Social, environmental, and economic dimensions of innovation capabilities: Theorizing from sustainable business

Abstract

Although innovation capabilities are essential to increase companies' success and innovative performance, they are still underexplored regarding sustainability. This paper aims to analyze how Technology Development, Operations, Management, and Transaction innovation capabilities are interrelated with sustainable companies' social, environmental, and economic sustainability. We performed a multi‐case study comprising sustainable small enterprises from four industries: sustainable fashion, sustainable hosting, shared furniture, and renewable energy. From the results, we propose that each innovation capability has three dimensions: social, environmental, and economic. Each dimension has a set of components that can differ across capabilities. We then develop a conceptual scheme, a new theoretical lens that intertwines the literature on innovation capabilities and sustainability. We propose the concepts of Sustainable Technology Development Capability, Sustainable Operations Capability, Sustainable Management Capability, and Sustainable Transaction Capability. Our findings can assist sustainable businesses to improve, and traditional companies to build, sustainable innovation capabilities.

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