NEW RESEARCH | How companies succeed in sustainable innovation

Companies are investing a lot of resources in sustainable innovation. But what does it take to succeed? Recent research at the School of Business, Economics and Law, University of Gothenburg, has identified three key factors.

In his doctoral thesis, Hani Elzoumor has studied innovation ecosystems – networks of actors, institutions, activities and resources that shape how innovative Swedish and European companies develop innovations.

– I have focused on three factors: collaboration and openness – that is, how companies seek external knowledge and build relationships; eco-innovation – that is, the development of products, processes and services with a lower environmental impact; and business performance.

– It turns out that the three elements strongly influence each other. How companies collaborate and share knowledge affects how they innovate sustainably, and these innovations in turn affect both productivity and profitability, says Hani Elzoumor.

Being open to the outside world is thus often a prerequisite for successful sustainable innovation. But it is not only openness itself that matters.

– It also matters a lot which partners you choose and how much trust is built.

Not all eco-innovations are created equal

An important finding is that different types of eco-innovations have different impacts. Cleaner technologies that are integrated into a company’s core business have a greater positive impact than solutions that only address emissions at the end of the process.

– We need to distinguish between innovations that become part of production and those that are just a last resort to reduce waste. Cleaner technologies may be more expensive to introduce, but they strengthen the competitiveness of companies in the long run, says Hani Elzoumor.

Pressure drives cooperation

Another key finding is that ecosystem pressures – such as competition, technology shifts and regulation – often drive firms to collaborate more, rather than to close down.

– Businesses often complain about fierce competition and difficult regulations. But my research shows that these very pressures can drive them to become more open and collaborative, as this is the only way to meet the challenges.

He stresses that public support, both Swedish and European, is crucial for eco-innovations to become a reality. Grants can help companies bear the high initial costs.

Surprising results

The research also shows that companies can replace expensive intellectual property protection with trust and strong partnerships.

– We hypothesized that the more open companies become, the more they need to protect themselves. But it turned out to be the opposite. Strong and trusting partnerships reduce the need for patent protection. This is particularly important for SMEs, explains Hani Elzoumor.

He also found that absorbing external knowledge is not always enough to succeed. Firms also need to develop new organizational capabilities to translate eco-innovations into economic results.

Guidance for policy makers and businesses

The results are relevant for both policy makers and business leaders:

– For policymakers, it’s about creating clear rules, fostering cooperation and providing resources. And for businesses, I want to send the message that long-term, trusting partnerships and integrated cleaner technologies are key to combining sustainability with competitiveness.

– Cleaner production technologies may cost more initially, but they are strategic investments that strengthen the company in the long run, says Hani Elzoumor.

Contact hani.elzoumor@gu.se

More about the thesis
Hani Elzoumor will defend his thesis on September 5 at the School of Business, Economics and Law, University of Gothenburg.Title: Navigating Innovation Ecosystems – A Quantitative Inquiry into Openness, Environmental Innovations, and Economic Performance of Innovative Firms.