|Muhammad Fakhrul Yusuf||Faculty of Industrial Management, Universiti Malaysia Pahang, Lebuhraya Tun Razak, 26300 Gambang Kuantan, Pahang Darul Makmur, Malaysia - School of Technology Management & Logistic, Universiti Utara M|
|Hasbullah Ashari||School of Technology Management & Logistic, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah Darul Aman, Malaysia|
|Mohd Rizal Razalli||School of Technology Management & Logistic, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah Darul Aman, Malaysia|
Globally, global warming, resource depletion, and increased solid waste volumes have become major concerns for international governments. This paper aims to address Malaysia’s competitiveness in the context of global environmental change by analyzing firms that have incorporated environmental technological innovation (ET innovation) in their operations. This paper illustrates the connections between ET innovation and sustainable development and discusses the implementation of ET innovation at a firm level. The firms selected for this study focused on the whole spectrum of ET innovation when implementing their environmental technologies. These firms also targeted international markets with their eco-products and green technologies. However, we established that they need to become more market-oriented during the development of their products and technologies so that they address market needs. The involvement of firms in ET innovation requires significant investment in R&D and the proper management of resources to be successful.
Concept relationship diagram; Environmental innovation; Malaysia; Review, Sustainable development
The concept of sustainable development was first proposed as early as the 1980s. It was initially defined as taking into account the effects of social, economic, and ecological factors, in addition to the living and non-living resource base, with consideration of current and future population needs and the long- and short-term advantages and disadvantages of alternative development activity (WCED, 1987; Dalal-Clayton & Bass, 2000). Sustainable development requires that nations take the necessary precautions and implement preventative activities in the areas of technology, science, and politics to ensure global sustainability. For example, each development program should consider the regenerative and absorptive capacities of materials and energy and maintain its output growth below the stipulated threshold stated by the UN and agreed by the government of the country (Gladwin et al., 1995).
New technologies can offer new methods to handle identified international preventative and precautionary obligations while saving resources and reducing consumption. They are also key to economic growth and competitive advantage, which makes them very important in the fight against poverty. At the same time, they can mitigate against practices that threaten the environment through the unsustainable use of resources (WCED, 1987; Porter, 1990). Notwithstanding, new technologies can also produce new ways to pollute and alter the earth’s natural evolutionary progress (WCED, 1987). It is therefore important for technological and scientific researchers to be responsible and take precautions against these possibilities (Gladwin et al., 1995). In addition, it is difficult for industry to control a technology by simply adopting it. To maintain control of technology, firms need to implement environmental technological innovation (ET innovation) as a sustainable development tool (Elkington, 1994; Kemp, 2010).
Accordingly, it is important to understand the contribution and relationship of ET innovation with eco-innovation, innovation, and ultimately, sustainable development. In the case of the Malaysian manufacturing industry in particular, it is imperative to demonstrate that the implementation of ET innovation is genuine and the issues being addressed are tangible. This study briefly describes a few examples of ET innovation in Malaysia using case studies of selected firms. The explanations in the subsections are based on the concept relationship diagram in Figure 1 (BSI/ISO, 2015). We then examine current ET innovation implementation in the manufacturing industry in Malaysia. Section 2 explains the methodology used while the implications are discussed in Section 3, with our conclusions in Section 4.
1.1. Sustainable Development
Sustainability is one of the most debated terms in the modern era (Seghezzo, 2009). The term was first used in the environmental sense by Hans Carl von Carlowitz, a German forester, in his book Sylvicultura Oeconomica (1712) in which he described how forests can be managed on a long-term basis. In the late 1960s and 1970s, an environmental movement started to emerge. Environmentalists were keen to adopt the concept of “greening the economy” so that environmental issues could be related to economic development (Turcu, 2013).
