Eco-Innovation in Industrial Firms: Manager's Brief
Publication Year: 2009
Over the past two decades, a major change took place in Israel’s industry – it significantly reduced its industrial pollution and decreased the gap between Israel and most Western countries in this field. This reduction required the firms to expend major funds on environmental technologies, most of which exacted a heavy economic cost while making no contribution to the production process. However, solutions exist which improve the environmental efficiency of firms and enable them to consume fewer resources and reduce their environmental pollution, while cutting down on expenses. Innovative solutions such as these are defined as “eco-innovation” and are the subject of this research.
In order to study eco-innovation in industry, 249 firms were investigated – those with the highest probability for implementing environmental actions. Their representatives were interviewed and questioned about the eco-innovation projects that they conducted in the 16 year period spanning between 1989 and 2004. The study showed that the investigated firms carried out 369 environmental projects, 245 of which were defined as “technological eco-innovation projects” and 124 of which were defined as “conventional environmental projects”. The number of eco-innovation projects was found to increase over the years.
The most common projects which were conducted by the firms were at the innovation level of “new to the country” (47% of the projects), which is characteristic of industry whose main objective is to minimize the gap between Israel and the world. In 16% of the projects the eco-innovation level was characterized as “new to the world,” and in 37% of the projects, the eco-innovation level was defined as “new to the firm.”
The research proposes the following recommendations: improved coordination between the government ministries involved in eco-innovation, change in the mix of environmental regulation, granting direct government support to eco-innovation projects in industrial firms, and harnessing existing government programs to support knowledge and improve technological capacities to implement eco-innovation and incorporate environmental considerations in the decision making process of these programs.
Other recommendations include: establishing a center for the validation of environmental technologies and for assistance to companies specializing in the development and supply of environmental solutions, granting incentives and direct assistance to companies which offer environmental solutions to industrial firms, promoting business solutions for the transfer of environmental responsibility from industrial firms to the suppliers of environmental technologies, and concentration of environmental authorities on the planning stages of new firms and production lines.