Five Drivers of Eco-Innovation: Insights from Parsimonious Model Using a Content Analysis Approach

1. Introduction

Aware living in world with finite resources, cleaner production has promoted green technology as tools for resource efficiency. Green technology is the solution that will provide a balance in terms of the environment, economics and society (New Straits Times, 2013). The green innovation movement should consider the green activities in supply chain. The success of eco-innovations in sustainable supply chains aiming a low-carbon economy is related to a broad range of human critical success factors. Development of low-carbon innovations in products can be supported by a carbon footprint assessment mapping CO² emissions during all of the steps of the product development process (Jabbour et al., 2015). Practitioner and academia are discovering the substitute for green energy sources and production (Kamarudin Bakar et al., 2011). Eco-innovation is not only focusing of production process to reduce the pollution load on the environment but it also makes good business sense as prevention technique. In recent decades, the expansion of economic activity is a contributing factor to the global environmental problems such as global warming and resource scarcity. However, as businesses are responsible for the environmental concerns (OECD, 2009) companies are seen shifting from traditional practices to greener practices (Laperche and Uzunidis, 2012; Ekins, 2010; Tyl, Millet and Vallet, 2010). The expectation is that the management of a firm should help shoulder the burden by practicing eco-innovation, which will benefit the entire ecosystem with an increased quality of life (Fernando et al., 2016). Firms can meet sustainable business performance in the aspect of economic, social and environment through eco-innovation (Olson et al., 2011; Pujari, 2006). In today’s business practices, it is vital to know how firms can create and add value (environmental and monetary) to their products and services through innovation (EC, 2010). It is also critical to create and increase the awareness of eco-innovation among the business world. For that reason, this study is adopting the simplest assumption in the formulation of a concept to identify the relative important dimensions and a parsimonious model of eco-innovation. The importance of a parsimony lies in refinement of the model so that it is precise and eliminate redundancies (Ma et al., 2008).