Sustainable development innovation and competitive advantage: implications for business, policy and management education

This paper discusses some of the trends and emerging issues in corporate sustainable development innovation (SDI). In the last few years sustainable development pressures have been recognized as a serious challenge and major strategic issue by managers. Although pressures vary across industrial and national contexts, they are increasingly changing the rules of competition, making extant competencies obsolete, creating winners, losers and opportunities for niche players. Drawing from cases in the agricultural biotechnology and oil and gas industries, we argue that firms are often ill-prepared to deal with the complex and often ambiguous nature of sustainable development, especially the social dimension. Traditional risk management techniques and innovation strategies are insufficient to deal with these added difficulties. We further argue that business school training that typically promotes simple answers through complicated formulas reinforces these deficiencies. Effective sustainable development innovation involves embedded organizational capabilities and the ability to recognize and respond to often context-specific, conflicting and sometimes ambiguous pressures. Yet it is precisely because SDI is hard — and important — that such capabilities can be the grounds for competitive advantage. We conclude with implications for managers, policy makers, future research and teaching.