Firms that are more sustainable benefit in an expected way. They tend to be more innovative and introduce more successful new products. The underlying mechanism is the increased customer focus — sustainability-oriented firms have a better understanding of current and future customer needs and, consequently, are able to generate new products that perform well in the market.
This finding is the result of research conducted by Paul College associate professor of marketing Shuili Du and her colleagues. They also found that a firm’s engagement in social media-based open innovation activities enhances its customer focus and new product development performance.
“While prior research tends to consider sustainability as a public relation tactics, this research provides quantitative evidence, based on an international sample, that sustainability could feed into a firm’s core competence and enhance its product innovation and long-term competitive advantage,” Du said. “It shows that firms should turn to environmental and social sustainability for inspirations of new product innovation.”
According to Du, these findings contribute to the innovation literature by showing that sustainability is a novel driver of new product innovation. In terms of managerial implications, it suggests that managers should mindfully embed sustainability in the firm’s new product innovation endeavors, and should systematically monitor and assess the impact of sustainability orientation on customer focus and new product innovation.
“I am currently examining the drivers of sustainability-focused innovation, given the increase in products that have an environmental or social element,” Du said. “This new project could shed light on the routes firms could pursue to embed sustainability in their new product development programs.”