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Article

The Role of Demographic Changes and Digitalization in Eco-Innovations and Their Effects on the Growth of Companies

by
Jasna Auer Antončič
1,*,
Jana Hojnik
1,
Mitja Ruzzier
1,
Maja Konečnik Ruzzier
2 and
Brandon Soltwisch
3
1
Faculty of Management, University of Primorska, Izolska vrata 2, SI-6000 Koper, Slovenia
2
School of Economics and Business, University of Ljubljana, Kardeljeva pl. 17, SI-1000 Ljubljana, Slovenia
3
Freeman School of Business, Tulane University, 7 McAlister Dr, New Orleans, LA 70118, USA
*
Author to whom correspondence should be addressed.
Sustainability 2024, 16(14), 6203; https://doi.org/10.3390/su16146203
Submission received: 22 June 2024 / Revised: 16 July 2024 / Accepted: 17 July 2024 / Published: 20 July 2024
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Abstract

:
This research explores the role of demographic changes and digitalization in fostering eco-innovations and their subsequent effects on company growth. Employing a quantitative approach, the study investigates how shifts in demographics and the adoption of digital technologies influence eco-innovative practices across companies. The findings reveal that demographic changes are driving the adoption of various eco-innovations, which indirectly contributes to company growth. Additionally, digitalization shows a significant positive relationship with organizational eco-innovations, but its impact on product and process innovations is less pronounced. These results underscore the importance of both demographic factors and strategic digitalization in promoting eco-innovations that yield environmental and economic benefits. This research addresses a crucial gap in the existing literature by uncovering how demographic and digital changes influence eco-innovation and growth, specifically within the context of Slovenian enterprises.

1. Introduction

Companies are central to the increase in carbon emissions due to their substantial energy consumption in the production of goods and services [1]. Recognizing this impact, Hankammer et al. [2] highlight that companies now face growing expectations from consumers and governments alike to act as responsible stewards of resources. Concurrently, shifts in demographics along with an expansion of the middle class are reshaping global consumption patterns [3]. The dominant linear growth models, epitomized by a take–make–dispose cycle, intensify resource demands alongside rising consumption levels [4], forecasting increased prices and a precarious supply of finite resources. In response, businesses are compelled to address the dual challenge of reducing resource consumption while meeting the demands of an expanding consumer base. Digitalization presents itself as a potential facilitator in addressing these demographic shifts and escalating needs.
The rise of the digital economy, driven by widespread internet access, has transformed not only business operations and daily life but also offers solutions to resource challenges [5]. This makeover impacts not only natural resources and technologies but also influences the complex trajectories of societies, firms, and individuals. Businesses, therefore, must strategically navigate the intersections of environmental responsibility, demographic changes, and the digital economy’s transformative impact. Digital economy methods open up fresh opportunities for sustainable development in enterprises [6].
Eco-innovation goes beyond merely introducing new concepts in the ecological or environmental sectors. It encompasses enhancing existing products, processes, services, technologies, organizations, and marketing strategies. The goal is to utilize natural resources and materials more efficiently and in less harmful ways. This leads to diminished negative environmental impacts and, ideally, benefits the environment by reducing the detrimental effects released into it [7]. Literature on the relationship between digital transformation and green innovation is notably scarce [8]. Despite a substantial increase in understanding eco-innovation, Bitencourt et al. [9] have identified inconsistencies within the literature, noting both neutral [10] and positive correlations [11,12] between eco-innovation and company performance, alongside non-supportive findings regarding company growth [7]. Passaro et al. [13] conducted a comprehensive review of eco-innovation drivers in small and medium-sized enterprises yet failed to account for demographic changes and digitalization as significant factors, thus highlighting a research gap and opportunity for further exploration of these drivers in eco-innovations.
This study aims to explore the role of demographic changes and digitalization in eco-innovations and their effects on company growth. Given the scant prior research incorporating and testing the impact of digitalization and demographic changes on eco-innovations and the circular economy—except for the qualitative studies by Hojnik et al. [14] and Auer Antončič and Antončič [15], which did not explicitly include growth performance variables—this study is of high scientific relevance. Researchers such as Antikainen et al. [16], Mura et al. [17], and Petit-Boix and Leipold [18] have underscored the significance of digitalization and demographic shifts in environmental economics, yet research remains sparse. By addressing these gaps, our study contributes to the development and reinforcement of environmental economics as a field critical to achieving sustainable objectives globally.
The principal research objectives of this investigation are to understand the impacts of digitalization and demographic changes on eco-innovations and/or the circular economy through a quantitative, survey-based approach. The research questions designed to address the identified gap are as follows:
  • How do demographic changes influence companies’ adoption of various eco-innovation and/or circular economy practices, considering shifts in demographic structure and immigration influx?
  • What role does digitalization play in companies’ adoption of different eco-innovation and/or circular economy types, and what are its effects?
  • Do demographic changes, digitalization, and eco-innovations collectively influence company growth?

