Sustainable development orientation (SDO) practice and its impact on innovation performance

Abstract

Changes in regulation and government policy have stimulated growth of ‘green innovation’ with sustainability emerging as a key concept. A review of the literature revealed gaps in research in this area of innovation management. The aim of this paper is to test the relationship between SDO practice and innovation performance of a large number of Australian companies in the manufacturing, services, construction and software sectors. Our study showed that proactive management of environmental protection issues and marketing of ‘green’ products were found to have a positive and significant association with ecological efficiency of products. On the other hand, the design of new products for energy efficiency was found to have a positive and significant relationship with the number of innovation adoptions. Our findings are consistent with the literature, which reveals a significant and positive relationship between SDO and innovation performance. The implications of the research are that SDO should not be considered an additional cost of doing business rather, managers should view SDO as an opportunity to improve innovation performance.