The Effect of Sustainability as Innovation Objectives on Innovation Efficiency

Abstract

Though sustainability exists as major objective of pursuing innovation, the effect of it on innovation performance is still unanswered. While the outcome of innovation should consider both input and output, moreover, studies on sustainable innovation are yet to consider the overall efficiency, but rather the performance itself. To fill the gap between the effect of sustainability as the objective of innovation and its innovation performance, and to bridge the hole between the outcome of sustainable innovation and its efficiency, we analyze the relationship between sustainability as innovation objective and innovation efficiency. We use 441 manufacturing companies in Korea from 2016 KIS data, and perform the data envelopment analysis (DEA) method to calculate efficiency score of each firm and tobit regression analysis to investigate the effect of sustainability as an objective of innovation on innovation efficiency. The results show that the objective of 'environmental improvement' negatively affects innovation efficiency, while 'safety improvement' positively affects the efficiency. On the contrary, the effect of 'material and energy reduction' as an objective of innovation on innovation efficiency is not verified. The implications, limitations, and guidelines for future research are presented.

Efficiency Evaluation of Regional Sustainable Innovation in China: A Slack-Based Measure (SBM) Model with Undesirable Outputs

“…Chen et al [101] developed a dynamic analytical framework of regional R&D efficiency systems, considering the dynamic interdependence between regional R&D activities over different periods, and they ascertained that eastern China had a higher efficiency than other provinces. To date, the relationship between sustainable innovation and innovation efficiency has been vague [70]. Several researchers have paid attention to the performance and efficiency of sustainable innovation.…”

“…Several researchers have paid attention to the performance and efficiency of sustainable innovation. Shin et al [70] calculated the innovation efficiency of Korean companies, considering sustainability through a DEA method, and found that environmental improvement could negatively affect innovation efficiency. Wang et al [21] studied the innovation efficiency of green performance in 29 sectors of China's manufacturing industry, and found a shift to green innovation in these sectors.…”

“…Effective methods to achieve sustainable development also include controlling population growth and economic development, while strengthening technological innovation to reduce the impact on the environment. Goals of sustainable innovation can be to improve sustainable innovation efficiency by means of, for example, alleviating excessive dependence on virgin natural materials, destruction of landscape, and use of fossil-based forms of energy [21,[69][70][71]. Given the growing worldwide attention on environmentally sustainable innovation, it has become increasingly important to consider how to balance innovation in new product development, process and service innovation, and economic growth with environmentally sustainable innovation goals, like pollution mitigation and energy conservation [72].…”

Does Reduction of Material and Energy Consumption Affect to Innovation Efficiency? The Case of Manufacturing Industry in South Korea

“…The objectives of sustainable innovation could be categorized into several components depending on literature, previous studies included reduction of raw material and energy consumption as key sustainability-related objective in common. Kunapatarawong and Martínez-Ros [11] divided sustainability-related objectives into: (1) reducing material usage, (2) reducing energy usage, (3) mitigating environmental impact, and (4) complying with the environmental requirements, while Shin et al [23] categorized sustainability-related motivations into three: reduce material and energy, improve environment, and improve safety of workers or environment of their workplace. Moreover, Poussing [24] argued that: (1) reduction of material and energy cost and (2) reduction of environmental impact are two environment-related innovation objectives, and Ulvenblad et al [25] classified maximization of material and energy efficiency as one of the major sustainable business model archetypes.…”

Reducing Risks in Energy Innovation Projects: Complexity Theory Perspective

“…Since innovation does not represent a linear process [17], the innovation feature of energy projects, by its very nature, contains elements of non-linearity or nonlinear behavior (for example, technical systems when operated close to saturation). Creativity is often brought in connection with a chaotic, experimental, unpredictable atmosphere, and poorly structured process [18], therefore engaging more people in the creative processes does not necessarily mean achieving better energy performances.…”