Value creation for sustainability-oriented innovations: challenges and supporting methods

Abstract

Sustainability has become a primary, global-level development target, as the need to balance economic prosperity, looking after the planet and the environment, and social equality have become more evident. To respond to their stakeholders’ sustainability demands, firms are increasingly seeking sustainability-oriented innovations that may simultaneously provide environmental and social benefits, new business opportunities and economic gains. Value creation for sustainability-oriented innovations is not easy, however, as the high levels of uncertainty and complexity in the business environment require repositioning of innovative activities, focusing on system-level impacts and balancing value creation between multiple network actors.

This study focuses on the challenges of value creation for sustainability-oriented innovations and introduces supporting methods to cope with the challenges. The study comprises multiple case studies including semi-structured interviews of informants from 29 different organizations, focus groups with 33 business experts, and content analysis of learning diaries of 17 managers with expertise in innovation management.

The study identifies challenges in value creation for sustainability-oriented innovations related to increased complexity, system-level value creation, tensions in business networks and utilization of sustainable knowledge. It also recognizes the characteristics of sustainable value creation in the novel market settings of sharing economy and platform-based economy and emphasizes the challenges of the lacking skill and capability levels of current decision-makers. The study introduces intermediate (research-based) tools and two supporting methods to cope with these challenges. Furthermore, the findings identify the importance of linking the building of different levels of dynamic capabilities to the development of sustainability-oriented innovations for system-level value creation. Based on these, the study presents also steps of a process for researchers to follow when aiming at creating research-based managerial methods to facilitate value creation for sustainability-oriented innovations. The findings guide managers to invest in collaboration and the development of specific skills and capabilities to help in coping with value creation for sustainability-oriented innovations.