, 1995), one of the most worrisome changes in the formula. Given that the population factor rises so much, even under the assumption that the other two factors remain constant, the environmental burden will reach a tremendous level. The sustainability philosophy, however, requires reducing or stabilizing the environmental burden (Hart, 1995).

The need for sustainable development has been discussed broadly on the macroeconomic level (Shrivastava, 1995) and reached an interim peak at the Rio Earth Summit in 1992 with the adoption of Agenda 21, which also contains detailed guidelines for businesses to fulfill the concept of global sustainable development (Kleine & Hauff, 2009). Nonetheless, the global sustainability paradigm has failed to clarify how businesses must change and what they must do, especially in the case of product innovations, although recently concepts such as The Triple Bottom Line (Elkington, 1994, 1998, 1999) have focused on the sustainable innovation development of businesses (Pujari, 2006).

In this paper, I have summarized the most prevalent scientific concepts for a sustainable innovation approach in businesses in order to present a new concept for a complete sustainable product innovation process. Integrating sustainability criteria into the product innovation process is also supported by recent government and market efforts (Maxwell & Van der Vorst, 2003), and some businesses already evaluate their innovation work in terms of sustainable targets (Adamczyk, Hansen, & Reichwald, 2009).

This is the case with car2go in my opinion. It represents a very successful business concept, combining a sustainable product with additional services, and was recently launched in Munich on June 14, 2013. The business concept of car2go represents the world’s first urban fully flexible rent-a-car system with short term rentals (Daimler, 2013). Car2go is one of the fastest growing businesses in the car sharing market and a market leader in the segment of station-independent offers. Presently, car2go can boast of 400,000 registered members with a total of about 8,000 cars worldwide, including 1,000 cars which are battery-driven. Stuttgart, for example, is only equipped with battery-driven Smarts (Daimler, 2013).

As The Financial Times (2013) reports, car2go is connected to the complementary service program Moovel, which is able to search for the most advantageous form(s) of transportation on a special route via an application. According to Daimler (2013), the mobility platform will be activated in Munich soon, which will be a bonus for the users when car2go is also linked with myTaxi and mitfahrgelegenheit.de.

In short, car2go is an example of a sustainable innovation concept which goes beyond a new product innovation by offering additional complementary services (Hansen, Bullinger & Reichwald, 2011). On the one hand, car2go aims to provide a futuristic concept of battery-driven vehicle solutions, which addresses environmental protection criteria, and on the other hand it satisfies customer needs by offering additional car sharing services (Tan & Raghavan, 2004).

Mont and Tukker (2006) argue that special additional services for already sustainable product concepts also improve the sustainability impact. Car sharing, for example, prompts a “more selective use of the cars (Mont, 2004: 143) because it must be organized beforehand and therefore ensures a greater incentive “[…] for people to drive less” (Mont, 2004: 143). Consequently, additional service features increase the lifetime of a product, and reduce waste and the number of used products (Hansen et al., 2011).

As Hansen, Große-Dunker and Reichwald (2009) argue, the combination of products with service innovation has the ability to increase the impact of sustainability on a higher level by meeting the customers’ need for mobility in a different way.

In the following, to establish a basic understanding of the sustainable innovation approach in businesses, the main focus is on product development (Cooper, 2001; Ernst, 2002; Radnor, & Noke, 2006), whereas product innovations can be defined as qualitatively novel products or processes which differ from the previous condition distinctly (Hauschildt & Salomo, 2011). I then relate this product innovation development to the research questions of how to make product innovations more sustainable by reviewing the literature.

This seminar thesis is broken down into eight parts. The next part presents the methods of research and knowledge acquisition for sustainable product innovation in businesses. The third part discusses the argument that sustainable innovation offers a competitive advantage, defines precisely the dimensions of the sustainability concept in businesses and also connects it with product innovations. The two main parts focus on the concept of how to implement sustainable innovation thinking into the core of value creation and the gradual formation of a sustainable product innovation process – which is ultimately illustrated in the business strategy of The Body Shop – and the findings from this approach are summarized. Finally, the limitations of sustainable product innovation (SPI) in practice are outlined, and the paper concludes with managerial as well as scientific implications, which should both encourage extensive future research.

