Linking energy efficiency and innovation practices: Empirical evidence from the foundry sector

• The relation between innovation practices and energy efficiency is articulated.
• The link between innovation practices and energy efficiency is tested for foundries.
• Energy efficiency is measured with three different indicators.
• Analyses of the relations between these indicators support the link with innovation.
• Concurrent adoption of internal R&D and inbound practices leads to higher efficiency.

The Europe 2020 strategy currently promotes energy efficiency and innovation through disconnected targets focusing on either energy or R&D. Similar policies indicate that in practice, these two concepts are usually perceived as mutually exclusive. Furthermore, evidence in the literature regarding the relationship between R&D and energy efficiency is still highly limited. This exploratory study aims to address this gap by investigating the link between innovation practices and energy efficiency through a multiple case study of 30 foundries in Northern Italy. We analysed the firms' innovativeness, measured by internal R&D and Open Innovation practices (inbound and outbound), and energy efficiency, measured by specific energy consumption, level of adoption of energy-efficient technologies and barriers to energy efficiency. The results seem to show that those foundries complementing internal R&D with inbound practices have a higher level of energy efficiency, a higher level of adoption of available technologies, and a lower perception of barriers to efficiency improvements. This finding suggests that diversifying innovation practices could lead to better performance with respect to all three indicators of energy efficiency analysed. This study contributes to understanding how more innovative firms can be more energy efficient, providing interesting highlights for managers and policymakers.