Shaping Sustainable Business through Living Labs

In the last decade, the number of living labs focusing on environmental sustainability has risen in order to cope with the need for environmentally sustainable innovation. Although these multi-actor approaches allow for innovation, this alone does not suffice a society’s transition to becoming environmentally sustainable. Organizations should focus on innovation internally as well, but in practice, this lacks often because environmentally sustainable values are not integrated into the organizational policy. Living labs could influence the organization’s policy regarding environmental sustainability. Qualitative findings based on eight interviews, observations, and additional relevant documents from a living lab gave insights into this process. Overall, this study found that organizations take part in living labs for several reasons. First, firms wish to stabilize their business model in the long-term and lower risk on future claims. Second, the living lab’s aim for collaboration in order to implement environmentally sustainable approaches in the supply chain attracts firms. Finally, firms expect to gain business and market demand in the living labs. Additionally, the embeddedness and proximity of firms in the living lab makes participating in the living lab more attractive when firms consider joining a living lab based on the previously mentioned reasons. Once participating in the living lab, team dynamics, and knowledge sharing practices change firm representatives’ perceptions regarding their attitudes towards environmental sustainability and the feasibility to implement environmentally sustainable practices. This change in perception is translated to the firm of the participant, where firms’ policies are adjusted. Based on this research, implications for organizations, governmental policymakers, and living lab facilitators are provided as well as suggestions for future research.