Drivers and Barriers in the Diffusion of Eco-innovations

Abstract

Sustainable development has become an important concept in the last decades. Sustainable development tries to reconcile the relationship between economic growth and environmental damage. In the last decades, ecological problems became more severe. Decoupling economic growth and environmental harm seems to be crucial in order to avert a lot of environmental damage. One major role to tackle this conflict is reserved for environmental innovation. Environmental innovations or eco-innovations are new products and processes that reduce the environmental impact. Eco-innovations can bring sustainable benefits, but only when widely used or implemented. Thus, eco-innovations have to diffuse across society. This paper aims to increase the understanding of the most important factors that slow down or accelerate the diffusion of eco-innovations. It will thus answer the question: which factors slow down and which factors accelerate the diffusion of eco- innovations?

To answer this question, a systematic literature review has been carried out. 39 articles about the diffusion and adoption of eco-innovations among firms have been analysed. In the analyses, various factors that influence the diffusion came up. Based on recurring patterns in the articles, five categories were identified in which the factors were placed. These categories form the new classification this paper proposes. The five categories are cost relating factors, benefit relating factors, regulatory factors, informational factors and dummy factors. The factors in the last category are often used as control variables in the literature. The most reported factors (15 times or more) are resources, investment costs, type of regulation (cost relating factors), market demand for sustainable products/services, profitability (benefit relating factors), availability of regulations, type of regulation (regulatory factors), resources, information flows, attitude of managers/owners, organizational environmental practices (informational factors) and size (dummy factors). The new classification is more logical and useful in the current literature. A limitation is that comparison of factors in different articles can be difficult, because of all the differences in eco-innovation types, industries and adopters. Another limitation is that developing countries are neglected in literature. Future policies should take the importance of the five categories and corresponding factors into account.