Environmental sustainability has become a pertinent issue for businesses in all industries. The climate change challenge has been the main driving force for the pursuit of environmental sustainability. Being a major contributor of pollution, the consumer electronics industry has been putting measures in place to address environmental sustainability challenges. Some of these innovative measures include coming up with new product designs and innovations in aspects like energy efficiency, manufacturing and delivery of products. This study has identified a gap of knowledge in determining whether or not there has been effective adoption and diffusion of the eco-innovations that these companies have developed over the years. This dissertation uses the quantitative research approach. Analyses of the data reveals a significant (p=0) moderate, positive relationship between the adoption of eco-designs and energy efficiency innovations and firm profitability at correlation index values of 0.60 and 0.58, respectively. The researcher concludes that consumer electronics companies are effective in the adoption and diffusion of eco-innovations. In addition, 11 areas of improvements have also been identified and the corresponding recommendations listed in the last chapter of this paper. Three areas of further studies have also been documented.
Based on Wang et al., (2015), innovation culminates in economic development in a process that involves new technologies replacing old ones. This process has also been termed “creative destruction”. In recent times, Andrae & Xu (2014) posit that environmental innovation, also referred to as eco-innovation, has gained much ground in both practice and literature. Eco-innovation is a form of innovation that results in a better environment in addition to an economic exchange. In this regard, the innovator expects profits from market diffusion and a contribution to making the environment better. Azevedo et al., (2014) point out that the main reason why it is essential to support eco-innovation is because it will determine the viability of business in the future. Another reason for supporting eco-innovation is that the environmental industry is worthy hundreds of billions all over the world (Wang et al., 2015). Nevertheless, there is an indication that the diffusion of environmental innovations faces numerous challenges in comparison to other forms of innovation. This dissertation will seek to improve the understanding of diffusion of eco-innovations in consumer electronics markets. Manufacturers of consumer electronics are significant contributors of the global and national economies. In addition, their activities have immense impact on the environment. According to Cecere et al., (2014), makers of consumer electronics are contributing to at least 20% of all industrial pollution. In addition, there is also significant pressure from the society for companies such as Google, Xiaomi, Apple, Amazon, Sony and Samsung among to innovate environmentally. Some of the eco-innovations by consumer electronics companies have been successful while others have failed. In addition, with some of these companies spending so much money to meet regulation standards and with no guarantee that the innovations will be successful, adoption has not been easy.
Environmental innovation has become synonymous with efforts of organizations and industries such as recycling programs, renewable energy and natural products. In accordance with Xing et al., (2013), the common factor among environmental innovation is that they seek to use less to do more. They seek to optimize operations, cut waste and producing goods and services that are better for the planet and posterity. Companies are taking pride in engaging in such activities. However, they are not just nice corporate sustainability activities. The World’s 50 Most Innovative Companies (2014) reports that environmental innovations are becoming essential contributor to the bottom line of consumer electronics companies; Therefore, one of the main reasons for this paper is that there is a business case for the diffusion and adoption of environmental innovations. In addition to the economic effect, Chen et al., (2014) suggest that environmental innovation is also associated with ah domino effect in organizations. The implication is that with time an organization that has decided to implement environmental innovations shift from project and product based innovations to across the board implementation. Therefore, as the organization moves towards full adoption of econ-innovations they reap more benefit and have a larger positive impact on the environment.
Another reason is that companies in the consumer electronics sector can learn from other organizations in the industrial sector that eco-innovations are working. According to the 2014 S&P 500 report on climate change, United Parcel Service (UPS) achieved a 100 score (S&P 500, 2014). The company has been pursuing environmental innovation since 1999. The company was already measuring its impact on the environment and the society. However, with the introduction of the Global Reporting Initiative and the Carbon Disclosure Project, the company found that sharing eco-innovation information with external stakeholders was beneficial. Today, the company is very keen with regard to the carbon footprint of its activities, energy efficiency of its facilities and end-of-life disposal.
