Developing eco-innovations: a three-stage typology of supply networks

Abstract

a b s t r a c tThis paper uses grounded theory to develop and deepen our understanding of eco-innovation. It presents, through a series of four propositions, a three-stage supply network typology to help scholars and managers consider how best to develop these innovations. This typology was constructed by reviewing existing sustainability frameworks that argued that innovation was a key factor in sustainability. Moreover we found little consideration given on how to discover and develop eco-innovations. The literature proposes that a firm with strong ties with a few strategic suppliers will benefit from the knowledge and technology that spills over from suppliers to the firm during the new product development process. In contrast, the network literature explains that the creation of multiple weak ties to non-strategic suppliers may increase opportunities for identifying innovation. The network literature further suggests a third and potentially more promising route: building weak ties to suppliers that bridge 'structural holes' in the network. We suggest that strong ties with strategic suppliers will lead to the development of incremental eco-innovations while weak ties with multiple suppliers and with suppliers that bridge structural holes will tend to lead to radical eco-innovations. Finally, we suggest that once ecoinnovations are developed they should be embedded in the operational processes of other suppliers to increase the sustainability performance of the focal firm.

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