Environmental Innovation and Employment: Drivers and Synergies

Abstract

Numerous empirical studies focus on the drivers of environmental innovation or their potential employment effects. Nevertheless, we have scarce knowledge about whether factors that influence eco-innovation and employment generation are related. The main purpose is to analyze the synergies between eco-innovation and employment using a sample of more than 6000 innovative Spanish manufacturing and service firms. Using different econometric procedures, the main findings show that size, R&D and export influence eco-innovation and employment in the same direction, while age, belonging to a group, public subsidies and internal and external knowledge sources exert a different effect. Thus, older firms create less employment but have a high probability of being environmental innovators compared with younger firms. Furthermore, the size of the company moderates the positive role of eco-innovation on employment growth, while young firms not belonging to a group (eco-entrepreneurs) contribute more to employment growth than old firms belonging to a parent firm. Implications for scholars, managers and policy makers in terms of sustainable and economic growth are made.

Firm Size and the Business Model for Sustainable Innovation

“…Large companies and SMEs have different perspectives on partners in their supply chains [32]. For SMEs, collaboration and coopetition are fundamental mechanisms in innovation towards sustainability [3, 6,17,33,36,[41][42][43][44][45]. Thanks to the increased decision-making power of the owners, small businesses are dynamic and respond quickly to changing environments.…”

“…The greater the enterprise, the greater the density of the employee network, and its favorable position in the industrial network gives it more bargaining power [41]. According to Triguero et al [44] SMEs prefer to associate with large firms, because they perceive them as more stable for doing business, and exchange or cooperation activities are more reciprocal [41]. Huergo [37] also acknowledges the advantages of large companies due to their diversity of options, along with vertical or horizontal integration, but does not consider this factor to be determinant in the success of innovations for sustainability.…”

“…Lewandowski et al [7] go further, and propose that the existing metrics are insufficient for a sustainable future, and it is necessary to complement these with percentages of the income obtained from, for instance, repair, reuse, and second hand use. Generally, large companies are the first to adopt these innovations to increase the perception that they are environmentally friendly [44].…”

Eco-Innovation Influencers: Unveiling the Role of Lean Management Principles Adoption

“…These authors emphasize that technological capacities, such as R&D and human capital, promote smaller innovations than other innovations, contributing to the confirmation of previous empirical evidence [55,[61][62][63] which highlights that financial restrictions limit green innovations to a greater extent than other innovations, as well as the development of suitable organisational capacities and the implementation of quality management systems aiming to promote ecological innovations to a greater extent than other innovations. Concerning R&D activities, the work by Trigueiro et al [64] analysing synergies between eco-innovation and employment using a sample of more than 6000 innovative Spanish manufacturing and service firms should be noted. The results confirmed their positive influence on eco-innovation.…”

“…Therefore, the extra-financial resources necessary for innovation are also reason enough to suppose that large companies are more likely to innovate ecologically than small ones, above all because large firms are more likely to take on risks than SMEs. Nevertheless, some studies do not support that positive influence of company size on innovation [50,69], although recently, the work by Trigueiro et al [64] has also contributed to the current debate, defending the influence of company size on eco-innovation.…”