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This paper investigates which innovation capabilities are more important for driving technological and non-technological innovations and which of the two innovation types has the greatest impact on the financial performance of manufacturing companies.

Based on a theoretical model of four innovation capabilities – two technological: Technology Development Capability and Operations Capability, and two non-technological: Management Capability and Transaction Capability – a database of 1,331 Brazilian manufacturing companies was analyzed through partial least squares structural equation modelling (PLS-SEM).

The results indicate that technological capabilities (Technology Development and Operations) have a greater impact on technological innovation. However, both technological capabilities also affect non-technological innovation, with the Technology Development Capability being the most influential in this relationship. Results also indicate that non-technological capabilities (Management and Transaction) have a greater impact on non-technological innovation. Nevertheless, both non-technological capabilities also impact technological innovation, especially the Transaction Capability, which is the most influential in this relationship. Furthermore, it was identified that non-technological innovation has a more significant impact on financial performance than technological innovation, presenting a novel finding to the field of innovation in manufacturing.

This manuscript refutes prior discussions and opens new possibilities for the interconnection of dynamic and ordinary innovation capabilities in two different arrangements, each aimed at improving a specific type of innovation. A theoretical framework is proposed to highlight that, depending on the innovation type focused on, ordinary innovation capabilities can be more relevant than dynamic ones for innovation in the manufacturing sector. From these theoretical advancements, practitioners can understand that investments in non-technological resources, skills and routines can also boost technological innovation, as well as sales, profit and market share growth.

Challenges related to sustainability have increasingly become pivotal in the realm of business strategy and innovation. Nevertheless, the incorporation of sustainability principles into business strategies and innovative practices remains a subject of ongoing scholarly debate. This paper aims to undertake a thematic literature review on this theme.

Data were gathered from the Scopus, Web of Science and Science Direct databases. The final sample comprised 85 papers. For analytical purposes, this study adopted topic modeling using Latent Dirichlet Allocation (LDA) methodology.

The authors identified five dominant topics concerning the relationship between sustainability, innovation and business strategy. Through a cross-analysis of these topics, the authors theorize that a sustainable innovation strategy encompasses three complementary and interdependent dimensions: capabilities, management and firm. Building on this analysis, the authors outline a research agenda aimed at further exploration and advancement of this theme.

This review enhances the synthesis of research on the theme, prompting reflections on how companies can initiate innovative sustainable actions that align with their business strategy. Additionally, the authors identify specific elements that require improvement to enhance each of the three dimensions of sustainable innovation strategies, such as eco-efficiency, circular economy and the adoption of innovative business models oriented toward services/servitization.

By interweaving sustainability with innovation and business strategy, this study underscores the critical topics that companies and public policymakers should address to support sustainable development at the national level.

While previous literature reviews have focused on the dyadic relationships between sustainability and strategy, or sustainability and innovation, this study extends the boundaries of knowledge by integrating these three concepts into a hybrid theoretical stream.