Recommendations for the development of a competitive advantage based on RRI

Recommendations for the development of a competitive advantage based on RRI

on July 10, 2020

The main purpose of this research is to explore and define the relationship between RRI and competitive advantage in different settings. RRI frameworks have traditionally been less oriented towards their application in competitive environments; hence they have been difficult to apply by actors who need to develop a competitive edge (such as industry players) or by policy-makers in socio-economic development. Hence, we aim to find out what are the main drivers and barriers, how RRI and competitive advantage play out in different environments, and to provide recommendations for different stakeholders to successfully build a competitive advantage based on RRI.

This study makes a significant contribution to existing research on RRI-like practices and competitive advantage and adds to the literature on business involvement in RRI that has been flourishing despite the tradition of overlooking RRI by actors in competitive environments. Moreover, it provides a set of practical recommendations for industry, policymakers, research performing organizations, research funding organizations, investors, civil society and NGOs and association bodies. These recommendations are oriented towards developing and sustaining a competitive advantage based on RRI-like practices by research and innovation actors, while supported by other stakeholders in the system. The advice is informed by the research study and proposes the need to tailor and adopt bottom-up approaches in the implementation of RRI-practices, integrating RRI-like logics and competitive advantage logics into organizational dynamic, and the need for collaboration among different actors, apart from recommendations particular to each stakeholder.

Industry (both SMEs and large enterprises) has been largely ignored in the Responsible Research and Innovation (RRI) literature; therefore, competitiveness considerations have not been well incorporated into many of the frameworks. Some of the tenets of RRI, such as transparency or mutual responsiveness, pose limitations in a business context because of the need to develop and protect a competitive advantage. The recommendations below aim to provide some guidelines about how to engage in RRI-like practices in a way that nurtures the competitive edge of the company

Qualitative and quantitative analysis of RRI impacts: Recommendations for industry

1.  Be responsive to context

While integrating RRI-like practices into your research and innovation process, it is important to adapt to and understand the contextual factors that are affecting it. This has implications both at the process and outcome levels.

When it comes to procedural dimensions it’s important to understand what are the values and societal concerns underlying the society in order to integrate them and to anticipate any possible issues that may be derived from the interaction of the research and innovation work.

From the outcome perspective, it is important to cater to local societies and to try to understand what that market needs. Outcomes of the #research and innovation processes need to be adapted to the local context in response to local values.

2. Participate in standards development

Carrying out participatory reflective processes in product or service development helps to build a competitive advantage, through the inclusion of diverse perspectives that increase the innovation outcome’s fit in the market.

It was observed that engaging in reflective processes to incorporate socio-ethical values in the #research & innovation process was often costly, in the case of participatory reflective processes that may lengthen the time to market and increase the chances of information leak.

One of the proposed solutions, which was particularly helpful for SMEs, was to engage in reflective processes with other stakeholders, including other businesses, as, in order to fully benefit from standards, it is important to participate in their development. By engaging and implementing these standards, companies might overcome the barriers to developing a competitive advantage that is derived from engaging in participatory reflective processes while benefiting from increased social acceptance and avoidance unanticipated consequences, as revealed in their participatory standard-setting process.

3. Participate in networks

Beyond standard development, which is directly related to the research and innovation work, participating in networks will also indirectly support the development of RRI-like practices. Opening research and innovation work might provide new ideas for product and market development; but besides that, engaging in networks might help to identify stakeholder needs, even if they are not directly involved in a given research and innovation process.

In addition, participation in a network might support the development of a grid of closer collaborators with whom to share sensitive information for more extensive exchange of ideas in research and innovation work

While having a fully open research and innovation process might not be possible in all cases because of the need to protect business secrets and information asymmetries participation in networks provides a good opportunity for two way communication with stakeholders whereby new information about local social values and concerns will be obtained it provides the setting for the company to disseminate and share results of their own research and innovation processes; hence enhancing engagement with the general public.

 

4. Apply both process and outcome approaches:

It is important to provide ethically acceptable, socially desirable and sustainable results, but in order to do so, procedural dimensions focused on mutual responsiveness will aid in the process.

