Sustainability-Oriented Innovation of SMEs: A Systematic Review

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Since the Brundtland report in 1987 a wide debate has emerged on eco-innovation (e.g. eco-design, cleaner production) and sustainability-oriented innovations (SOIs), that is, the integration of ecological and social aspects into products, processes, and organizational structures. While prior research has often dealt with SOIs in large firms, the last decade has begun to generate broad knowledge on the specificities of SOIs in small and medium sized enterprises (SMEs) as they are increasingly recognized as central contributors to sustainable development. However, this knowledge is scattered across different disciplines, research communities, and journals. Therefore, this paper analyzes the heterogeneous picture research has drawn within the past 20 years with a focus on the innovation practices including different types of SOIs and strategic sustainability behaviors of SMEs through an interdisciplinary, systematic review in a time frame between 1987 and 2010. By consulting major research databases we have analyzed 84 key journal articles bibliographically and thematically. We find that first SME strategic sustainability behavior ranges from resistant, reactive, anticipatory, and innovation-based to sustainability-rooted. Second, we identify innovation practices at the product, process, and organizational level. Third, our results show that research is still strong on eco-innovation rather than on innovation from a triple bottom line perspective (economic, social, and environmental dimension), that is, SOIs of SMEs. Our main theoretical contribution is the development of an integrated framework on SOIs of SMEs where we delineate how distinct strategic sustainability behaviors can explain contingencies in types of innovation practices. Furthermore, for the more proactive SME behaviors we argue that they possess higher capabilities for more radical SOIs with the innovation process itself changing. Therefore, we propose that interaction with external actors (e.g. customers, authorities, research institutes) can ultimately increase the innovative capacity of SMEs for SOIs. Finally, we identify major research gaps with regard to radical SOIs, streamlined innovation methods, the role of SMEs in industry transformation and in sustainable supply chains, as well as a need for a stronger theoretical debate on SOIs of SMEs.

Original languageEnglish
JournalJournal of Cleaner Production
Pages (from-to)57-75
Number of pages19
Publication statusPublished - 15.02.2014