SMEs and barriers to Eco-innovation in the EU: Exploring different firm profiles

Abstract

Eco-innovation is an explicit aim of major EU policy strategies. Many environmental policies de facto require firms to eco-innovate to comply with policy requirements, while the overlap between policy-driven and market-driven eco-innovation strategies is increasingly important for many firms. Barriers to eco-innovation can then emerge as a critical factor in either preventing or stimulating EU strategies, policy implementation, and the green strategies of firms. In this paper we focus on EU-27 SMEs. We single out and explore different firm profiles, considering eco-innovation barriers and engagement. Our analysis is based on a particularly suitable dataset: the Eurobarometer survey on “Attitudes of European entrepreneurs towards ecoinnovation”. We identify six clusters of SMEs. These clusters include firms facing either ‘Revealed barriers’ or ‘Deterring barriers’, ‘Cost deterred’ firms, ‘Market deterred’ firms, ‘Non eco-innovators’, and ‘Green champions’. The clusters display substantial differences in terms of eco-innovation adoption. We show that our taxonomy has little overlap with sector classifications. This diversity should be taken into account for successful environmental and innovation policies.