Integrated environmental product innovation in the region of Munich and its impact on company competitiveness

Abstract

This paper examines the impact of environmental innovations on company competitiveness of both the environment industry and related sectors in the region of Munich. The focus is on the drivers of these innovations and their respective effects on innovating companies. Not only innovations in the area of end-of-pipe technologies, but also the development of integrated products and production methods are examined. In a regional case study approach, a sample of 14 manufacturing and service companies in Munich (Southern Germany) was interviewed. Essentially, environmental innovation is driven by a mixture of factors internal and external to the firm: not only regulatory pressure, but also cost pressure, competitive advantages, technological lead and customer pressure are important drivers. Regulatory pushed innovations contribute to the competitive performance of sample companies in a similar way as environmental innovations which are carried out voluntarily. That would yield proof for the so-called Porter hypothesis which assumes that environmental legislation stimulates innovation and leads to “win–win” opportunities where simultaneously pollution is reduced and productivity increased.