2. Eco-Innovations

This study concentrates on eco-innovation, a subset of all innovations within an economy that significantly emphasizes eco-innovation [7,15,19]. As detailed by Hojnik [20] (p. 111), eco-innovation encompasses the creation, utilization, or exploitation of novel products, services, production processes, organizational structures, or business methods aimed at reducing environmental risks, pollution, and the adverse effects of resource use (including energy), compared to existing alternatives (Measuring Eco-innovation project) [21] (p. 7). These innovations, which inherently focus on environmental benefits, encourage businesses to recognize their potential for gaining competitive advantages, exploring new markets, and improving overall performance (Eco-innovation Observatory) [22].
The adoption of eco-innovations offers mutual benefits to both the environment and businesses, thereby fostering a sustainable coexistence [20] (p. 111). A critical aspect of eco-innovations is the double externality problem, extensively analyzed in studies like Rennings et al. [23,24]. The first positive externality involves knowledge spillovers, where the value created by eco-innovation extends beyond the investing company to benefit the broader economy. This necessitates various incentives, including public funding and subsidies, to mitigate these effects. The second externality pertains to the environmental benefits that reduce the adverse impacts of business operations on the environment, although at a cost to the innovating company. To address these externalities, the implementation of environmental policy tools such as taxes, regulations, and incentives is essential, allowing eco-innovative companies to maintain competitiveness without detrimental environmental impacts.
Eco-innovation manifests in several forms [7]: product, process, technological, system, social, marketing, and organizational innovations. The successful implementation of these innovations offers numerous benefits, including cost savings, enhanced corporate image, improved community relations, access to green markets, and increased competitive edge [25].
A quantitative analysis by Hojnik et al. [26] revealed that competitive pressure drives eco-innovation across product, process, and organizational categories. Each type is stimulated by unique factors: managerial environmental concern, competitive intensity, and competitive pressure for process innovations; customer demand and competitive pressure for product innovations; and competitive pressure alone for organizational innovations.

3. Demographic Changes

The intricate interplay between demographic changes, digitalization, eco-innovations, and the circular economy was the focus of a study by Hojnik et al. [14], which examines ten Slovenian companies. While the study primarily addresses the multifaceted impacts of digitalization, demographic shifts emerge as a significant constituent affecting the adoption of sustainable business practices. These changes are foundational in shaping companies’ strategies towards circular economy practices, aligning with broader research on demographic impacts on economic and social structures [27,28,29]. The importance of understanding these demographic dynamics, particularly regarding workforce composition and consumer behavior, is crucial for devising effective eco-innovation and circular economy strategies [30].
Several studies affirm the transformative role of demographic changes in industries and societal structures, underscoring their significance as catalysts for sustainable practices [27]. In the circular economy context, demographic considerations are critical in shaping consumption patterns and stimulating demand for eco-innovations [31,32]. Thus, the study emphasizes the need for businesses to strategically navigate these demographic shifts to align with evolving societal values and preferences in pursuing sustainable and circular business models. We propose:
H1. 
Demographic changes are positively related to eco-innovations (1a: product eco-innovations, 1b: process eco-innovations, 1c: organizational eco-innovations).

