Sustainability-oriented innovations and value creation in SMEs: An illustration in the Colombian context

Abstract

Unlocking the potential of small and medium-sized enterprises hinges on grasping the underlying principles driving the development of sustainability-oriented innovations. It empowers this community of firms to contribute to sustainability and, at the same time, generate value. In this sense, drawing on the sustainable value creation model, the purpose of this study is to propose a framework for sustainability-oriented innovations in small and medium-sized enterprises by analyzing various strategic approaches. The study employs a theoretical approach aligning conceptual foundations with sustainability-oriented innovations. The study utilizes the sustainable value creation model and identifies four strategies suitable for small and medium-sized enterprises: (i) pollution prevention, (ii) product stewardship, (iii) clean technology, and (iv) sustainable vision focused on the base-of-the-pyramid. Further, portfolios of sustainability-oriented innovations, framed in each of the four strategies and in the context of small and medium-sized enterprises found in the literature are discussed. To illustrate each strategy, the analysis of four small and medium-sized enterprises operating in Colombia is conducted. The findings demonstrate how these strategies, combined with the implementation of portfolios of sustainability-oriented innovations, generate value in small and medium-sized enterprises, while promoting sustainability in the case of the context of an emerging economy. Moreover, the study suggests that small and medium-sized enterprises can effectively adopt a strategic orientation toward designing and implementing portfolios of sustainability-oriented innovations. Ultimately, the study highlights the potential of small and medium-sized enterprises in developing economies to contribute strategically to sustainable development, given their unique characteristics.