Sustainable innovation, a combination that guarantees development

The aim of this Index is to provide an overview of the status of the ecosystems of EU nations in terms of Innovation and Sustainability based on the analysis of 35 indicators. However, a series of clear concepts must first be established in order to better understand the correlations made by the Index.

What is Sustainable Innovation?

Sustainable innovation is the integration of environmental, social and good governance aspects in the creation of new products and services that add value to society.

Associating sustainability with innovation makes it possible for organisations to expand their horizons, find new drivers for their creative processes and generate new business opportunities that add social and environmental value. It also allows them to mitigate risks, add knowledge and encourage new lines of business.

On a national level, sustainability makes countries more competitive. Sustainability and competitiveness are two key attributes for a nation’s development, and they have a direct and positive relationship. This phenomenon can be observed by comparing the competitiveness ranking prepared each year by the World Economic Forum (WEF) with the one that analyses the status of each country in terms of sustainability. This correlation indicates that as more effort is invested in improving the sustainability of a country and its businesses, more benefits will be obtained in terms of competitiveness and vice versa.

Innovation occurs in a time and space. The geographic location of innovation depends primarily on a region’s level of specialisation, incentives, and good governance on a sociopolitical level. This is why certain countries perform better than others.

Whether on a technological, organisational, institutional or social level, the countries capable of identifying an ecosystem for sustainable innovation that absorbs all the impact are the ones that will yield results to the benefit of citizen quality of life, natural resources and corporate competitiveness.

Factors that make up Sustainable Innovation

The ecosystem for sustainable innovation is made up of a number of interrelated factors. Firstly, certain determinants about a country’s policies and atmosphere comprise the “potential” of sustainable innovation. This potential leads to a series of investments and projects for innovation: the “activity” of sustainable innovation. Lastly, this activity creates various benefits for the environment, society and the effective operation of organisations: the “results” of sustainable innovation. In turn, these results must feed the ecosystem and boost its initial potential.

This is how the indicators have been grouped into three categories according to the stage of sustainable innovation they contribute to: Potential, Activity and Results. Within each category, the indicators have been classified into three aspects: Environmental, Social and Good Governance.

Each aspect carries the same weight in every category, thereby making it possible to analyse the balance between these three pillars of sustainability in different scenarios.