4. Digitalization

Digitalization in the business realm involves enhancing and restructuring business models, processes, and activities through the implementation of digital technologies, encompassing the broader use and application of digitized data transformed into actionable intelligence [33]. Key technologies driving this digital transformation include blockchain, artificial intelligence, cloud computing, big data analytics, next-generation wireless networks (5G and beyond), the Internet of Things (IoT), and increased computing power, as identified by the OECD [34] (in [33], p. 88).
The onset of digitalization has led to the datafication of society, enhancing wealth creation, data access, integration, and accessibility [35,36]. The primary consequence of digitalization is the optimization of processes and more effective management, signifying profound changes in business models and work process structuring [33].
A 2023 study by Hojnik et al. [14] explored the impact of demographic changes and digitalization on eco-innovations and the circular economy based on semi-structured interviews with Slovenian companies. The findings indicated that all analyzed companies had integrated circular economy practices, including the digitalization of production, development of sustainable materials, utilization of green technologies, closed resource loops (e.g., materials and water), product rental with remote monitoring, recycling, and material reuse, as well as harnessing excess heat in technological processes and open-circle recycling. The companies emphasized the crucial role of digitalization in shaping the future of the circular economy, highlighting the importance of automation, robotization, and the use of advanced digital tools in their business processes as part of their digital transformation. Digitalization was noted to replace low-productivity jobs with higher productivity roles, enhancing energy efficiency and resource management, thereby increasing the transparency, control, and manageability of technological processes, which in turn reduces energy consumption and environmental impact.
Ecopreneurial endeavors involving the transformation of business models are facilitated through the adoption of new sales channels, online stores, and digital marketing strategies [37,38,39]. The integration of digitalization not only enhances communication with existing and potential customers but also serves as a catalyst for ecopreneurship, expediting the development of innovative circular business models [40,41]. Furthermore, digitalization impacts eco-innovations by presenting opportunities for novel environmentally sustainable initiatives [23,42,43]. The dynamic interplay between ecopreneurship, digitalization, and circular business models is intricately linked, providing a pathway for sustainable business practices and innovation [40,41].
Auer Antončič and Antončič [15] discovered, through a case study of a Slovenian company, that transforming the business model in ecopreneurial activities is attainable by adopting novel sales channels, online stores, and digital marketing strategies. The study highlighted that digitalization not only enhances communication with current and prospective customers but also serves as a catalyst for ecopreneurship, expediting the development of innovative circular business models. In a study involving a sample of manufacturing companies in China, Xu et al. [44] found that both digital strategy and digital capability have a significant positive impact on eco-process, eco-product, and eco-management innovations. Additionally, these forms of eco-innovations were identified as contributors to enhanced sustainable performance. The study also revealed that eco-innovation plays a partial mediating role in the positive association between digital transformation and sustainable performance, underscoring the substantial influence of digitalization on eco-innovations and its potential to drive advancements in sustainable initiatives. We suggest:
H2. 
Digitalization is positively related to eco-innovations (2a: product eco-innovations, 2b: process eco-innovations, 2c: organizational eco-innovations).
Eco-innovation transcends merely introducing novelties within the eco/environmental sector, involving the enhancement of marketing strategies, organizations, technologies, services, processes, and existing products. The core objective is to promote greater efficiency and reduce the use of harmful natural resources and materials. This proactive approach is designed to minimize adverse environmental impacts, ideally yielding benefits to the environment or, at a minimum, mitigating negative effects [7]. Adopting eco-innovations not only secures competitive benefits but also contributes to the overall performance of companies, as highlighted by Sharma and Vredenburg [45]. The successful implementation of eco-innovations unlocks various advantages for companies, including cost savings, enhanced corporate image, improved community relations, access to new environmentally friendly markets, and a superior competitive advantage [25]. Sarkar [46] elaborates further, distinguishing between direct and indirect benefits. Direct benefits include operational advantages such as cost savings, increased resource productivity, and enhanced logistics, including gains from commercialization. Indirect benefits encompass improvements in corporate image, stakeholder relationships, health and safety, employee satisfaction, and an enhanced capability for innovation driven by knowledge holders. Chen et al. [47] emphasized that investment in eco-innovation boosts a company’s competitive edge.
Product eco-innovations: Wong [48] underscored the positive association between product and process eco-innovation and a company’s competitive advantage, with product eco-innovation exerting a more substantial influence than process eco-innovation.
Process eco-innovations: Ghisetti and Rennings [49] discovered that process eco-innovations enhancing a company’s resource efficiency—specifically in terms of material or energy use per unit of output—not only boost profitability but also heighten the firm’s competitiveness.
Organizational eco-innovations: Organizational innovation promotes green innovation [50]. Organizational green culture can be important for competitive advantage and green performance [51].
The implementation of green products, processes, and managerial innovations results in cost savings, improved product quality, and heightened efficiency and productivity, which in turn enhance competitive advantage [52]. Globally, numerous companies have successfully transitioned their operations to become more eco-efficient, thereby gaining an edge over their competitors [53].
In summary, companies are increasingly aware that improving resource productivity not only strengthens their competitiveness in the short- and long-term but also opens up new market opportunities. Eco-innovations result in positive outcomes such as competitive advantages, impacts on sales, market share, new opportunities, and satisfaction among employees, customers, and business partners [7]. We propose:
H3. 
Dimensions of eco-innovations (3a: product eco-innovations, 3b: process eco-innovations, 3c: organizational eco-innovations) are positively related to the consequences of eco-innovations.

