The impact of sustainability and innovation on business performance

There is scientific evidence that companies with a strong commitment to innovation and sustainability outperform competitors with lower commitments. In the International Business Review of October 2015 the researchers Costa, Lages & Hortinha show that the relationship between innovation, sustainability and business performance is more complex. They show that sustainability and innovation lead to better business performance especially when it concerns explorative innovation (the development of new products). Sustainability and explorative innovation appear to have a synergetic effect.

Exploitative innovation, where companies keep their product line the same but improve processes or product features, did not show the same synergetic effect between sustainability and innovation. One of the reasons can be that these type of exploitative innovations are not noticed in full by the customers.

Perhaps better communication could lead to a better understanding of the customer but also to a better co-operation to create more synergy between sustainability and innovation in general.

Norbert Bol

Literature

Costa, C., Lages, L. F., & Hortinha, P. (2015). The bright and dark side of CSR in export markets: Its impact on innovation and performance. International Business Review.

Photo credit: tochis / Foter / CC BY-NC: Do others see what you see?

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