Drivers of environmental innovation - Vinnova

Summary
This study aims to provide an overview of the existing literature on how
external demands drive environmental innovations within firms. This is done
with a view to contribute to the knowledge of Swedish policy makers.
Innovations hold a large potential to contribute to the greening of society. Firmexternal
demands for sustainable development is a driving force of innovation
within firms, and public policy may contribute to strengthing firm growth and
capability to innovate based on this driving force.
Environmental innovation can be defined as ”innovation that serves to prevent
or reduce anthropogenic burdens on the environment, clean up damage already
caused or diagnose and monitor environmental problems”. Environmental
innovations involve many areas of knowledge and many industrial sectors and
may therefore be systemic and complex.
Chapter 2 describes more specifically the nature of environmental innovations,
and includes the specific challenges imposed on firms engaged in
environmental innovation efforts. The historical development of environmental
work is presented, with the shift from end-of-pipe solutions to more integrated
solutions to environmental problems being outlined. The shift is due partly to
more comprehensive and stricter legislation, as well as to the increased
attention being paid to more diffuse environmental problems.
It appears that a broader range of competences is needed for environmental
innovations than for other types of innovations, and that they require more
organisational changes. Customers and suppliers are sources of information
used in environmental innovation processes, but the public knowledge
infrastructure, for example universities and technical colleges, may also be
important.
In chapter 3 the focus is on the different external factors that drive
environmental innovation activities in firms. The most important drivers are
regulations and market related drivers, such as competition and the hope of
increased market shares.A shift is taking place away from regulation as the
main driving force as market drivers become increasingly important.
Government demands, however, remain a very important driver of
environmental innovation.
Business to business interaction can act to diffuse environmental demands from
consumers good firms and large firms to other firms. This can potentially be a
powerful driver of environmental work, especially in small firms. The
combined action of regulation and social concern within the entire value chain,
from raw material suppliers to intermediate manufacturers, final producers,
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