5. Eco-Innovation as a Pathway to Business Opportunities

Eco-innovations are recognized as pathways to new business opportunities, offering avenues for growth and a competitive edge [54,55]. From an environmental perspective, eco-innovations reduce a company’s environmental impact, and from an economic standpoint, adopting eco-friendly practices is advantageous, leading to competitive gains, economic benefits, and a heightened extent of internationalization [7]. The essence of eco-innovation lies in its potential to establish a win–win scenario, benefiting both the environment and the company [56]. Eco-innovation not only promotes sustainable economic growth but also aligns firms with the 2030 Sustainable Development Goals and improves their competitive position in the market [57]. Understanding the benefits achievable through the implementation of eco-innovation is crucial for companies, making the broader adoption of these practices a pivotal strategy for gaining a competitive gain, expanding into markets in foreign countries, and enhancing long-term company performance [7].
Cheng and Shiu [58] demonstrated that eco-product innovation has the strongest impact on business performance. They also illustrated that eco-organizational, eco-process, and eco-product innovations exert direct effects on business performance. However, Hojnik [7] did not find a significant relationship between eco-innovations and growth, suggesting that it might be the consequences of eco-innovations, rather than the innovations themselves, that are directly related to business growth. We suggest:
H4. 
The consequences of eco-innovations are positively related to the growth of the company.

