Arthur D. Little (2004) defined ‘sustainability-driven’ innovation as ‘the creation of new market space, products and services or processes driven by social, environmental or sustainability issues.’
As with general innovation, there is an emerging recognition that sustainable innovation is not just about new concepts but is about commercialization of technologies, products and services and about entrepreneurship. Innovation can also be about the adoption of new processes and systems at societal level.
Sustainable innovation is a process where sustainability considerations (environmental, social, financial) are integrated into company systems from idea generation through to research and development (R&D) and commercialization. This applies to products, services and technologies, as well as new business and organization models.
Sustainable innovation has been defined as covering the spectrum of levels of innovation from incremental to radical. Whilst there are no absolute or quantifiable definitions and boundaries, four main levels of innovation can be defined in the context of environmental improvement:
- Level 1 (incremental): Incremental or small, progressive improvements to existing products
- Level 2 (re-design or ‘green limits’): Major re-design of existing products (but limited the level of improvement that is technically feasible).
- Level 3 (functional or ‘product alternatives’): New product or service concepts to satisfy the same functional need e.g. teleconferencing as an alternative to travel
- Level 4 (systems): Design for a sustainable society
The primary focus of Katerva is on higher levels of innovation which may contribute to significant or ‘Factor X’ reductions in environmental impacts.