Another reason for this research is that resources in the world are growing scarcer. Therefore, consumer electronics companies need to have more comprehensive approaches of using available resource. Such an approach can be implanted through the successful diffusion of eco-innovation into the sector. The operations of companies in the consumer electronics sector should thus be informed by a long-term perspective. These complain need to have an understanding of how climate change and the resulting scarcity of resources will impact their value chains – from recycling to raw materials. As pointed out by Simboli et al., (2014) such organizations will be better positioned to increase their share of the market. AS they cut down on waste and increase their productivity efficiency they will become more competitive in industries that have been marked with higher prices and declining availability. Mckellar et al., (2015) add that today, environmental innovation have been associated with a reduction in costs at the different stages in the process of production, better mitigation of risks and an increase in revenue. Such organizations seem to have more stable supply chains compare to those that are only inclined towards incremental goals.
With companies such as Apple being ranked the most valuable in the world and their operations along the value chain being criticized, the diffusion and adoption of eco-innovation remains a pertinent issue in the industry (Forbes, 2015).
The diffusion and adoption of eco-design innovations among consumer electronics companies is effective
The diffusion and adoption of energy efficiency innovations among consumer electronics companies is effective.
The diffusion and adoption of green manufacturing eco-innovations among consumer electronics companies is effective
The diffusion and adoption of clean delivery eco-innovations among consumer electronics companies is effective
The aim of this study is to determine effectiveness in the diffusion and adoption of eco-innovations among consumer electronics companies
- To determine the effectiveness in the diffusion and adoption of eco-design innovations among consumer electronics companies is effective
- To determine the diffusion and adoption of energy efficiency innovations among consumer electronics companies is effective.
- To determine the effectiveness in the diffusion and adoption of green manufacturing eco-innovations among consumer electronics companies
- To determine the effectiveness in the diffusion and adoption of clean delivery eco-innovations among consumer electronics companies
The dissertation is made up of six chapters. The first chapter, which is the introduction, introduces the research problem and objectives of this dissertation. The second chapter is the literature review, which discusses the diffusion and adoption of various environmental innovations. Chapter three contains the methodology that was used to collect, analyse and present that data upon which inferences are made. The fourth chapter is the analysis of the data that was collected. Chapter five contains the discussion of the results and corresponding conclusions.
Environmental innovation is gaining much ground over the recent past. Many companies in the consumer electronics sector and other industry sectors are finding strategic reasons to invest in eco-innovation. However, it is important to determine whether these innovations are effective. In order to determine the effectiveness of the various eco-innovations in the sector, this paper breaks them into four categories. These are eco-design innovations, energy efficiency innovations, green manufacturing innovations and clean delivery innovations. The objectives of this dissertation are derived from the four categories. The four hypotheses are based on the expected outcomes of the analysed data. The following sections rely on extant literature from diverse sources to discuss how consumer electronics companies have endeavoured to adopt these innovations.
According to Ravi (2015), eco-design means that the company starts off right and proceeding to the creation of brands that will have not have a negative impact on the environment. It also means the use of the most efficient designs that need maximizing recyclability and reusability as well as using the fewest materials possible. According to Dylan (2012), some practices in the industry are already supporting the eco-design ideology. For instance, miniaturization is an example of such a strategy that has been evident in the manufacture of computers, cameras and cell phones. However, Petrović et al., (2012) counter this point by noting that there is a change in the market that has been driving innovators towards increasing the size of commodities such as smartphones. For, instance the latest iPhone is the largest ever. Apart from smartphones becoming larger, there is a notable focus in the industry to reduce the amount of raw material that are needed to make products. Organizations are also seeking to reduce the amount of energy that is used in the production process, transportation and fabrication. In addition, the eco-design attribute of environmental innovations is also supported by the endeavour of companies to reduce the amount of energy that is needed to use, recycle and reuse the commodities. The optimization of shelf space and shipping also mean that more products can reach the market at the shortest time.