II. METHODS

In researching articles for the paper “How To Make Sustainable Innovation Processes More Sustainable – A Literature Review”, I used the snowball method, beginning with the papers of Dr. Erik G. Hansen, who is a junior academic at the Center for Sustainability Management at the Leuphania University of Lüneburg in Germany with an academic focus on innovation management, entrepreneurship and organizational change in sustainable development. Leuphania University conferred on him the award of ‘Best Young Researcher’ (Fermum, 2013). Access to his papers was provided via his homepage and e-mail contact. Through his papers I gained initial insight into how product innovations can be made more sustainable.

Simultaneously, I studied the established theories on innovation thinking, product innovation development in businesses and gained knowledge of the extensive and young field of research into sustainability on a micro and macro level. All the relevant papers were provided by the most popular scientific research databases, such as ebsco, jstor and google scholar, whereas the books were accessed via the university library and google books. For the online research, compound noun terms such as sustainable innovation, sustainability development, innovation processes, greenwashing were used to gain access to the literature reviews published in acclaimed business journals such as Academy of Management Review, Journal of Business Ethics, Journal of Product Innovation Management, and Journal of Cleaner Production. I researched mainly in these journals because they are leading publications and helped structure the content of my paper.

The Academy of Management Review provided me with an initial overview of the general sustainable development of businesses, for example corporate social responsibility, codes of conduct and sustainable innovations. Whereas the articles in the Journal of Business Ethics were helpful with regard to the urgent need for general sustainable development, especially in businesses. The articles in more specific journals with a practical focus, such as the Journal of Cleaner Production, supported my approach to developing a sustainable product innovation process concept. To conclude, specific information about the presented examples of companies, such as car2go, The Body Shop and Shell were retrieved from homepages and email correspondence with the reference persons.

III. BUSINESS SUSTAINABAILITY

3.1 Integration of sustainability strategy in businesses

“This requires the reconciliation of environmental, social and economic demands – the ‘three pillars’ of sustainability.” (United Nations General Assembly, 2005)

In 1973 the “iron law of responsibility” (Davis, 1973: 314) discusses how big corporations have the duty to assume social and ecological responsibilities because they have sufficient resources and global influence. Schmidheiny (1992), Welford and Gouldson (1993) support this duty by adding aspects like corporate knowledge and sufficient capacity, which enable businesses to follow sustainability strategies. Other arguments range from sustainable development as a competitive advantage (Barrett, 1991; Hart, 1995; Shrivastava, 1995) to ethical and normative values (Bansal & Roth, 2000; Winn, 1995; Wood, 1991; Schumacher, Wasieleski, 2013), which are discussed later in this paper.

Businesses are challenged and forced to integrate long-term strategies such as sustainable innovation development into the core of value creation (Louche, Idowu & Leal Fihlo, 2010) in order to keep up with sustainability change and stay competitive and save the needs of future generations. The need to integrate the sustainability approach in businesses is explained in the Triple Bottom Line (TBL) concept invented by John Elkington (1994). He argued that businesses are now forced to develop extended “win-win-win” strategies where “[…] the company, its customers and the environment” (Elkington, 1994: 90) gain an advantage.

In this paper I am focusing on the TBL, which aims to measure business success along the three bottom lines: economic, environmental and social performance. These three dimensions are closely interrelated, as Figure 1 shows below.

Figure 1: Three dimensions of sustainability

Abbildung in dieser Leseprobe nicht enthalten

Source: Dyllick, Hockerts, 2002: 136, adopted directly, graphic slightly altered

Surplus value can only be achieved by considering all three criteria, but because there is just one planet earth, “[…] the ecological system ultimately constrains the societal and economic spheres.” (Hansen & Große-Dunker, 2013: 2409). To achieve a holistic sustainable innovation strategy with respect to the TBL paradigm, economic sustainability must be guaranteed and include that “[…] at any time a cash flow [is] sufficient to ensure liquidity while producing a persistent above average return to their shareholders” (Dyllick & Hockerts, 2002: 133).

For more than a century the focus was exclusively on the economic performance of businesses. But now, the TBL theory incorporates other business obligations, such as stakeholder interest integration, which go beyond just the economic profit maximization aspect (Norman, MacDonald, 2004). Stakeholder integration covers employees, customers, governmental institutions, communities and also non-governmental organizations (NGOs) (Elkington, 1998; Norman, Mac Donald, 2004).

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