environmental innovation

manufacturing and service industry

product innovation

process

innovation

Innovation and environmental awareness are crucial issues that actually build a firm’s competitive advantages. In terms of manufacturing industries, several studies have been carried out to disentangle the variables that help companies to orientate more effectively their innovations toward sustainability. In comparison, although the service industry is increasing its economic weight, little research has been carried out in this domain. In the present paper, we analyze the differences of eco-innovative behavior between Service and Manufacturing industries. We retrieved 6,253 firms’ data from the Spanish panel of innovative activities (PITEC database) and deployed a structured equations model (EQS) for each group to compare what variables are influencing the willingness to be eco-innovative for each type of industry. Results show the differences in impact that product orientation has on eco-orientation. The relationship between product-orientation and ecoorientation in service firms is significantly different to that in manufacturing firms. In fact, product-orientation impact is lower in service firms. Thus, while manufacturing firms show a similar impact of product and process orientation on eco-orientation, process-orientation in service firms almost doubled the relative impact of product-orientation on eco-innovation. These results may allow both policy makers and managers to make the correct decisions regarding national, industrial and company strategy.