5 December 2017
The study entitled “Oportunidades de negocio que ofrece el ecodiseño a las empresas del País Vasco”(Business opportunities that eco-design offers firms in the Basque Country), authored by Orkestra researchers Jabier Retegi and Bart Kamp, take business experiences with eco-design as the starting point to examine how this type of activity impacts competitiveness.
A total of 40 firms from different industries were studied. Examples include: energy and electrical equipment, aeronautics, steel, telecommunications, machine tools, biotechnology, automotive..., which mainly operate on international markets.
The study prepared by Orkestra for the Basque Government Environmental Management Agency (Ihobe) defines eco-innovation activities as: the application of eco-design practices in the improvement of products, services and processes either by analysis of the product life cycle; application of protocols to obtain some type of eco-label, European label, environmental footprint; the use of some eco-design product standard or method (i.e. ISO 14006); or product, service or process innovations that aim to reduce environmental impact throughout the product life cycle.
Some of the most remarkable conclusions drawn from the study were the benefits obtained by companies that apply processes of this type. These refer not only to turnover, a better image, access to new markets or positioning on the international market, but also to reduced energy use and emissions both at the firm itself and during product use. In this respect, Orkestra researcher Jabier Retegi pointed out “45% of the firms surveyed for the study state that their power bills are lower since they began to implement eco-innovation actions". He also added: “in 93% of the cases studied, eco-innovation has contributed to increasing product and process design and development capacity”.
Barriers to application
Nevertheless, in spite of the benefits offered by application of eco-innovation tools, factors such as the initial extra costs derived from product and process modification and the difficulty of conveying the value of eco-innovation to the market are still the main barriers to undertaking such processes. To a lesser degree, the amount of work involved in making the modifications, the intrinsic product limitations and the incapacity to modify the product due to dependence on the customer are also drawbacks.
Similarly, Orkestra researcher and co-author of the study Bart Kamp highlighted that “it is striking that lack of financial resources is not among the main obstacles to implementing these processes". He also added that it is remarkable that most of the firms surveyed "are not only familiar with the public aid and support instruments for eco-innovation (74%) but many of them (51%) use them. These figures are even higher for firms that carry out this type of actions systematically on a continuous basis (78%)”.
Incentives for application
The main reason that firms apply eco-innovation is compliance with current or future legislation. In this aspect, legislative action is understood to be the public administration's key role and catalyst.
The second reason is the need to meet customers' demands, pressure from competitors or management's commitment to eco-innovation.
The Basque companies surveyed pointed out that the public administration ought to work on awareness-raising on B2B or B2C markets to foster this type of activity. It should provide buyers with information on the impact that products have on the environment and inform them how to make better purchases and improved use of them. They also added that better public aid should be earmarked for this purpose, from the viewpoint of co-financing R&D+I projects in collaboration with different companies and research centres. Finally, they agreed on the importance of continuing to make progress with legislation on environmental requirements for products and services.
As per public procurement, the firms surveyed complained that it places greater emphasis on price, ignoring the product’s environmental impact or life cycle.
Future importance of being active in eco-innovation
In addition to eco-innovation being a condition to lead the market, the firms surveyed see it as a lever for competitiveness in the future. 59% of the firms believe that eco-innovation helps and will contribute to making them stand out on the markets where they operate.