6. Materials and Methods

A questionnaire was developed and comprised two sections; the first section included questions that measured the constructs used in this study, while the second part collected demographic data from companies. The survey questions on demographic changes and digitalization were developed based on the findings from qualitative research and a literature review, given the limited quantitative research on this topic to date. Demographic changes were measured with four items on changes in the age structure and three items on changes due to the inflow of migrants. These items were developed based on interview data from ten Slovenian companies. Digitalization was measured using 12 questions adapted from SURS [59] and Bradač Hojnik et al. [33], and 10 questions adapted from Bickauske et al. [60].
The survey questions on dimensions of eco-innovations, consequences of eco-innovations, and company growth were primarily adapted from measures used in past research. Eco-innovations were measured in terms of dimensions of eco-innovations, with the most important items in terms of factor loadings adapted from Hojnik [7]: four items on product eco-innovations [47,52,61], five items on process eco-innovations [47,52,61], and six items on organizational eco-innovations [58]. Five-point scales were used, ranging from 1 (do not agree at all) to 5 (completely agree). Ten items on consequences of eco-innovations were adapted from Hojnik [7], four on competitive benefits were adapted from Sharma and Vredenburg [45], and four on economic benefits were adapted from Wagner [62], plus two items on economic benefits from customer satisfaction and satisfaction of business partners/suppliers, and one item on consequences developed based on interviews (the effects of the introduction of eco-innovations and circular economy practices were positive for our company). The dependent variable—growth of the company—was measured using three items from past research [63,64,65,66]. Control variables included at the company level were age, industry (sector and product/service B2C or B2B), and size (number of employees, total revenues).
Data collection was conducted using a CATI-based interviewing survey in Slovenia from 26 June to 4 July 2023, performed by Ninamedia research agency. Respondents were CEOs, business owners, or experts dealing with innovation or energy management. The firms in the sample were chosen from the most recent Ajpes database (the Slovenian national agency), which includes all businesses in Slovenia. The selection process involved three steps. First, since many Slovenian firms are dormant or have few employees, micro firms were excluded, leaving only SMEs (in accordance with EU norms) with 10–250 employees. In the second step, companies from specific industries deemed irrelevant to our research were excluded (including Agriculture, Forestry, Fishing, Mining, Activities of Extraterritorial Organizations and Bodies, Human Health and Social Work Activities, Compulsory Social Security, Other Service Activities, Activities of Households as Employers, Undifferentiated Goods- and Services-producing Activities of Households for Own Use, and Public Administration and Defense). Finally, from the remaining population of 1450 companies, we randomly selected companies, aiming for approximately 75% from manufacturing industries and 25% from other industries. After collecting 15 responses, the questionnaire was pre-tested and suggested some minor changes in the wording of certain items.
Data collection yielded 132 usable responses, with 97 from manufacturing industries and 35 from other industries, representing approximately 10% of the population, being statistically representative. The standard deviation (standard error of the sample) was 7.5%, which means that we can confirm the validity of the results with a 92.5% probability. The sample structure is depicted in Table 1. Most companies in the sample were small (from 10 to 50 employees, 62.9%) and medium-sized (from 50 to 249 employees, 30.3%), with fewer large companies (250 employees and more, 6.8%). Most companies had total revenues over EUR 1,600,000–20,000,000 (61.3%), followed by companies with EUR 1,600,000 or less of total revenues (29.5%) and companies with over EUR 20,000,000 total revenues (9.1%). The largest proportion of companies had existed for 21–50 years (47.7%), followed by companies that were over 50 years old (27.3%), companies 11–20 years old (20.5%), and companies 2–10 years old (4.6%). Companies varied by industry, with products/services being business-to-business (B2B, 50.8%) and business-to-customer (B2C, 49.2%) across different industries (production of industrial goods, 41.7%; construction, 21.2%; production of consumer goods, 17.4%; consumer services, 4.5%; trade, 3%; and others).
Common method bias was evaluated using Harman’s one-factor test [67], and the results did not indicate its presence. The total variance explained by a single factor was 30.17%, well below the 50% threshold suggested by Podsakoff and Organ [68].
Constructs were analyzed using exploratory factor analysis (EFA) in StatPlus v8 and confirmatory factor analysis (CFA) in EQS 6.1. All commonalities in EFA were above the 0.2 threshold, so no item was excluded. EFA and CFA indicated two factors of demographic change, both with good internal consistency and reliability (demographic changes in age structure, four items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.98, RMSEA 0.09, CFI 0.99, reliability: Cronbach alpha 0.84, RHO 0.84; demographic changes due to the inflow of migrants, three items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 1.00, RMSEA 0.00, CFI 1.00, reliability: Cronbach alpha 0.93, RHO 0.93). EFA and CFA revealed two factors of digitalization, both with acceptable internal consistency and reliability (basic digitalization, four items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.99, RMSEA 0.00, CFI 1.00, reliability: Cronbach alpha 0.56, RHO 0.56; advanced digitalization, 18 items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.98, RMSEA 0.06, CFI 0.98, reliability: Cronbach alpha 0.94, RHO 0.94). EFA and CFA showed three dimensions of eco-innovations, all with acceptable internal consistency and reliability (product eco-innovations, four items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.98, RMSEA 0.00, CFI 1.00, reliability: Cronbach alpha 0.67, RHO 0.67; process eco-innovations, five items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.98, RMSEA 0.00, CFI 1.00, reliability: Cronbach alpha 0.72, RHO 0.72; organizational eco-innovations, six items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.98, RMSEA 0.03, CFI 1.00, reliability: Cronbach alpha 0.92, RHO 0.92). Consequences of eco-innovations indicated acceptable internal consistency and reliability (11 items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.86, RMSEA 0.20, CFI 0.88, reliability: Cronbach alpha 0.94, RHO 0.94). Growth showed acceptable internal consistency and reliability (three items, internal consistency: substantial and statistically significant coefficients, model fit indices NFI 0.89, RMSEA 0.22, CFI 0.90, reliability: Cronbach alpha 0.70, RHO 0.78).
Robustness tests were done in SPSS 29.0. Individual variables indicated some departures from normality in terms of distributions’ skewness and kurtosis and these were significantly reduced when composite items were developed. Some departures from normality were detected: skewness (demographic changes due to the inflow of migrants) and kurtosis (product eco-innovations, organizational eco-innovations, consequences of eco-innovations, demographic changes in age structure, and advanced digitalization); therefore, structural equation modeling was employed because it is a nonparametric approach that does not necessitate data to be normally distributed [69]. VIF statistics were well below 10, so multicollinearity was not detected. Demographic elements and digitalization may not be related, as shown in past research [70], which found that demographic factors such as gender, age, and education level do not have a significant impact on the adoption of digitalization in sales strategies. Plots of standardized residuals by standardized predicted values did not show identifiable patterns, so departures from homoscedasticity were not detected.
Hypotheses were tested in a structural equation model in EQS. Due to the moderate sample size, dimensions of demographic changes, dimensions of digitalization, dimensions of eco-innovations, and consequences of eco-innovations were transformed into variables (means of corresponding items were calculated). In the model, demographic changes, digitalization, and growth were included as first-order factors, and dimensions and consequences of eco-innovations were modeled as variables. In addition, control variables (company age, industry B2C or B2B, and size (number of employees, total revenues) were included as independent variables in the model.

