On Green Innovation Inertia

Doctoral thesis, 2006

A growing number of nations, firms and individuals realize that the current ways in which products are produced, consumed and disposed of is unsustainable. Yet most actors seem to await options that deliver the needed eco-environmental improvement without requiring any individual sacrifices. It is a classic example of the tragedy of the commons, where individuals’ self-interest brings ruin to everyone. It seems that most firms have learnt to become efficient in innovating and commercialising as they currently do during a time when society did not know of the problems thereby created. Now that knowledge about the negative externalities emerges, firm-internal inertia to change has developed. The interdependent web of consumers and supporting infrastructure of products and services in which these firms operate seemingly do not encourage them to change, but rather add contextual inertia to the firm-internal inertia. In this gloomy situation lies, however, also a substantial business opportunity for firms that can create innovations which do not ask for any individual sacrifices in order to reduce, or perhaps even stop, the eco-environmental degradation. This thesis deals with the prerequisites for successful green innovations in the automotive industry by using an insider research approach, enabling an understanding of what factors constitute the firm-internal inertia to green innovations and a quest for clues about how to change these factors so that a more eco-benign path can be entered successfully, given the contextual conditions of reluctance and hesitance. The issue of successful green innovations is a matter both of developing more eco-benign technology and of being commercially innovative with this technology, to provide sufficient utility- and identity-enhancing attributes to the customer in ways that bring profit to the firm. To achieve this requires the firm to view the market differently and to innovate differently. Firms’ absorptive capacity, aspiration to exploit new technology, and manner of validating knowledge claims are therefore important organizational factors that impact its inertia to green innovations. It is a substantial challenge for senior management to decide on the alternative green innovation path, and a recommendation is given to seek help by teaming up with external experts and their networks.