Innovation and sustainable development: Linkages and perspectives for policies in Europe, ESDN Quarterly Report June 2011

The main challenge towards the transition to greener, cleaner and more equitable economic growth is to address innovation not only from an economic, but also from a social and environmental dimension. The interface between innovation and sustainable development is difficult to capture, as both are horizontal policy fields, sharing facets with each other and with other policy areas. Various paradigms in research and policy have shaped the directions of innovation, based on the prevailing economic goals in policies, institutional arrangements, and societal values. For centuries, the concept of innovation has been primarily related to economic issues, but environmental and societal pressures have spurred the rethinking of innovations in the context of sustainable development. In the political arena, increasingly stringent economic competition, unequal access to scarce natural resources, an aging workforce and environmental degradation have motivated European institutions to go beyond a traditional understanding of innovation, which focuses mostly on technological solutions and scientific innovation linked to market developments. New innovation concepts such as "eco-innovation", "social innovation", "open innovation", or institutional, governance and organisational innovation are increasingly regarded as a "window of opportunity" for the markets and society to move towards societal progress with an equal, low-carbon and knowledge economy. As innovations are regarded as a means towards this transition, an integrated perspective between social, economic and environmental dimensions should be held in the centre of attention. This report therefore aims to frame the discussion on innovation and sustainable development by outlining various recent concepts, approaches and paradigms, as well as assessing recent European initiatives and some examples of good practices at the national level, in the understanding and vision of innovation.