Evolving theories of eco-innovation: A systematic review

Abstract

Eco-innovation has become an essential entity for greening the economy. Technological innovations, institutional reforms, and change in social practices are some of the means of eco-innovation. As a result, there is a wide discourse on the many dimensions of eco-innovation since the dawn of the millennium. However, the concept of eco-innovation lacks theoretical consistency; hence, it has remained narrow and disintegrated. Therefore, this study conducts a systematic review of the articles focusing on the significance of theories in relation to the process of eco-innovation, in order to investigate the evolving theories of eco-innovation, highlight the existing research gaps, and to identify directions for potential theoretical development that would be valuable for a deeper system change. The findings show resource-based view, institutional theory, stakeholders theory, and evolutionary theory to be the most commonly used theories, along with identification of material-based enterprises as the primary sectors of implementation exhibiting a strong technological bias. The findings indicate that eco-innovations are primarily perceived from a narrow set of neo-liberal notions that although is effective for incremental improvements, lack credibility for defining the differentiated approach associated with radical eco-innovations. Accordingly, selective pressure by means of policy making process, design dynamic, and societal demand are identified as gray areas requiring greater theoretical attention. An analytical framework built on technological, institutional, organizational and social eco-innovation is represented for exploring the research areas of system change, economic sustainability, product network sustainability, and socio-technical landscape, that facilitates sustainability transition.