Drivers of environmental innovation - Vinnova

technologies and products. It may also be that the environmental demands are
translated into and fused with functional or other demands, so that the
responding party may not be aware of the environmental dimensions in the
total of demands experienced. Noci and Verganti confirm this. They claim that
in most cases an SME will not explicitly classify its innovations as
environmental, because these drivers are not explicit. Environmental drivers
are instead merged and hidden in the requirements of the immediate
downstream customer. The more a firm is positioned in the early stages of the
value chain, the higher the number of drivers indirectly experienced and the
less explicit the environmental origin of the customer specifications. The
difficulties for SMEs to correctly recognise environmental threats and
opportunities are a consequence of the implicitness of environmental
innovations drivers.
Therefore, any analysis of the environmental drivers of SMEs must focus on the
entire value chain. Consequently, although a firm’s immediate customer seems
to have a low concern for environmental issues, this does not entail that the
environment is not a strategic issue. In fact, changes in distribution, disposal
and consumption regulations will probably change the requirements of both
dealers and customers, whatever the market segment (Noci and Verganti, 1999).
Whether a firm is part of a larger concern or not can also influence its
environmental activities. Heidenmark found a strong correlation between being
part of a larger concern and advancement of environmental activities
(Heidenmark, 1999).
The interaction between firms will cause other firms to innovate in response to
environmental demands other than those they experience themselves. In the
case of policy regulation, firms outside the targeted industry may well innovate
more than the regulated firms do. Kemp refers to Heaton, 1990, who states that
in general outsiders are more likely to develop radical solutions to
environmental problems. The reason presented is that they may have the
technological capabilities that the regulated industry lacks. They may also have
a stronger interest in developing compliance technology, as it will mean
increased sales, as compared to the investment costs of the regulated industry
(Kemp, Forthcoming).
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