Can sustainability be achieved through sustainable oriented innovation practices? Empirical evidence of micro, small and medium scale manufacturing enterprises

Abstract

<jats:title>Abstract</jats:title><jats:p>In today's scenario, where companies are driven by fast changes, their survival depends on their ability to pursue sustainable development through innovation. This issue has led to the discussion about how companies should manage innovation to meet the demands of sustainability. Recently, researchers have identified that bringing changes into various managerial aspects has the potential to support both innovation and sustainability. The present study contributes to this field by analysing the causal relationships amongst the sustainability capabilities at the organisational level through the structural equation modelling method. The responses of 301 owners and managers of micro, small and medium scale enterprises in an emerging economy context are examined. A more holistic approach, as promoted by the United Nations Sustainable Development Goals, is used in order to achieve the multi‐dimensional mix of environmental, social and economic performance indicators. The findings of this study reveal that government initiatives influence firm size and technological resources significantly. Financial resources have a significant influence on collaboration capability. Moreover, capacity building has emerged to be a significant determinant affecting sustainable oriented innovation. This study also makes a contribution to the contingent resource‐based theory by providing an understanding of the significance of various contingencies and integration of resources for application of sustainable practices. The authors hope that the present research is able to help government and managers so that they can provide every support to indigenous manufacturing, innovation and implementation of climate resilient technologies.</jats:p>