7. Results

A structural model was estimated using the collected data and demonstrated an acceptable model fit (NFI 1.00, RMSEA 0.11, CFI 1.00). The standardized coefficients from the structural equations model are shown in Table 2.
H1 predicted that demographic changes would be positively related to eco-innovations. The coefficients were positive and significant at the 0.05 level, supporting H1 (standardized coefficients: H1a, product eco-innovations 0.63; H1b, process eco-innovations 0.72; H1c, organizational eco-innovations 0.75). Therefore, an increase in demographic changes of one standard deviation would increase product eco-innovation by 0.63 standard deviations, process eco-innovations by 0.72 standard deviations, and organizational eco-innovations by 0.75 standard deviations.
H2 suggested that digitalization would be positively related to eco-innovations. Of the three coefficients, only the one for organizational eco-innovations was positive and significant at the 0.05 level, while the other two were positive but not significant. These results provide partial support for H2 (standardized coefficients: H2a, product eco-innovations 0.05; H2b, process eco-innovations 0.09; H2c, organizational eco-innovations 0.29). Therefore, an increase in digitalization of one standard deviation would increase organizational eco-innovations by 0.29 standard deviations. Together, demographic changes and digitalization explained 40.4% of the variance in product eco-innovations, 52.9% in process innovations, and 65.5% in organizational eco-innovations.
H3 proposed that dimensions of eco-innovations would be positively related to the consequences of eco-innovations. Two of the three coefficients (organizational and process eco-innovations) were positive and significant at the 0.05 level, while one was positive but not significant. These results partially support H3 (standardized coefficients: H3a, product eco-innovations 0.06; H3b, process eco-innovations 0.21; H3c, organizational eco-innovations 0.46). Therefore, an increase in process eco-innovations of one standard deviation would increase the consequences of eco-innovations by 0.21 standard deviations, and an increase in organizational eco-innovations of one standard deviation would increase the consequences of eco-innovations by 0.46 standard deviations. The three dimensions of eco-innovations explained 40.7% of the variance in the consequences of eco-innovations.
H4 proposed that the consequences of eco-innovations would be positively related to the growth of the company. The coefficient was positive and significant at the 0.05 level, supporting H4 (standardized coefficient 0.38). Therefore, an increase in the consequences of eco-innovations of one standard deviation would increase the growth of the company by 0.38 standard deviations. The consequences of eco-innovations accounted for 14.2% of the variance in company growth.
Some positive and significant indirect effects were detected in the model. Demographic changes (standardized coefficient 0.53) and digitalization (standardized coefficient 0.16) had indirect effects on the consequences of eco-innovations through the dimensions of eco-innovations. Demographic changes (standardized coefficient 0.20) and digitalization (standardized coefficient 0.06) had indirect effects on the company growth through the dimensions and consequences of eco-innovations. Organizational eco-innovations (standardized coefficient 0.17) had indirect effects on company growth through the consequences of eco-innovations.
The structural model was tested also by including control variables (the model is depicted in Figure 1). The results of modeling with control variables showed some significant coefficients. Two effects were significant (standardized coefficients: the age of the company −0.30, the size of the company in terms of total revenues 0.33) and two impacts of control variables were not significant (standardized coefficients: industry B2C/B2B 0.10, the company size in terms of the number of employees −0.13). In addition, the introduction of the control variables in the model increased variance explained in growth to 37.8%.

