Sustainable innovations, knowledge and the role of proximity: A systematic literature review

Ulrich Wilke and Andreas Pyka

Journal of Economic Surveys, 2025, vol. 39, issue 1, 326-351

Abstract: Innovations can substantially contribute to the transformation toward sustainability if they induce a positive social and/or environmental impact. Such sustainable innovations differ considerably from conventional, purely economic innovations. The main difference stems from the different knowledge bases necessary for the development of these innovations. These knowledge bases are widely dispersed across different actors from business, academia, government, and civil society. Following the innovation system approach, we look at actor constellations, linkages between actors, and knowledge flows within networks that generate sustainable innovations. For this purpose, we conduct a systematic literature review, focusing on the concept of proximity and its five dimensions (geographical, cognitive, institutional, organizational, and social proximity). The results show that all proximity dimensions, as well as the interdependencies between them, are relevant for analyzing knowledge flows leading to sustainable innovations. The interplay of the different proximity dimensions can be described via two mechanisms, one being reinforcement and the other one being either substitution or overlap. We conclude that for the occurrence of radical, systemic innovations, which have the potential of altering the prevailing socio‐economic paradigm toward greater sustainability, a combination of low cognitive and low (micro‐) institutional proximity combined with high organizational, social, or geographical proximity, appears particularly conducive.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jecsur:v:39:y:2025:i:1:p:326-351

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