In order to really benefit from open communication and addressing societal needs, it is also important to include stakeholders with opposing views during the research process, in order to fully capture those concerns in the outcomes

In order to address societal problems and to avoid societal concerns, it is necessary to engage in anticipatory, reflective and inclusive processes and be responsive to changes in the research and innovation process they might imply: In order to fully benefit from the direct link between outcome approaches and competitive advantage, process dimensions should not be ignored, but rather built-in in the innovation process early on.

It is important to provide ethically acceptable, socially desirable and sustainable results, but in order to do so, procedural dimensions focused on mutual responsiveness will aid in the process.

5. Do and tell

Reputational effects and obtaining a social license to operate were identified as major drivers of competitive advantage based on RRI-like practices; in fact, customer performance was the dimensions of competitive advantage most directly related to engagement in RRI practices.

However, in order to enjoy such increased performance, it is necessary to communicate with the customers and build a market sustained on brand recognition and reputational effects based on RRI. The efforts made through RRI-like practices may also be communicated through certifications or front-of-pack labels, which also account for customers’ trust.

The efforts made through RRI-like practices may also be communicated through certifications or front-of-pack labels, which also account for customers’ trust. In addition to the development of association bodies to share and promote efforts made at the domain level.

6. Engage and protect

Intellectual property protection was often cited as a barrier to developing a competitive advantage, despite the other side of the coin being increased efficiency of the innovation process and the ability to tap onto new markets. Intellectual property protection may be vital for the development of a competitive advantage, it is relevant to collaborate and engage with the whole spectrum of stakeholders, while protecting intellectual property.
Intellectual property may also be protected formally through the signing of non-disclosure agreements with stakeholders invited to reflect on the research and innovation process.

In this way, competitive advantage based on information asymmetries may be protected while still benefiting from inclusive engagement

7. Embed RRI-like practices into company strategies

In order to fully benefit from the implementation of RRI-practices, they should be built into the organizational strategy. Implementing ‘ornamental’ or merely formal RRI-like practices might mean an additional cost while not realizing the advantage derived from it. Hence, strategic RRI-like practices that are built into the company’s mission and value creation strategies are recommended to develop a competitive advantage.

A clear example of this was observed in the case of gender and diversity considerations. In general, in the survey, companies that engaged in such practices had a slightly lower financial performance. When examined qualitatively through the case studies, it shows that, on the one hand, many companies take an equality approach based on numerical parity, which may sometimes produce difficulties in finding qualified candidates in certain domains or add costs in compensation programmes. On the other hand, companies that had built-in diversity in research and innovation teams, found that they could strategize their work based on the embedded diversity; hence helping them to avoid societal concerns and unanticipated consequences, identify stakeholder needs better, and access new markets.

Summary of results

Five main drivers of competitive advantage through RRI-like practices were identified: avoiding noncompetitive regulation, increasing social acceptance, incorporating stakeholder needs and tapping into new markets, increasing the efficiency of the innovation process, and reputational effects. On the other hand, four barriers were identified: obstacles during the research and innovation process (such as lengthening the time-to-market), protecting intellectual property, lack of consumer awareness, and barriers derived from the institutional environment.

The survey revealed that, while there are some differences in terms of attitudes and engagement in RRI-like practices across regions, both procedural and outcome dimensions were relevant. However, the application of particular practices in exercising such dimensions showed more variations across regions, reflecting adaption to local environments. In relation to competitive advantage, outcome dimensions and open and transparent innovation processes showed a clear relationship with performance, in particular with customer performance. The reason for this might lie in the increased visibility of such practices to the consumer.

Two case studies were carried out focusing on the management of socio-ethical concerns through RRI-like practices and their relationship with a competitive advantage. The case on the bio-economy domain (on GMOs and gene-editing techniques), identified different responses depending on local regulations and the focus placed on the development of competitive advantages at the micro and macro levels, and showcased the importance of domain-specific considerations in RRI-like responses. The ICT case (focused on biometrics and deep learning) highlighted the importance of network approaches and second-order reflexivity, and the need to adapt RRI-like practices to local contexts to maximise their benefits for competitive advantage. Lastly, the analysis of the two cases concentrating on transversal issues (gender equality and diversity) made notable how strategic approaches to RRI and their proper integration in strategy showed an improved relation with competitive advantage.

Read the full report here.