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Research Insight

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Innovation is a key factor in a company’s long-term success, regardless of its size. However, until now, research about the relationship between innovation and sustainable development has focused on large companies.

Sandrine Berger-Douce (Université de Valenciennes) drew on an exploratory case study of an industrial small- medium-sized enterprise (SME) in northern France specializing in envelope manufacturing to demonstrate that sustainable development can be a  major catalyst for innovation in SMEs.

The case study shows that organizational features of SMEs tend to encourage innovation. These features include: a flexible firm structure; financial independence owing to the owner or manager’s presence; a specialization of activities; and the ability to react to new opportunities and rely on intuition to inform decisions.

Thus, SMEs actually have a competitive advantage over large enterprises when it comes to driving innovation.

The SME studied in this research was operating in a depressed market (a seven percent decrease in volume between 2006 to 2009) caused by the gradual decline of paper mailings (invoices, advertising, etc.). After analyzing their product’s life cycle, the company decided to implement a sustainable development strategy. They conducted economic, social and environmental initiatives that generated innovations in products, processes, organization and marketing.

“SMEs that seize the opportunity to implement a proactive sustainable development strategy benefit from the emergence of multiple innovations, which are sources of competitive advantages.”

Innovations resulting from economic initiatives

  • Reduced expenses as a result of gains in thermal isolation following roof renovations;
  • Productivity gains through modernization of the production tool
  • Ability to meet growing demand for eco-responsible and personalized products (e.g. eco-designed and recyclable envelopes)
  • Diversification of business through consulting activities in sustainable development

Innovations resulting from social initiatives

  • Improvement in working conditions by automating the recovery of paper waste and reducing the amount of dust employees were exposed to
  • Recognition from the community for the reduced noise pollution following roof renovations

Innovations resulting from environmental initiatives

  • Reduction of environmental impacts at the source (e.g. recovery of paper waste)
  • Use of sustainable materials such as eco-designed and recyclable envelopes
  • Protection of local biodiversity through the creation of a regional reforestation association

This study ultimately realized innovations in products, processes, organization and marketing thanks to an approach rooted in a sustainable development strategy.

Future research in innovation and sustainable development in SMEs could focus on the study of SME stakeholders as engines for innovation.

SME managers should seize the opportunities for innovation that sustainable development offers in order to anticipate and stay ahead of changes in the market in which they operate.

Source

Berger-Douce, S. 2011. “Le développement durable, un levier d’innovation pour les PME?” Revue française de gestion, Vol. 6, no. 215, p. 147-166.

Summarized by

Jean-Luc Dubé and the NBS team