How startups can pursue sustainability and related innovation outcomes through digitalization: Exploring the antecedents of sustainability-oriented innovation capabilities

Today, companies are being called upon to embrace digitalization and address pressing environmental and social challenges. In doing so, they are increasingly integrating sustainability priorities and objectives into their innovation and digital transformation processes. The concept of sustainability-oriented innovation capability (SODC) has recently emerged to describe the ability of organizations to effectively integrate, build, and reconfigure resources to meet sustainability criteria in product design and proactively adopt digital technologies for green operations. Despite the progress in the literature on SODC, knowledge is still limited and further research is needed to improve the understanding of its antecedents. This study sheds some light on this by investigating three classes of factors that capture the different and complementary dimensions of digitalization (integrating knowledge management)—namely, the infrastructural, informational, and analytical: digital platforms capability (DPC), digital knowledge management (DKM), and big data management capability (BDMAC). We propose that these three dimensions influence the SODC of startups, and we identify the ultimate effects of these specific capabilities on their sustainability-oriented innovation outcomes, namely green product innovation performance (GPIP). Given the exploratory nature of this research, a partial-least squares approach to structural equation modeling was adopted. Our findings reveal that, unlike DKM, both DPC and BDAMC play a key role in influencing SODCs which, in turn, enable startups to improve their GPIP. The findings provide insights for founders and managers in their resource allocation strategies and for policymakers to support startups in developing these capabilities.