**6. Sustaining innovation**

Traditionally, it has been assumed that the primary purpose of a firm is to make a profit and to increase its value in the long run. Recently, it has become widely recognized that firms will take their responsibility not only toward their shareholders but

#### *Perspective Chapter: Sustainability and Corporate Innovation DOI: http://dx.doi.org/10.5772/intechopen.108457*

also toward other stakeholders. The World Bank Council for Sustainable Development defines sustainability as "the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." Sustainability also focuses on the survival and well-being of all related stakeholders. Therefore, sustainable firms should consider environmental, social, and governance issues and integrate them into their operations and processes.

Innovation is "any practices that are new to organizations, including equipment, products, services, processes, policies and projects" [67]. Khazanchi et al. [68] suggest that innovation is one of major relevance for companies, as it can be the source of additional revenues from new products or services, which can help to save company costs or improve the quality of existing processes. Therefore, the management team needs to have innovativeness as a positive attitude toward changes of introducing new products to the market, or opening up new markets, through combining strategic orientation with innovative behavior and process. Hult et al. [69] suggest that innovativeness seemed to be useful in helping firms to compete with their competitors with those new products. Thus, innovativeness is a key attitude in any management teams to be innovative, thus coming out with new ideas for the competitive advantage and durability of their firms. Due to substantially changes in world environment as well as technology disruption, the production and consumption patterns have been rapidly changed over the past decades. In order to survive and not be disrupted, many companies believe they would urgently need to transform their organizations. In addition, this major change is also leading to transformations in society and in the environment, and creating demands and constraints for companies, so that competitiveness is increasingly related to the adoption of innovation management that includes sustainability.

Therefore, those management teams must realize the importance of adopting sustainable innovation practices to minimize negative social and environmental impacts resulting from their activities and, consequently, to achieve higher corporate performance. Therefore, sustainable innovation is simply the creation of something new that improves firm performance and its valuation in the three dimensions of sustainable development: social, environmental, and economic. Such improvements are not limited to technological changes and may relate to changes in processes, operational practices, business models, thinking, and business systems [70]. The adoption of sustainable innovation practices can affect business performance. Many studies show some evidence to link the results of investments in sustainable innovation to business performance (For example, [71, 72]). Hansen et al. [73] observe that sustainable innovation is a device that covers both sustainability issues and the inclusion of new customer and market segments, thus adding a positive value to the firm's global capital. In addition, Aguilera-Caracuel et al. [74] suggest sustainable innovation can contribute to business sustainability, since it has a potential positive effect on a company's financial, social, and environmental performance. Nidumolu et al. [75] document that success is related to the fact that sustainability is perceived as a new innovation frontier for large organizations. Successful large companies reconcile sustainability with innovation and achieve their competitive advantage, because they redefine products, technologies, processes, and business models, and still reduce costs, by using less inputs; and new processes and products also generate additional revenues or allow the creation of new businesses. Klewitz and Hansen [76] document that small and medium-sized enterprises are increasingly recognized as fundamental for sustainable development. Zee et al. [77] and Robinson and Stubberud

[78] observe that large companies are more inclined to produce green products and services while small businesses tend to have higher levels of environmental awareness and a greater belief in the importance of sustainability.
