The IUP Journal of Knowledge Management
Sustainability and Innovation: Keys to Competitiveness

Article Details
Pub. Date : Oct, 2022
Product Name : The IUP Journal of Knowledge Management
Product Type : Article
Product Code : IJKM041022
Author Name :Magdolna Csath
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 20



We live in an unpredictable, uncertain world, which is full of political, economic, social and ecological pressures. Companies and nations used to compete based on cost optimization by relying on the costeffectively organized global value chains. Recently, this policy has resulted in serious disruptions due to the "just-in-time" management methods, which meant keeping a zero-level inventory. The operations of the global value chains have also cared less about sustainability, like energy intensity in the less developed countries where assembly operations are located. Investments have mainly been focused on tangibles: machineries, buildings and other infrastructures, while neglecting knowledge-related intangibles. This has resulted in lower-than-necessary knowledge capacity building. In the absence of proper knowledge, then tangible investments could not deliver the intended productivity improvements. This paper argues for the necessity of radical change in selecting growth models for businesses and nations alike. Unless there is a shift to applying more human and environmentally-responsible economic policies and business models, serious social and environmental disruptions will happen, which may abruptly put an end to using these cost optimizing business models. The post-pandemic problems and the ongoing war in Ukraine have sent shock waves through nations and businesses not only in Europe, but also in the United States and Asia. Though these shocks cause threats, they also create opportunities for intelligent and timely changes.


In the drive for growth, very little attention has been paid to the consequences: the increased energy and material consumption and health effects of three shifts on employees. The key objective has been improving profitability and competitiveness through growth. Though many studies have long warned about the dangerous consequences of this practice, policymakers have turned a deaf ear to it. Further, the Covid-19 pandemic has caused heavy human and business disruptions. Survival has become the key objective and not growth. The consequences of the pandemic were yet to disappear when a war broke out in Europe. Beyond that, tensions have emerged all over the world including Asia. All these problems put together create tremendous insecurity and uncertainty about what to do, where to invest, what types of activities to encourage or discourage. One thing is certain: there will be no return to the cost competitiveness world. New growth models are needed based on innovation and sustainability. Energy and material productivity enhancement, financial efficiency improvement, strict requirement for return on investment, all these supported by