Innovation should not only drive economic growth but also support sustainability and inclusivity. This is the key message from Professor Erik Brouwer during his inaugural lecture on January 17. “The future of broad-based prosperity depends on our willingness to collaborate and embrace innovation as a catalyst for change.”
“The past shows that innovation has consistently driven societal and economic progress, but it has also introduced significant challenges,” Brouwer explains. “For example, increased CO2 emissions and the growing plastic waste crisis. By now, we know that the price of a product or service doesn’t reflect its true cost—things like environmental impact or human rights violations aren’t accounted for.” Brouwer emphasizes the importance of sustainable innovations—ideas, processes, or products that strike a better balance between economic growth, environmental protection, and social well-being. “This balance is what we call broad-based prosperity.”
An uneven playing field
“Sustainable innovation not only creates societal value but can also provide businesses with a competitive edge. The problem, however, is that companies operating sustainably often face an uneven playing field; they struggle to compete with those that don’t,” says Brouwer. To support the transition to sustainability, he argues, we need policies that incentivize sustainable innovation. Examples include carbon taxes, subsidies for renewable energy, and regulations that encourage organizations to adopt green technologies.
Brouwer also stresses the importance of making these effects measurable. “Without measurable indicators, it’s difficult to assess the impact of policies or innovations on broad-based prosperity.” His research at Nyenrode will focus on making sustainable innovation both measurable and applicable. “As an econometrician, I thrive on working with data, so this is the perfect challenge for me.”
Understanding performance
In his lecture, Brouwer advocates for integrating and ranking indicators of broad-based prosperity. “Currently, the Dutch Central Bureau of Statistics (CBS) uses as many as 70 different indicators. This allows companies to cherry-pick the ones where they perform well, which distorts the overall picture. By intelligently combining indicators such as CO2 emissions, labor conditions, and energy efficiency, organizations can be compared more effectively. Companies not only gain insight into their own performance but can also learn from peers excelling in broad-based prosperity. This provides policymakers and organizations with powerful tools to enhance strategies and amplify the impact of policies and innovations.”
Behavior patterns
Brouwer’s research also delves into human behavior: to what extent are people willing to pay for sustainable innovations? “A product might cost more upfront, but if it lasts longer or comes with an extended warranty, it can still be an appealing choice. A great example is how refrigerators are sold in France. In the Netherlands, we only display an energy label on refrigerators, but in France, there’s an additional label indicating how easy the appliance is to repair if it breaks down. Being able to use something longer is better for your wallet and the planet. I find it inspiring to see how France promotes awareness this way. I believe such practices should also be integrated into European legislation.”