Based on Petrović et al., (2012), the signature design in environmental design is referred to as Design for Environment (DfE). Global environmental protection agencies have been publishing guidelines that companies have found to be quite useful in DfE. The focus in this case is to make products from recyclable materials and ensure that the gadgets are easy to disassemble. Many companies in the industry are now having clear DfE programs and other are using the guidelines in order to reduce cost. For example Philips and HP have been using the DfE design ideology for more than 15 years (Paladino & Ng, 2013). In addition, the industry is trying as much to eliminate the use of chemicals that have been found to be hazardous. Companies are also using internal guidelines on the energy use, noise, weight and number of device parts that can be recycled. In addition, Luan, Tien & Wu (2013) note that many of the components are being made in a way that the company can use them again. This means that consumer electronics companies today are more motivated to collect used products from their customers.
The Green Electronics Council (GEC) has come up with a ranking system that consumers can use to determine the environmental friendliness of commodities. The rating system evaluates the commodities based on 51 criteria in categories such as packaging, design for end-of-life, and material use. The system has reduced the amount of material used by compliant brands by 75.5 million tonnes (Li et al., 2015). Additionally, the certification that is offered by GEC has also led to the reduction of the amount of mercury used in compliant commodities by more than 3,200 tonnes and saved more than 42.3 billion kWh of electricity (Li et al., 2015). To put it in perspective, 42.3 billion kWh of electrical power can supply electricity to close to 4 million homes in the United States (Li et al., 2015).
However, Mangiaracina et al., (2015) are of the opinion that since most of the companies in the industry has not yet determined how eco-design can contribute to their bottom lines. The cost of investing in eco-friendly design has thus been determined as the main hindrance that companies have faced with regard shifting towards eco-friendly design. On the other hand, there are companies that have realized the business case for eco-design. For example, in 2013, Philips claimed that approximately 20 percent of its sales were coming from products that can be described as green (Jayaraman et al., 2012). Therefore, the company was able to improve in the eco focal areas such as packaging, disposing and recycling and hazardous substances. Chiarvesio et al., (2014) note that Epson reported that up to 45 percent of their consumers were referring to a green criterion when making purchases. For this reason, there are an increasing number of green criteria that is accessible to customers. Therefore, customers can choose products that have been certified as green with regard to their design and the design of their processes. In accordance with the Green Electronics Council close to 90 percent of the eco-attributes of a product come from its design. The implication is that in order for consumer electronics. The next section discusses the diffusion and adoption of eco-innovations with regard to energy efficiency. Cramer (2015) states that the energy that a consumer electronic uses in its life-time has been found to be even more important than the energy that the company use to make the device. This point is included in this part of the paper because as pointed out by Wang et al., (2015), energy consumption is an integral part of the design of a consumer electronic device.
According to Jansson (2011), a product is energy efficient if it is using less electricity from the outlets compare to those commodities that are not efficient. In the long run, the batteries of the device will require less charging and will last for longer than for the energy efficient devices. The efficiency will also reduce the emission of greenhouse gases, save money and lead to the production of less hazardous waste. Just like in the case of cost reduction, energy efficiency is the aim of most of the companies in the sector whether for competitiveness reasons, cost or physical design. Kasulaitis et al., (2015) point out that energy efficiency has been an integral part of the environmental innovation of most of the consumer electronic products in the market. Nearly all the products in the industry are made to use lesser amounts of electrical power in comparison with their predecessors. However, Crocker (2015) points out that it has not been an initiative in the industry without its share of challenges. Some manufacturers are finding it very challenging to make products that consumer less power without compromising with the quality of the product with regard to features, functionality and performance. For instance, battery technology is one of the main challenge that smartphone makers face when seeking to make brighter smartphones (Quad HD). The more than 500 ppi that the battery is supposed to push drains the battery faster. The paradox is made even more challenging when smartphone manufacturers are chasing the trend of the slimmest smartphones. The slimmer the smartphone the smaller the battery, while the brighter the screen, the more the battery needed.
Long-life batteries and alternatives to batteries will be important differentiators in the in the industry. The benefit of such technologies will be that devices will be able to stay on for longer and the rate of disposing batteries will also reduce.
Leading companies in the industries have developed tools to study the energy consumption of devices. However, the efficiency and effectiveness of these tools is yet to be empirically determined. With regard to product lifecycle and specifically, battery life, there have been contractions concerning the commitment of firms. Most of the firms in the industry are seeking to sell more devices every quarter and with the release of every flagship. The implication is that the devices sold in the previous year are supposed to be replaced with new ones. Therefore, Kam-Sing (2012), notes that although the energy efficiency of consumer products is high during the first six months of use, there is evidence depicting that over the next 2 years, efficiency reduces substantially. Therefore, it could be possible that the devices are not built to last, in this respect. Companies have to balance between the longevity of the product lifecycle and sales.
Lifecycle analysis tools help companies to choose the raw materials, manufacturing processes, components, and re-use strategies before making the product in order to minimize the amount of energy that the devices will use (Kam-Sing, 2012). These factors have to be determined before the product has been made. Some companies have been able to reduce the amount of power consumer by some of its devices and from that derived significant profits. For example, according to Panasonic (2014), since 2000 Panasonic has been able to reduce the standby power o tis TVs by up to 96 percent. That means that the company has been able to save close to 4 billion kWh of electrical power that would have been consumed over that period of time. Some companies have been able to increase both the performance of their product and save energy consumption at the same time. For example, today, Epson printers are consuming just 30 percent of the power that they use to consume in 2000 (Epson, 2014). The shift from CRT to LCD screens also had a very huge impact on the energy consumption of devices. Diverse certifications have been put in place to support energy efficiency. The ENERGY STAR certification has been one of the most successful. Today, billions of devices are certified by ENERGY STAR. These range from video and audio products, monitors, to televisions.
Intel is of the most successful company in the industry that works with numerous other companies by supplying them with chips. This means that the energy efficiency of devices made by companies such as Samsung and Apple is also determined by external players such as Motorola, Asus and Intel. Intel has been so effective in making energy efficient chips that the current microprocessor is more than 40 percent more efficient than the one that was produced 18 months ago. The amount of energy that has been saved between 2010 and 2014 by upgrading microprocessors is more than that which would have been saved by taking millions of cars off the road (Intel, 2014). In addition to microprocessors, the company has also invested in improving the energy efficiency of its data centres all over the world. Between 2010 and 2014, the company was able to reduce the amount of energy that is used in its data centres by more than 30 percent (Intel, 2014). Additionally, the company has also been providing incentives to its employees to come up with and support innovations that are related with energy efficiency. The compensation model at the company upholds the commitment of Intel to energy efficient innovations. For instance, bonuses at the company are tied to milestones in energy efficiency (Intel, 2014).
Another company that is a leader in energy efficiency in consumer electronics is Lenovo. The company has conducted numerous studies to identify the needs and interests of its consumers with regard to energy efficiency (Lenovo, 2014). Such research has enable the company to be ahead of other market players. Years ago, consumers were very eager to replace CRT monitors with flat screens. However, the company has constantly questioned the energy efficiency of these flat screens. Currently, the company’s LED screens are up to 20 percent more energy efficient than those of most of the competitors (Lenovo, 2014). However, the company has not just improved the energy consumption of its screens but has also invested in making sure that they are also better with regard to brightness and colour uniformity. This is a perfect example of the goal that many of companies in the industry are seeking to achieve; attain high energy efficiency without compromising on the quality of products. In addition to the energy efficiency of products, the process of making products also determines the commitment of the organization to green technology. The next section, discusses environmental innovation in facilities and manufacturing in the consumer electronics sector (Lenovo, 2014).
The manufacturing facilities of consumer electronics companies are important measures of the commitment that an organization has adopting environmental innovations. However, the offshoring of labour and manufacturing means there are more than one legal entities who are supposed to ensure that the manufacturing of products is informed by environmental innovations. Companies that have contracted off-shore manufacturers have been criticized for not neglecting manufacturing processes and taking adjuvant of fax laws in other countries. Therefore, Grayson & Kjelleren (2015) note that it is important for companies that have shifted their production to India and China to ensure that the manufacturing processes in those countries must adhere to legal requirements. In addition meeting the minimum legal requirements, these companies should also invest significantly to ensure that manufacturing innovations are evolving at the same rate as the other environmental innovations.
