MIT Sloan Management Review

Over the past decade, companies have become increasingly aware of the social and environmental pressures facing business. Many management scholars and consultants have argued that these new demands offer terrific opportunities for progressive organizations, and innovation is one of the primary means by which companies can achieve sustainable growth. But, say the authors, the reality is that managers have had considerable difficulty dealing with sustainable-development pressures. Specifically, their innovation strategies are often inadequate to accommodate the highly complex and uncertain nature of these new demands. In response, the authors propose the concept of sustainable-development innovation, or SDI. In contrast to conventional, market-driven innovation, SDI considers the added constraints of social and environmental pressures. SDI is therefore usually more complex, because there is typically a wider range of stakeholders, and more ambiguous, as many of the parties have contradictory demands. Furthermore, sustainable-development pressures can be driven by science that has yet to be accepted fully by the scientific, political and managerial communities. Organizations that fail to understand such issues could well find themselves making costly mistakes in bringing new technologies to market.