The other side of sustainable innovation: is there a demand for innovative services?

As one prominent form of sustainable innovation, eco-efficient services have been promoted as a promising way towards more sustainable societies. However, they have not turned into reality as expected. This paper argues that one of the primary reasons for the slow market penetration of eco-efficient services is the mismatch between customers’ needs and service providers’ offerings. While previous research has predominantly focused upon a variety of aspects of existing or potential eco-efficient service concepts, there is hardly any systematic research on customer needs for innovative eco-efficient services. In order to start to bridge the knowledge gap, we investigate such customer needs through the analysis of interview and survey data obtained from over 300 potential customer companies in Finland, most of which operate either in the EU or globally. The paper discusses what kinds of eco-efficient services customers need and under what conditions, and which barriers hinder the use of eco-efficient services by business customers. The customer companies desire material efficiency services for managing side streams and non-core processes. They primarily seek cost and broader business-efficiency improvements from these services, and find that service providers should be able to construct a clear business case when marketing services. Finally, although there are material efficiency services in the market, customer companies find they are not being marketed actively.