Page 114 - Hojnik, Jana. 2017. In Persuit of Eco-innovation. Drivers and Consequences of Eco-innovation at Firm Level. Koper: University of Primorska Press
P. 114
In Pursuit of Eco-innovation
Customer demand and eco-innovation
Environmentalism as a consumer attitude is spreading and growing in
importance worldwide. As a result, consumers are willing to choose en-
vironmentally friendly products and are prepared to pay higher prices for
them (Chen 2013). By gaining environmental awareness and expressing
concerns related to environmental impacts, which affect their purchas-
ing choices, they exert more pressure on companies to reduce their ad-
verse impacts on the environment (Kemp and Foxon 2007). Consumers’
“green” demands challenge companies to provide proper design, produc-
tion, sales and recycling of products (Sarkar 2013). In addition, companies
have realized that the market demand for environmentally friendly prod-
ucts is growing and can become profitable as a segment (Nidumolu et al.
2009). Consumer demand seems to be a strong driver of eco-innovation,
114 especially when operating in product markets, which are close to final
customers, where the pressure to eco-innovate is the strongest (Zeng et
al. 2011; Doran and Ryan 2012). This in in line with other research works
that found customer demand to be the most effective driver of eco-prod-
uct innovation (Kammerer 2009; Horbach et al. 2012; Lin et al. 2013a)
and eco-process innovations that increase material efficiency, reduce en-
ergy consumption, waste and the use of dangerous substances (Horbach
et al. 2012). Furthermore, Van Hemel and Cramer (2002) found that cus-
tomer demand is to be the most influential driver of eco-design inno-
vations and has a significant influence on green innovation adoption in
SMEs (Weng and Lin 2011). Thus, consumer demand for environmen-
tally friendly products and processes encourages firms’ decision to in-
vest in and implement eco-innovation (they apply some or a minimum
level of eco-innovation activities to respond to the market pressure, but
they do not necessarily invest large amounts of resources into eco-inno-
vation) (Kesidou and Demirel 2012). In conclusion, customer demand
plays a critical role in today’s business environment, because consumers
demand that products are produced in an environmentally friendly way
(Chiou et al. 2011). Moreover, customer demands and preferences have
the potential to affect the direction and rate of eco-innovation (Horbach
2008). Based on the findings of previous research works (Rennings 2000;
Van Hemel and Cramer 2002; Le et al. 2006; Kammerer 2009; Lee 2009;
Lewis and Cassells 2010; Popp et al. 2011; Weng and Lin 2011; Zeng et al.
2011; Doran and Ryan 2012; Horbach et al. 2012; Kesidou and Demirel
2012; Lai and Wong 2012; Murovec et al. 2012; Lin et al. 2013a), we can
conclude that one of the essential drivers of eco-innovations is customer
demand. Therefore, we expect that:
Customer demand and eco-innovation
Environmentalism as a consumer attitude is spreading and growing in
importance worldwide. As a result, consumers are willing to choose en-
vironmentally friendly products and are prepared to pay higher prices for
them (Chen 2013). By gaining environmental awareness and expressing
concerns related to environmental impacts, which affect their purchas-
ing choices, they exert more pressure on companies to reduce their ad-
verse impacts on the environment (Kemp and Foxon 2007). Consumers’
“green” demands challenge companies to provide proper design, produc-
tion, sales and recycling of products (Sarkar 2013). In addition, companies
have realized that the market demand for environmentally friendly prod-
ucts is growing and can become profitable as a segment (Nidumolu et al.
2009). Consumer demand seems to be a strong driver of eco-innovation,
114 especially when operating in product markets, which are close to final
customers, where the pressure to eco-innovate is the strongest (Zeng et
al. 2011; Doran and Ryan 2012). This in in line with other research works
that found customer demand to be the most effective driver of eco-prod-
uct innovation (Kammerer 2009; Horbach et al. 2012; Lin et al. 2013a)
and eco-process innovations that increase material efficiency, reduce en-
ergy consumption, waste and the use of dangerous substances (Horbach
et al. 2012). Furthermore, Van Hemel and Cramer (2002) found that cus-
tomer demand is to be the most influential driver of eco-design inno-
vations and has a significant influence on green innovation adoption in
SMEs (Weng and Lin 2011). Thus, consumer demand for environmen-
tally friendly products and processes encourages firms’ decision to in-
vest in and implement eco-innovation (they apply some or a minimum
level of eco-innovation activities to respond to the market pressure, but
they do not necessarily invest large amounts of resources into eco-inno-
vation) (Kesidou and Demirel 2012). In conclusion, customer demand
plays a critical role in today’s business environment, because consumers
demand that products are produced in an environmentally friendly way
(Chiou et al. 2011). Moreover, customer demands and preferences have
the potential to affect the direction and rate of eco-innovation (Horbach
2008). Based on the findings of previous research works (Rennings 2000;
Van Hemel and Cramer 2002; Le et al. 2006; Kammerer 2009; Lee 2009;
Lewis and Cassells 2010; Popp et al. 2011; Weng and Lin 2011; Zeng et al.
2011; Doran and Ryan 2012; Horbach et al. 2012; Kesidou and Demirel
2012; Lai and Wong 2012; Murovec et al. 2012; Lin et al. 2013a), we can
conclude that one of the essential drivers of eco-innovations is customer
demand. Therefore, we expect that:
