The Interrelationship between Corporate Social Responsibility and Strategic Innovation In Aveiro-based Startups

The environmental, social and technological developments of the past few years have increased the research on Corporate Social Responsibility (CSR) and Strategic Innovation. Both influence the company’s reputation, its employees’ motivation, its customers’ perceptions as well as other stakeholder’s decisions. However, most academic research is conducted in large firms or small and medium-sized enterprises. This article focuses on the relationship between CSR and strategic innovation in the startup context. As a result, this paper analyses to what extent does CSR influence strategic innovation and how do startup CEOs and founders perceive this interrelation? Furthermore, what effects does CSR have on employees’ motivation, company reputation and performance? In a full state of emergency over COVID-19, we conducted 15 semi-structured interviews with founders and CEOs of startups based at the University of Aveiro Incubator. The contacts were established through digital platforms, such as Hangouts and Zoom, and through cellphone calls. All of the interviewees had an idea of what CSR is, namely it is about the idea of contributing to society. Eleven of the interviewees agreed that innovation can be a motivating factor for practicing CSR. If a company combines CSR with innovation, it can differentiate itself and become more competitive, the interviewees revealed. All of the entrepreneurs defended that CSR can indeed improve employee motivation and performance. We also, herein, propose a model and perceive benefits from having startups report on their CSR efforts, which should be measured, including in relation to their innovation impact – and regarding the innovation culture and capacity for innovation of the firm.