Based on Goepp et al., (2013), all form of waste reduction in a factory is important to the planet. Lean manufacturing is one of the manufacturing eco-innovations that an increasing number of companies are embracing in recent times. The strategy has been effective in the reduction of waste and has also helped to create efficiencies in manufacturing all over the world. An example of this strategy of manufacturing is increasing material efficiency so that the processes of production are using less water, energy, and fewer chemicals. Plants are also reusing and recycling metal, water and other raw materials has also made manufacturing facilities more environmentally friendly. Lean manufacturing also includes the early and intelligent testing of products in order to ensure that it is possible to catch most errors and create less scrap. Lean manufacturing is beneficial to all stakeholders including the company, the consumer and the environment. When an organization is able to use less paper, water, gas and electricity, it can make more money. By using fewer chemicals, the products that the company is making are safer, the work space is cleaner and the organization can easily comply with environmental regulations. In accordance with Durugbo (2013), using less to make more makes a business sense. However, money is not the only reason that market players are supposed to support eco-innovations at the floor of the factory. The environmental impact should be the main goal of an organization that is using lean manufacturing and other environmental interventions. The implication is that in order for an organization to be green in manufacturing, it faces the challenge to seek high goals with regard to reduction. Ravi (2015) recommends that companies that are seeking to implement innovative manufacturing can find more creative ways of greening their processes such as composting food waste that can be sold to agricultural customers or even used for landscaping.
Jansson (2011) posits that most of the players in the industry seem to have harmonized the reduction in the emission of greenhouse gases over the recent past. This means that most of the interventions that are in use in the industry have been adopted by most of the companies. Nevertheless, some of the companies are moving further towards the resource conservation as opposed to just using mainstream lean manufacturing innovations. Some of the recent innovations that are making their way into the facilities include the use of motion sensor to switch offer lights and LED lights that do not use mercury. E-commerce and telecommuting are also among some of the innovations that are making their way into companies and thus keeping cars off the road and reducing the consumption of electrical power.
Xing et al., (2013) determined that up to 30 percent of electrical power in buildings in used in an inefficient manner. Resource conservation innovations can come in handy in reducing the wastage. On the other hand, Andrae & Xu (2014) posit that such interventions can only be introduced in a sporadic manner in order for them to integrate into the culture of the organization. Even if the changes are put into place but the employee who are expected to support them are not willing to cooperate, they would not be very effective. This implies that the management is charged with the duty of creating a workplace culture that is bent towards the conservation of resources. With the cost of electricity having increased by more than 10 percent globally over the past four years (The World’s 50 Most Innovative Companies, 2014), it is necessary for companies in the industry to focus on creating facility and office environments that support conservation. Furthermore, Cramer (2015) points that although there are many companies in sector that are reporting on their carbon footprint and greenhouse gas emissions, it may not be possible to verify the information. Therefore, companies are supposed to seek for way they can both improve measurements and integrate the information they have gathered into manufacturing practices. As stated by Simboli et al., (2014), some of the industry leaders like Cisco, Intel and Best Buy are setting up Leadership in Energy and Environmental Design (LEED) certified facilities. According to Azevedo et al., (2014), retrofitting or building LEED facilities has been found to save at least 25% of energy that is used in the factory. Considering that buildings contribute to close to half of all greenhouse gas emissions, LEED facilities would have a considerable impact on the environment. However, it is also essential to note that many smaller market players may not be in a position to invest in LEED facilities, especially if they already have built and fitted their manufacturing units. Therefore, Petrović et al., (2012) outline that it is cheaper if a new market player gets it right the first time, as opposed to making changes later. However, for those start-ups that have already established themselves in the industry, they may find that retrofitting is an option they can take instead of building an entire facility. Some of the small innovative improvements that a small organization can put into place include smart system controls, efficient lighting, boiler efficiency, and air conditioning, ventilation and heating improvements.
