Sustainable innovation – basic principles

Friday, November 7 2008 10:28 pm / Antti Hautamäki

The prevailing concept of innovation refers to introducing something new and useful, whether it is a new product, service, process, operating or business model. Sustainable innovation adds to this notion aspects of sustainable development.

I define sustainable innovation as such that it is based on ethically, socially, economically and environmentally sustainable principles. Of course, all these principles are hard to achieve simultaneously. Take as an example a hybrid car: It uses petrol and electricity produced by the car in transit. Its consumption is about 4–5 litres per 100 kilometers. That’s fine, but it still uses petrol and produces carbon oxides. On the other hand, ethanol based petrol is better for the environment, but it’s produced mainly from corn. The demand for corn has, consequently, raised its price and that has a negative effect on the nutrition of the poorest people.

In business, the motivation for innovation has been to create superior competitiveness in the market place. There have been two strategies: To cut costs or to create better products as compared to one’s competitors. Sustainable innovation offers a third strategy: to create products or processes with desirable features like durability and material or energy efficiency. It seems that consumers and customers are demanding these kinds of qualities more and more and they are even willing to pay more for “sustainable products”. At least we could forecast the growing demand and market for sustainable innovation. For example, the market for environmental technology like solar or wind energy technology is increasing exponentially today.

Innovation is also changing radically in realms other than sustainable development. I have summarized these other aspects to four tendencies or principles. They are inclusive, continuous and global innovation and innovative leadership. They are all related and also connected to sustainable development.

Inclusive innovation means innovating with customers, users and personnel. The user and customer orientation is becoming a must for enterprises in the global economy. The crucial matter for all organizations is the value of their products and services to their customers. It’s better to develop products with customers than to hope that there might be a demand for a new product developed by the R&D department.

One aspect of inclusive innovation is the inclusion of “outsiders” at the innovation process stage. I am referring to the role played by citizens and other organizations in innovation. The open innovation paradigm developed by Henry Chesbrough is an example of this trend. At its core is the buying and selling of ideas and innovation, instead of doing everything within company confines, in-house (see Chesbrough 2003).

Another aspect of inclusive innovation is public innovation, by which I mean innovation based on voluntary peer production of public goods (see Benkler 2006 and Weber 2004). In this model, the innovation process is conducted in open networks, outside of market relations. The product is for the public or common good and is freely distributed. Contributions are based on voluntary participation and it is not regulated by a hierarchical structure. Public innovation is a network form of organisation. Of course, a coordinator is needed. This kind of network is implanted on the web, providing an example of social media. Steven Weber calls this kind of structure of innovation an end-to-end architecture.

Inclusive innovation leads to the more general principle of innovation democracy. Eric von Hippel talks about democratising innovation, meaning that citizens could participate in innovation by using the Internet (von Hippel 2005). In a deeper sense, innovation democracy is a new form of democracy, where citizens have the right and the opportunity to be creative and to contribute to improvements in services, products and the structure of public organizations like municipalities, schools and hospitals.

As Benkler and von Hippel emphasise, the emergence of innovation democracy has its roots in the education of the people, in the decreasing prices of personal computers and in the effectiveness and accessibility of the web. The authors of the book Wikinomics even state that web-based “mass collaboration” will change the economy, business and the government (Tapscott and Williams 2007).

Other aspects of sustainable innovation mentioned earlier are also worth elaborating on here. Innovation processes are increasingly distributed across the globe. Innovation is conducted in global networks with partners situated practically everywhere. A new knowledge is emerging in collaborations between people and organisations situated in different locations. It’s important to understand that the location always provides a particular knowledge available only to the people living there. That special knowledge is emerging from the surrounding innovation ecosystem and creating unique historic and geographical conditions (see Hautamäki 2006).

Continuous innovation and innovative leadership are closely related. Continuous innovation is an ability to keep the renewing process going. It means also an ability to breach mental barriers, organizational silos and geographical borders. The notion of innovation culture nicely expresses the essence of continuous innovation. Innovation is not only a sudden realization or the big idea, it is above all an attitude incorporating curiosity, risk-taking and questioning. Also creativity describes the capable character of continuous innovation: creativity is not an episode, it’s the constant property of people and organisations.



Benkler Yochai (2006): The Wealth of Networks, How Social Production Transforms Markets and Freedom. New Haven and London: Yale University Press.

Chesbrough Henry (2003): Open Innovation, The new Imperative for Creating and Profiting from Technology. Boston, Mass.: Harvard Business School Press.

Hautamäki Antti (2006): Innovation ecosystem in city policy: the case of Helsinki. Helsinki Quarterly 4/06, 17-21.

Tapscott Don and Williams Anthony D. (2007): Wikinomics, How Mass Collaboration Changes Everything. Portfolio.

Von Hippel Eric (2005): Democratizing Innovation. Cambridge, Mass.: The MIT Press.

Weber Steven (2004): The Success of Open Source. Boston: Harvard University Press.

See the whole article: Helsinki Quarterly 2/2008