Abstract
Today, companies' incremental innovations and reactive approaches remain insufficient to cope with shocks like the COVID-19 pandemic and the climate crisis. Thus, they need to start with a radical shift in their thinking to be responsible and sustainable at the minimum level. Furthermore, companies must build, transform, and adapt an innovation ecosystem with stakeholders who interact to create and diffuse innovation. The author suggests that ‘organizational transformation', which emphasizes creating more shared value within society, and ‘system building', which highlights the company that goes beyond the institutional borders and redefines the purpose of the company's mission in society, are essential innovation strategies in overcoming the shocks generated by the COVID-19 pandemic and climate crisis. This chapter aims to clarify the meaning of the innovation terms related to sustainability and provide responsible and sustainable business practices from traditional resources and gray literature based on organizational transformation and system building approaches.
TopIntroduction
The profound impacts of the COVID-19 pandemic, such as curfews and lockdowns that resulted in economic activity almost entirely stopping all around the world, caused irreversible effects on the lives of millions of people. As a current example of a COVID-19 pandemic shock, the ‘chip crisis’ has generated drastic disruption in the production of different industries, from wearable health technologies to electronic systems in automobiles and smartphones (Baraniuk, 2021). Civil aviation, which the COVID-19 pandemic has severely impacted, has suffered significant financial losses on a global level. The number of seats offered by airlines decreased 50% in 2020, yet 3 million people chose not to fly with any airline company throughout the pandemic. Thus, the total loss for the civil aviation industry was about 371 billion USD in 2020 (ICAO, 2021). The most recent COVID-19 pandemic shock case is from the United Kingdom. While the business owners who carry goods in trucks offer higher wages at the beginning of employment with other financial incentives like bonuses, there has not been enough recruitment in the sector during the post-pandemic era (Milliken, 2021). Thus, people have sometimes found empty shelves in malls or other places, like pharmacies, that didn't have any pills.
However, despite the powerful COVID-19 pandemic shocks, the threat of even greater shocks looms for the global economy and many industries because of climate change. As a result of the global scale of greenhouse gas emissions, it has turned out to be a common situation to hear about extreme weather events such as flash floods and wildfires from different parts of the world. One last instance is the unprecedented rainfall that caused rivers to burst their banks, with catastrophic impacts on a broad area of Europe, including Germany, Belgium, the Netherlands, Luxembourg, and Switzerland (BBC, 2021). Moreover, most business models that adopt traditional innovation approaches still continue to use limited resources in an unsustainable way to make profits and cause climate change with harmful effects to the environment and society, such as carbon emissions and child labor (Kelleci, 2021).
Key Terms in this Chapter
Quadruple Helix Model: The model expands on the triple helix model by incorporating a fourth component, citizens, which includes community and the media, into the context of interactions between the other three components.
European Green Deal: It is a scheme for turning climate crises and environmental threats into opportunities by covering all stakeholders in order to make the EU's economy truly sustainable.
Triple Helix Model of Innovation: It describes a series of connections between academics, business, and government that drive economic and social progress.
Open Innovation: It entails integrating problem-solving capabilities and information as well as seeking solutions and recommendations from individuals outside the company.
Circular Economy Action Plan (CEAP): A radical transition triggered by the European Green Deal is based on co-creation with miscellaneous actors such as universities, non-governmental organizations, consumers, and communities in a circular manner.
Eco-Innovation: The concept refers to making substantial and measurable progress toward the objective of sustainable development by minimizing environmental effects and increasing environmental resilience.
Responsible Research and Innovation: RRI is a continuous method of connecting innovation and research to ethical and social issues.
Green Innovation: The notion refers to the development of goods, services, or processes that limit environmental damage, impact, and degradation while also minimizing the use of natural resources.