Before consumer electronics arrive at the home or office of the customer, they pass through many processes along the supply chain. Effective supply chain management seek to ensure that the cost of producing the product and taking it the customer is as efficient and as fast as possible. Supply chain management is an integral part of environmental sustainability ( Li et al., 2015). If the organizations within the supply chain can agree that their goal is to save time, materials and energy, then they can come up with a simpler and safer way of ensuring that products are reaching to customers. The choice of routes can be one of the ways that organizations can improve their management of supply chains. For instance, Paladino & Ng (2013) note that one of the players in the market has managed to save more than 85% of the fuel used by eliminating the use of trans-Pacific flights. A closer coordination with partners along the supply chain and choosing more efficient transportation mean will have an impact on fuel consumption. Li et al., (2015) posit that most of the companies in the industry are requiring that their partners meet standards for non-hazardous and clean materials in the components they are using to make products.
Mckellar et al., (2015) state conducting a sustainability audit of partners is a clean delivery innovation that can enhance compliance. Nevertheless, it should be noted that some companies that are in clear violation of sustainable delivery along the value chain may not be willing to collaborate in such a way. Therefore, it should be expected that only partners who have the same initiative and policy may be able to collaborate in this manner. However, this does not seem to be an issue for the larger players in the market. For instance, Epson collaborates with customers and suppliers by providing an eco-profile for all its product (Epson, 2014). The profile shows all the materials that have been used to make the product. This profile can come in handy in coordinating environmental efforts in the supply chain.
One of the innovations that have been quite successful has to do with shipping. Today, most of the companies in the industry are able to pack multiple product functionality. For example, by shipping smartphone, company has managed to ship a camera, GPS system, watch, music recorder/player, and a small computer. As technology continues to consolidate functions, less hardware will be shipping. Such innovations are allowing the consumer to do more with less and the companies are able to reduce their carbon footprint. In the near future, it is very likely that more consolidation will lead to a reduction in the number of products that companies are sending.
Employee travel and commuting is also another important aspect of eco-innovation in delivery. In order for companies in the industry, to have a higher positive impact on the environment, Cecere et al., (2014) state that they have to reduce the number of business travels among employees. According to Mangiaracina et al., (2015), reducing travel by 20 to 50 percent has been found to have a significant impact on the carbon footprint of organizations. There are numerous options that companies in different industries are experimenting with. The innovations including telecommuting, biking to work, carpooling, using public transport, video and web conferencing, and using hybrid and electric cars. These options have been devised in recognition of the need to reduce the movements among employees that are generating waste and using resources.
Companies also need to appreciate that their interaction with the product does not end when it reaches the store. Companies in the consumer electronics business are among the most concerned with the experiences that the society is having with its products. Nevertheless, this interest seems to wane off as the company introduces newer devices. The companies are faced with the challenge of following up with older products and find out how the consumers are getting rid of them. Specifically, the companies are supposed to double their collection and recycling efforts. They need to ensure that the consumers are properly recycling older devices. They are also supposed to provide support to encourage the use of older devices in a manner that will not harm the environment. Of all interventions that companies can be involved in, Jayaraman et al., (2012) note that this one may be the cheapest one. Therefore, all market players regardless of their sizes are in a position to ensure that the consumer is interacting with products in a way that will not harm the environment. The single use Kodak camera may appear to be a burden to the environment. However, according to Kodak (2013), the company has put in the necessary delivery innovative interventions and in 2007 alone, the company was able to collect 120 million of the cameras from all manufacturers (Kodak, 2013). Since 1990, the company has been running a program that has been able to recycle 1.8 billion single use cameras (Kodak, 2013). In addition, the company has also taken the innovative program further. Today, close to all the single use cameras that the company is making are using parts that have been recycled.
Consumer electronics companies are among the organizations that are contributing a large share of environmental pollution. Therefore, it is only right for them to adopt innovations that reverse the impact of their processes and products are having on the environment. The effect of putting in place the interventions that have been discussed in the literature review is that many stakeholders will benefit from such activities. These include the companies, the society in general, consumers and businesses in other industries. Most importantly, eco-innovations in product design, energy efficiency, green manufacturing and clean delivery with address current and future global challenges like resource scarcity and climate change.