The Effect of Sustainability as Innovation Objectives on Innovation Performance in the Service Industry

Though sustainability is a concept encompasses not only environmental issues but also others such as social issues, most studies on sustainable innovation has focused on environmental facets. While sustainability-related objectives exist as motivations for firms to perform innovation, moreover, the effect of them on innovation performance is still not fully answered.BR In this paper, we focused on sustainability as innovation objectives other than environmental issues, and figured out the effect of them on innovation performance. We set the limit to service industry only and performed regression analysis.BR The result showed that the safety improvement has positive effect on both radical and incremental product innovation, while material and energy reduction turned out to be negatively related to incremental product innovation. We also found that high level of safety improvement tend to increase the probability of firms adopt process innovation, while material and energy reduction tend to lower the probability.