8. Discussion

Demographic shifts, including changes in age structure and the influx of migrants, have been identified as significant drivers of all types of eco-innovations—product, process, and organizational. Moreover, our findings reveal that demographic changes may indirectly influence the outcomes of eco-innovations positively. These results build upon the qualitative research by Hojnik et al. [14] and Auer Antončič and Antončič [15], uncovering positive correlations between demographic shifts and eco-innovations, as well as suggesting an indirect positive impact on company growth.
Digitalization, encompassing both basic and advanced forms, was predictive primarily of organizational eco-innovations but showed no significant correlation with product or process eco-innovations. This partially supports and contradicts the qualitative findings from Hojnik et al. [14] and Auer Antončič and Antončič [15], which emphasized digitalization’s broad relevance to various eco-innovation types. Our study specifically corroborates the influence of digitalization on organizational eco-innovations but does not support its relation to product and process innovations, indicating a nuanced role of digitalization across different eco-innovation domains. Furthermore, we found that digitalization might indirectly benefit the outcomes of eco-innovations and company growth, aligning with Xu et al. [44], who noted a mediating role of eco-innovations between digital transformation and sustainable performance.
Regarding eco-innovations themselves, our research indicates that process and organizational innovations are linked to the consequences of eco-innovations. This aligns with Hojnik [7], who found significant relationships between the eco-innovation construct and its competitive and economic benefits, with the notable exception that we did not find a significant link between product eco-innovation and its outcomes. Thus, our results suggest that different dimensions of eco-innovations may influence their consequences variably.
We also confirmed that the consequences of eco-innovations positively affect company growth and found that organizational eco-innovations indirectly influence growth through their consequences. These findings enhance the body of research initiated by Hojnik [7], where a direct relationship between eco-innovation and company growth was not established.

9. Implications, Limitations, Future Research Directions, and Conclusions

Theoretically and empirically, this study advances eco-innovation research by developing and testing a new model that includes demographic changes, digitalization, eco-innovations, and growth. Confirming demographic changes and digitalization as crucial elements in modeling eco-innovations and their consequences, this research enriches our understanding of ecopreneurship and its overlap with intrapreneurship, thereby contributing to the broader discourse on company growth within these contexts.
Methodologically, our study introduces two innovative measures:
  • A demographic change measure that incorporates changes in age structure and migration inflows.
  • A digitalization measure differentiated into basic and advanced digitalization.
Practically, the findings suggest that companies can bolster their market competitiveness by adopting eco-innovations influenced positively by demographic changes. The results indicate that younger demographics are particularly receptive to eco-innovations, which could guide targeted marketing and product development strategies.
Additionally, our study highlights the critical role of digitalization in adopting eco-innovations, especially at the organizational level, suggesting that even limited digital advancements can positively impact eco-innovation adoption. For more effective adoption of digitalization in eco-innovation, companies must tackle organizational barriers. These include overcoming challenges within organizational culture, leadership, change management, and resistance to change [71]. Strategically managing demographic changes and digitalization can boost organizational eco-innovation and growth by aligning various systems to handle eco-innovation. This includes gathering and sharing eco-innovation trend data, actively participating in eco-innovation activities, communicating such information to employees, investing in related R&D, and facilitating interdepartmental communication, all tailored to meet evolving population needs and preferences, thereby enhancing market responsiveness and sustainability initiatives. Additionally, leveraging digital tools to analyze demographic data can help businesses anticipate environmental impacts and innovate accordingly, driving eco-friendly solutions and economic growth.
The impact of eco-innovations on company growth is predominantly indirect, mediated through enhanced competitiveness. Therefore, investing in eco-innovations that demonstrably improve competitive metrics is crucial for businesses aiming for sustainable growth.
However, the study’s limitations include its focus on the Slovenian context, which may restrict the generalizability of our findings due to Slovenia’s unique socio-economic and regulatory characteristics within the European Union framework. These specificities could influence eco-innovation practices differently compared to other regions.
Future research should explore the mechanisms underlying the relationship between eco-innovations and organizational competitiveness more deeply, considering factors like stakeholder engagement and market positioning. Stakeholder engagement in the management of the company [72] can be examined by considering different dimensions of eco-innovations. The role of market positioning in terms of eco-market orientation and activities [73] can be examined as a moderator of the relationships between eco-innovations and company performance. Longitudinal studies would also be valuable for observing the evolution and long-term effects of eco-innovation practices on firm performance.
In conclusion, while this study sheds light on the influence of demographic changes and digitalization on eco-innovations within a Slovenian context, it opens several avenues for further investigation to elucidate the broader implications of eco-innovation adoption across various global settings.

Author Contributions

Conceptualization, J.A.A. and J.H.; methodology, J.A.A.; formal analysis, J.A.A.; data curation, J.A.A., M.R. and M.K.R.; writing—original draft preparation, J.A.A.; writing—review and editing, J.A.A., J.H., M.R., M.K.R. and B.S.; visualization, J.A.A.; funding acquisition, J.H. All authors have read and agreed to the published version of the manuscript.

Funding

This work was supported by the Slovenian Research and Innovation Agency (grant numbers J5-3106 and P5-0049).