In 1969, the Secretary-General of the United Nations, the Honorary Mr. U Thant, stressed the long-term problems of modern man, which at that time included the arms race, environmental deterioration, the population explosion, and economic stagnation. There were several debates about the limited carrying capacity of the planet, which would hinder economic growth from continuing indefinitely. This was recorded in the controversial report Limits to Growth, which was commissioned by the Club of Rome. At the beginning of the 1970s, technologists also started to shift their emphasis and, alongside the technical and economic focus of their existing approach, added social and ecological implications (Meadows et al., 1972; Pansera, 2012).
The term “sustainable development” was first used in Stockholm at the United Nations Conference on the Human Environment in 1972. However, the first official definition was only introduced by a three-partite union in the World Conservation Strategy (WCS) report in 1980: “For development to be sustainable, it must take account of social and ecological factors, as well as economic ones; of the living and non-living resource base; and of the long-term as well as the short-term advantages and disadvantages of alternative action” (Kruja, 2013). In the WCS report, the union, which consisted of the former International Union for Conservation of Nature (now the World Conservation Union), the United Nations Environment Programme, and the World Wildlife Fund, advocated for balance in development and conservation in attempt to secure the earth for people to live in comfort and happiness (Dalal-Clayton & Bass, 2000; Pansera, 2012). This sparked an effort to develop the Brundtland Report in 1987. The Brundtland Commission provided a definition for sustainable development that continues to be used today. It stated: “Humanity has the ability to make development sustainable to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED, 1987).
The 1987 Brundtland Commission Report on sustainable development focused on the three broad areas of environmental, economic, and social activities (Figure 1[a]). Each area contributes to and disrupts the others in a special relationship that was initially advocated by Rachel Carson in her book Silent Spring, which was published in 1962 (WCED, 1987; Giddings et al., 2002).
For sustainable development to be achieved and the well-being of present and future generations to be improved, technological innovation and social organization needs to be enhanced. Social organization can be improved and managed through innovation at institutional, national, and international levels (WCED, 1987). Innovation in organizations and technology are parts of the concept of eco-innovation. Nevertheless, it must also be emphasized that environmental thinking must be embedded in all aspects of social, political, and economic activities for the concept of sustainable development to succeed. Therefore, it can be concluded that eco-innovation has a direct relationship with the concept of sustainable development, as shown in Figure 1[b] (Elkington, 1994; Kemp, 2010).
The possible contribution of ET innovation toward achieving the global Sustainable Development Goals has been explained in this paper through the concept relationship diagram. This diagram can be used as a guideline for research and activities with sustainability objectives.
The information obtained from the firms in our study indicated some of the trends in the manufacturing industry in Malaysia. However, further empirical analysis and a different scope would be valuable in understanding what the Malaysian industry can contribute to sustainable development initiatives through the implementation of ET innovation.
The authors would like to thank the management of the firms that participated in this research for their valuable cooperation as well as the anonymous reviewers for their comments. Some similarities may be found with the authors’ article in a different journal. These are not intentional because the focus is different.
