Sustainable Development Drives SME Innovation

Sustainable Development Drives SME Innovation

NBS May 24, 2012
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.
Innovations resulting from economic initiatives
Innovations resulting from social initiatives
Innovations resulting from environmental initiatives

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. 
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

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