Institutional Review Board Statement

Ethical review and approval was not required for this study due to the use of anonymized participant data.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

The questionnaire items and the summarized data are available from the authors upon request.

Conflicts of Interest

The authors declare no conflicts of interest.

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Sustainability 16 06203 g001
Figure 1. The structural equation model with control variables (with standardized coefficients). Legend: Dem—demographic changes, DeAge—demographic changes in age structure, DeMig—demographic changes due to the inflow of migrants, Dig—digitalization, DiBas—basic digitalization, DiAdv—advanced digitalization, EIProd—product eco-innovations, EIProc—process eco-innovations, EIOrg—organizational eco-innovations, EICon—the consequences of eco-innovations, Gr—company growth, GrEmp—growth in the number of employees, GrSal—growth in sales, GrMS—growth in the market share, IndB2—industry B2B/B2C, Age—company age, SizeEmp—company size in terms of the number of employees, SizeTR—company size in terms of the total revenues, E, D—errors, *—estimated parameters.
Figure 1. The structural equation model with control variables (with standardized coefficients). Legend: Dem—demographic changes, DeAge—demographic changes in age structure, DeMig—demographic changes due to the inflow of migrants, Dig—digitalization, DiBas—basic digitalization, DiAdv—advanced digitalization, EIProd—product eco-innovations, EIProc—process eco-innovations, EIOrg—organizational eco-innovations, EICon—the consequences of eco-innovations, Gr—company growth, GrEmp—growth in the number of employees, GrSal—growth in sales, GrMS—growth in the market share, IndB2—industry B2B/B2C, Age—company age, SizeEmp—company size in terms of the number of employees, SizeTR—company size in terms of the total revenues, E, D—errors, *—estimated parameters.
Sustainability 16 06203 g001
Table 1. The sample structure (companies).
Table 1. The sample structure (companies).
DescriptorFrequencyPercentage
Age in years
2–532.3
6–1032.3
11–202720.5
21–506347.7
Over 503627.3
Size in No. of Employees
49 or less8362.9
50–992115.9
100–2491914.4
250 or more96.8
Size in Yearly Revenue
EUR 400,000 or less64.5
Over EUR 400,000–800,000129.1
Over EUR 800,000–1,600,0002115.9
Over EUR 1,600,000–4,000,0003728.0
Over EUR 4,000,000–20,000,0004433.3
Over EUR 20,000,000129.1
Total132100.0
Table 2. The structural equation model results.
Table 2. The structural equation model results.
Predictor VariableDependent Variable (R-Squared)
Standardized Coefficients
Product eco-innovations (0.404)
Demographic changes0.63 *
Digitalization0.05
Process eco-innovations (0.529)
Demographic changes0.72 *
Digitalization0.09
Organizational eco-innovations (0.655)
Demographic changes0.75 *
Digitalization0.29 *
Consequences of eco-innovations (0.407)
Product eco-innovations0.06
Process eco-innovations0.21 *
Organizational eco-innovations0.46 *
Growth (0.142)
Consequences of eco-innovations0.38 *
* Significant at the 0.05 level.
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Antončič, J.A.; Hojnik, J.; Ruzzier, M.; Ruzzier, M.K.; Soltwisch, B. The Role of Demographic Changes and Digitalization in Eco-Innovations and Their Effects on the Growth of Companies. Sustainability 2024, 16, 6203. https://doi.org/10.3390/su16146203

AMA Style

Antončič JA, Hojnik J, Ruzzier M, Ruzzier MK, Soltwisch B. The Role of Demographic Changes and Digitalization in Eco-Innovations and Their Effects on the Growth of Companies. Sustainability. 2024; 16(14):6203. https://doi.org/10.3390/su16146203

Chicago/Turabian Style

Antončič, Jasna Auer, Jana Hojnik, Mitja Ruzzier, Maja Konečnik Ruzzier, and Brandon Soltwisch. 2024. "The Role of Demographic Changes and Digitalization in Eco-Innovations and Their Effects on the Growth of Companies" Sustainability 16, no. 14: 6203. https://doi.org/10.3390/su16146203

APA Style

Antončič, J. A., Hojnik, J., Ruzzier, M., Ruzzier, M. K., & Soltwisch, B. (2024). The Role of Demographic Changes and Digitalization in Eco-Innovations and Their Effects on the Growth of Companies. Sustainability, 16(14), 6203. https://doi.org/10.3390/su16146203

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