Abdullah, M., Zailani, S., Iranmanesh, M., Jayaraman, K., 2016. Barriers to Green Innovation Initiatives among Manufacturers: The Malaysian Case. Review of Managerial Science, Volume 10(4), pp. 683–709
Amran, A., Zainuddin, Z., Zailani, S.H.M., 2013. Carbon Trading in Malaysia: Review of Policies and Practices. Sustainable Development, Volume 21(3), pp. 183–192
Arundel, A., Kemp, R., 2009. Measuring Eco-innovation. Maastricht: UNU-Merit
BSI/ISO, 2015. BS EN ISO 9000: 2015 Quality Management Systems - Fundamentals and Vocabulary. London, United Kingdom: BSI Standards Publication
Butler, T., 2004. Leveraging Sustainability: How Companies Enhance Their Eco-innovation Success. Troy, New York: Rensselaer Polytechnic Institute
de Carvalho, F.P., 2014. Portraying the Eco-innovative Landscape in Brazil: Determinants, Processes, and Results. In: Eco-innovation and the Development of Business Models. Azevedo, S., Brandenburg, M., Carvalho, H., Cruz-Machado, V., (eds.). Cham: Springer International Publishing, Volume 2, pp. 117–136
Dalal-Clayton, B., Bass, S., 2000. National Strategies for Sustainable Development: The Challenge Ahead, Environmental Planning Issues. London: International Institute for Environment and Development
Elkington, J., 1994. Towards the Sustainable Corporation: Win–win–win Business Strategies for Sustainable Development. California Management Review, Volume 36(2), pp. 90–100
Eltayeb, T.K., Zailani, S., Jayaraman, K., 2010. The Examination on the Drivers for Green Purchasing Adoption Among EMS 14001 Certified Companies in Malaysia. Journal of Manufacturing Technology Management, Volume 21(2), pp. 206–225
Fussler, C., James, P., 1996. Driving Eco-innovation - A Breakthrough Discipline for Innovation and Sustainability. London: Pitman Publishing
Giddings, B., Hopwood, B., O’Brien, G., 2002. Environment, Economy and Society: Fitting Them Together into Sustainable Development. Sustainable Development, Volume 10(4), pp. 187–196
Gladwin, T.N., Kennelly, J.J., Krause, T.S., 1995. Shifting Paradigms for Sustainable Development: Implications for Management Theory and Research. Academy of Management Review, Volume 20(4), pp. 874–907
Green, K., McMeekin, A., Irwin, A., 1994. Technological Trajectories and R&D for Environmental Innovation in UK Firms. Futures, Volume 26(10), pp. 1047–1059
Guoyou, Q., Saixing, Z., Chiming, T., Haitao, Y., Hailiang, Z., 2013. Stakeholders’ Influences on Corporate Green Innovation Strategy: A Case Study of Manufacturing Firms in China. Corporate Social Responsibility and Environmental Management, Volume 20(1), pp. 1–14
Halim, H.A., Ahmad, N.H., Ramayah, T., Taghizadeh, S.K., 2016. Capturing the 'Pioneering Minds' via Human Capital: The Impact on Innovative Performance of Malaysian SMEs. Asian Academy of Management Journal, Volume 21(1), pp. 105–126
Hojnik, J., Ruzzier, M., 2016. The Driving Forces of Process Eco-innovation and Its Impact on Performance: Insights from Slovenia. Journal of Cleaner Production. Volume 133, pp. 812–825
Horbach, J., Rammer, C., Rennings, K., 2012. Determinants of Eco-innovations by Type of Environmental Impact-The Role of Regulatory Push/Pull, Technology Push and Market Pull. Ecological Economics. Volume 78(11), pp. 112–122
Kammerer, D., 2009. The Effects of Customer Benefit and Regulation on Environmental Product Innovation: Empirical Evidence from Appliance Manufacturers in Germany. Ecological Economics. Volume 68(8–9), pp. 2285–2295
Kemp, R., 2010. Eco-innovation: Definition, Measurement and Open Research Issues. Economia Politica, Volume 27(3), pp. 397–420
Kemp, R., Pearson, P., 2007. Deliverable 15. Final Report of the MEI Project about Measuring Eco Innovation. Maastricht, Netherlands: UM-MERIT
Kruja, A.D., 2013. Sustainable Economic Development, a Necessity of the 21st Century. Mediterranean Journal of Social Sciences, Volume 4(10), pp. 93–98
Lin, R.J., Chen, R.H., Huang, F.H., 2014. Green Innovation in the Automobile Industry. Industrial Management & Data Systems. Volume 114(6), pp. 886–903
