ABSTRACT:
In today’s highly competitive business world, innovation has played a crucial role in exploring the operational actions and conducting the managerial actions that managers and their staff must do to enhance business performance as well as achieve business advantages. It is essential for businesses to continuously improve products and services to better satisfy customers. Moreover, profit also is the key to basic financial survival of businesses. However, the current biggest challenge for many businesses is the ability to meet customers’ needs. That is the reason why innovation plays a significant role in the success of any company, and investment in sustainable innovation is one of the most effective solutions that business leaders use to reach their target. This paper is to provide an understanding of sustainability and innovation as well as the essential role of sustainable innovation.
Keywords: sustainable development, green innovation, competition, innovation policy
1. Introduction
In the global competitive market, it is difficult for companies to get a good position unless they have good strategies to ensure their product or service meets the demand of markets and customers. It can be said that the advantages of the fourth industrial revolution have impacted on individual’s lives both directly and indirectly. We have acknowledged that radical developments have changed virtually every element of life, including a significant impact on even state power capability, and altering the behavior of customers. Innovation has been considered as a core value for the success of any company because it describes both their sensitivity and vision of fluctuating markets. Innovation’s benefits are significant. However, not every innovation will bring success to the firms. That is reason why people say that innovation is known as a “sweet - trap” attracting people despite risk. Most companies understand that they will be substituted or alternated whether they want or not if they do not comply with the rules and requirements of market tendencies. It is said that innovation has been interpretated as an opened window for every oriented business activity in the digital revolution, and marketing is a significant example. Fortunately, policymakers recognize that innovation is essential for business growth which including value, output, or profit, and applying innovation in marketing is what must do. It can be considered as a tool to explore new markets potential and customer’s need as well as receiving the feedback to ensure that new products will be accepted by the market.
Due to its status as a vital component of development, economic growth has long been a key macroeconomic goal. As a result, several investigations have been carried out to identify the factors that might spur economic growth. Innovation is one of the most crucial factors since it makes products more competitive and opens new markets for businesses (Nissan et al, 2012). Additionally, Castano and his research group contend that market expansion and innovations have a key influence in promoting economic growth (Castano et al, 2015). Innovation is one of the vital drivers of corporate activity which has a beneficial direct and indirect impact on the economic development of a nation.
The structure of this study is shown in three sections: (1) referring to definition of sustainable development, (2) interpreting the concept of innovation and sustainable innovation, and (3) providing suggestions on how companies can innovate sustainably.
2. Sustainable development
There are several existing definitions for the term ‘sustainable development’ that are mentioned in this paper. The first concept was introduced in 1980 in the report of the International Union for Conservation of Nature and Natural Resources. Sustainable development is defined as ‘the integration of conservation and development to ensure that modification to the planet does indeed secure the survival and well-being of all people’. (Schiederig T. et al, 2011; Dresner, 2008). And the essential notion was used by Brundtland (1987) with her report “Our common future” as ‘sustainable development’ is referred as “development that meet the needs of the present without compromising the ability of future generations to meet their own needs”. In contrast to the traditional definition of development, which mainly focuses on economic growth, Brundtland proposed a new concept that emphasizes the need to include a variety of factors: social, environmental, and economic advancement are severely linked if we wish to achieve sustainable development. Furthermore, some studies stated that if we want a long-term and lasting development that contributes to the quality of life, we cannot exclusively concentrate on the economic expansion of the community because “money makes life more comfortable, but not more sustainable”. It means that sustainable development (SD) and sustainability must be considered as a long-term goal.
3. What is innovation?
Many authors have stated the definition of innovation in the early period of research history. Some people argue that innovation is generally considered as a firm’s competitive advantage regarding with growth and profitability (David B. Audretsch, Alex Coad & Agustí Segarra, 2014). Meanwhiles, another definition with more complex analysis when considering the innovation is “the implementation of a new or significantly improved product (service or good), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations” (the OECD). Also, according to Kevin Laland, a scholar from University of St. Andrew’s, the concept of innovation is a notion which requires “lots of connections and copying because that does not matter how much novel invention takes place, unless those inventions are replicated accurately then they die out before they can be built upon”. At the same time, another expert, Nick S. (2016) considered innovation is as “Turning an idea into a solution that adds value from a customer’s perspective” while David Burkus, associate professor of management at Oral Roberts University, a famous author, and award-winning poscaster defines that the innovation is “the application of ideas that are novel and useful”, in his opinion the capacity to come up with original, beneficial ideas is the root of innovation, but until those ideas are implemented and scaled, they remain little more than ideas.
Despite receiving much criticism, Schumpeter was one of the first researchers to use the term “innovation”, and innovation economists still frequently refer to his definition about innovation as “the economic impact of technological change” and “the use of new combinations of existing productive forces to solve business problems” (Maria, 2012). According to Smith (2005), novelty is central to the notion of innovation and measuring novelty is the first difficulty to overcome. Even if novelty may be quantified, he argues that the term ‘new’ has to be defined. Smith also claims that something may be old but new to the company, it might be a completely fresh concept, or it might merely be a little adjustment. Additionally, Terziovski (2010) refers to innovation as “the technical, design, manufacturing, management and commercial activities involved in the marketing of a new (or improved) product or the first commercial use of a new (or improved) process or equipment”.
Different authors have proposed different opinions; however, the basic points of innovation strongly have linkage with the newness. Innovation could be the process transferring and applying inventions into commodities appearing on the market to create value for the company through trading or providing them to meet the demands and expectations of clients. The fundamental content of innovation is to upgrade the speed of processes, incorporate new ideas into manufacturing, and obtain final goals (such maximizing the commercial benefit, fostering sustainable economic development of social projects efficiency). Figure 1 below describes decision making process in management to apply innovative thinking to the final step of profitable process.