Lo, M.C., Wang, Y.C., Wah, C.R.J., Ramayah, T., 2016. The Critical Success Factors for Organizational Performance of SMEs in Malaysia: A Partial Least Squares Approach. Review of Business Management, Volume 18(61), pp. 370–391
Magnani, E., Tubb, A., 2012. Green R&D, Technology Spillovers, and Market Uncertainty: An Empirical Investigation. Land Economics, Volume 88(4), pp. 685–709
Meadows, D.H., Meadows, D.L., Randers, J.J., Behrens, W.W., Rome, C.O., 1972. The Limits To Growth, A Report for the Club of Rome’s Project on the Predicament of Mankind. New York: Universe Books
Meutia, Ismail, T., 2015. The Influence of Competitive Pressure on Innovative Creativity. Academy of Strategic Management Journal, Volume 14(2), pp. 117–127
Mowery, D., Rosenberg, N., 1979. The Influence of Market Demand Upon Innovation: A Critical Review of Some Recent Empirical Studies. Research Policy, Volume 8(2), pp. 102–153
OECD, 2009. Sustainable Manufacturing and Eco-innovation: Framework, Practices and Measurement Synthesis Report. Paris: OECD Committee on Industry, Innovation and Entrepreneurship (CIIE)
Pansera, M., 2012. The Origins and Purpose of Eco-innovation. Global Environment. A Journal of History and Natural and Social Sciences, Volume 7/8, pp. 128–155
Porter, M.E., 1990. The Competitive Advantage of Nations. Harvard Business Review, pp. 73–91
Rao, P., 2004. Greening Production: A South-East Asian Experience. International Journal of Operations & Production Management, Volume 24(3), pp. 289–320
Rashid, L., Yahya, S., Shamee, S.A., Jabar, J., Sedek, M., Halim, S., 2014. Eco Product Innovation in Search of Meaning: Incremental and Radical Practice for Sustainability Development. Asian Social Science. Volume 10(13), pp. 78–88
Rennings, K., 1998. Towards a Theory and Policy of Eco-Innovation-Neoclassical and (Co-) Evolutionary Perspectives, ZEW Discussion Paper. Mannheim, Germany: ZEW - Zentrum fu?r Europa?ische Wirtschaftsforschung/Center for European Economic Research
Rennings, K., 2000. Redefining Innovation — Eco-innovation Research and the Contribution from Ecological Economics. Ecological Economics, Volume 32(2), pp. 319–332
Rennings, K., Ziegler, A., Ankele, K., Hoffmann, E., 2006. The Influence of Different Characteristics of the EU Environmental Management and Auditing Scheme on Technical Environmental Innovations and Economic Performance. Ecological Economics, Volume 57(1), pp. 45–59
Seghezzo, L., 2009. The Five Dimensions of Sustainability. Environmental Politics, Volume 18(4), pp. 539–556
Spykerman, N., 2015. PM Banking on Green Biz. Available Online at http://www.thestar.com.my/News/Nation/2015/09/12/PM-banking-on-green-biz-Eco-sector-can-help-boost-GDP/
Triebswetter, U., Wackerbauer, J., 2008. Integrated Environmental Product Innovation in the Region of Munich and Its Impact on Company Competitiveness. Journal of Cleaner Production, Volume 16(14), pp. 1484–1493
Triguero, Á., Cuerva, M.C., Álvarez-Aledo, C., 2017. Environmental Innovation and Employment: Drivers and Synergies. Sustainability, Volume 9(11), p. 2057
Tseng, M.L., Wang, R., Chiu, A.S.F., Geng, Y., Lin, Y.H., 2013. Improving Performance of Green Innovation Practices Under Uncertainty. Journal of Cleaner Production. Volume 40, pp. 71–82
Turcu, C., 2013. Re-thinking Sustainability Indicators: Local Perspectives of Urban Sustainability. Journal of Environmental Planning and Management, Volume 56(5), pp. 695–719
World Commission on Environment and Development (WCED), 1987. Report of the World Commission on Environment and Development: Our Common Future. Geneva: WCED, United Nations
Ye, F., Zhao, X., Prahinski, C., Li, Y., 2013. The Impact of Institutional Pressures, Top Managers’ Posture and Reverse Logistics on Performance-Evidence from China. International Journal of Production Economics. Volume 143(1), pp. 132–143
Yusuf, M.F., Ashari, H., Razalli, M.R., 2018. A Study on the Environmental Technological Innovation Strategy of a Malaysian Firm. International Journal of Engineering & Technology, Volume 7, pp. 261–268
Zhou, K.Z., Li, C.B., 2010. How Strategic Orientations Influence the Building of Dynamic Capability in Emerging Economies. Journal of Business Research. Volume 63(3), pp. 224–231