Figure 1: Innovation path for efficiency of innovation to benefits
Source: Kogabayev et al., 2017
4. How to innovate sustainability
“Sustainable innovation” addresses these unplanned social and environmental effects. It means that businesses can offer their products (goods and services) that are advantageous to both these firms and society in the long run. The article defines sustainable innovation, examines its relevance, and provides recommendations for making it a reality.
Adams et al. (2015), who conducted and reviewed research on the sustainable innovation topic, propose that it involves building intentional adjustments to company’s good, services or business processes to offer environmental and social gains in the long-term while creating financial achievements for the enterprises.
By concentrating on environmental factors before the competitive rivals, simultaneously enhancing the quality of products and/or business processes that related to issues such as environmental effects, and gaining some benefits of manufacturing their products with low energy and low pollution spending in global business conditions, businesses can actually incorporate green innovation to improve as well as maintain advantages in competitive situations (Arranz et al. 2019, Porter et al. 1995). Next generations' circumstances would not be harming in this way. Similar to entrepreneurship, it is useful to understand how each of these inventions will affect sustainable development.
Businesses must develop their core competencies to obtain competitive power through green innovation. According to the research published by Sezen & Cankaya (2013), making management plans based on environmental challenges and crucial components of adjusting to clients needs in order to achieve performance in part of managing the company environment. Thus, every enterprise will need to choose the suitable innovation strategy that makes the effectiveness and success for themselves. Some among them could use a variety of innovative strategies, meanwhiles the others maybe choose different ways. For instance, an oil and gas business can invest in advances in renewable technology to wean itself off of fossil fuels while still seeking efficiency in cutting carbon emissions.
The term of sustainable innovation may be divided into three basic sectors, namely operational improvement, organizational change, and system development. These several categories, which were examined by Adams and his team (Adams et al. 2015) are represented in figure 2 below. These factors have different effects on the results of process, and the most influence part is “systems building”.
The first element is Operational optimization (Eco-Efficiency). Without fundamentally altering their company concept, businesses can enhance their operational procedures. Companies can find the best solutions to "do the same things better" and decline their detrimental effects on the environment and society (for example, trying use renewable energy resource or cutting packaging). This may be achieved quickly by creating a balance combination between social and environmental factors, and current quality or profit goals. This method is sometimes mentioned as "eco-efficiency."
Figure 2: Firms can engage in three types of sustainable innovation
Source: Adams et al. (2015)
Organizational transformation (New market opportunities). Enterprises can produce innovative new services and goods that meet social needs and promoting the environment to make a bigger modification. In this step, firms should focus on "doing good by doing new things" rather than "doing less damage". These companies also recognize a commercial capability in sustainability. There are some samples of sustainable innovation including the creation of the biofuel from coffee waste, or the models of smartphone – a process that demonstrates how firms may apply sustainable innovation in this style. Organizational transformation needs a fundamentally movement in their thinking to do new things instead of doing better things.
Systems building (Societal change). The most complex sort of sustainable innovation involves collaborating with others to create development for both human and environment situation. In fact, most companies in this section recognize their role in an eco-system and no enterprise can achieve sustainability on its own ability. Therefore, their popular slogan is "Do good through doing new things with people". Designers in these systems need to widen the reach of their ideas by connecting with partners or co-workers from previously unrelated industries as well as depreciated players.
5. Conclusion
In this paper, the author showed the existing concepts of sustainable innovation that are researched by some scholars in academic fields. As identified early in the study, with significant advantages, sustainable innovation always plays a significant role in both business innovations and the global modern economy with potential competitive advantage that creating effective innovation strategies for the firm. With an important tool as green innovation, enterprises have their own competitive advantages as they make the right investment decision in this context. In addition, the study also mentioned that it is important to have the right strategy for innovation process to reach sustainable development goals in the future.
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ĐỔI MỚI VÀ VAI TRÒ CỦA SỰ ĐỔI MỚI BỀN VỮNG
• NGUYỄN THỊ THU HUYỀN
Nghiên cứu sinh tại Trường Đại học Pécs, Hungary
TÓM TẮT:
Trong bối cảnh môi trường kinh doanh cạnh tranh gay gắt hiện nay, sự đổi mới đóng vai trò quan trọng trong việc giúp các nhà quản lý và nhân viên tìm ra các biện pháp để nâng cao hiệu quả, cũng như đạt được lợi thế kinh doanh. Các doanh nghiệp luôn cần phải cải tiến sản phẩm và dịch vụ để ngày càng đáp ứng tốt hơn các nhu cầu của khách hàng. Bên cạnh đó, yếu tố lợi nhuận cũng đóng vai trò quan trọng, quyết định sự tồn tại của doanh nghiệp trên thị trường. Tuy nhiên, thách thức lớn nhất hiện nay đối với nhiều doanh nghiệp chính là khả năng đáp ứng nhu cầu của khách hàng. Đây cũng là lý do tại sao việc đổi mới đóng một vai trò quan trọng trong sự thành công của bất kỳ công ty nào. Đầu tư vào đổi mới bền vững là một trong những giải pháp hiệu quả nhất mà các nhà lãnh đạo doanh nghiệp sử dụng để đạt được mục tiêu của mình. Nghiên cứu này nhằm làm rõ hơn tính bền vững và đổi mới, cũng như vai trò quan trọng của sự đổi mới bền vững.
Từ khoá: phát triển bền vững, đổi mới xanh, cạnh tranh, chính sách đổi mới.
[Tạp chí Công Thương - Các kết quả nghiên cứu khoa học và ứng dụng công nghệ, Số 8, tháng 4 năm 2023]
