Micro is beautiful. Adoption of eco-innovations in micro-firms

Abstract

In Europe, micro-firms contribute significantly to both the economy and the environmental impact on ecosystems. Helping them become greener and stimulating innovation toward new sustainable and circular solutions could substantially contribute to the European goal of achieving carbon neutrality and environmental sustainability, as promoted by the European Green Deal and Next Generation EU programs. Nevertheless, eco-innovation (EI) by micro-firms is studied little in the literature. In this paper, we analyze the main determinants of conventional and EI adoption by micro-firms. We used an ad-hoc survey developed for enterprises in Emilia-Romagna (Italy), an important region in terms of innovation where micro-firms play a significant role in the economy. The paper analyzes whether human capital, training, R&D activities, collaboration activities to improve learning, and the environmental culture within the firm act as main determinants of innovation adoption, in addition to other standard drivers and barriers to innovation adoption studied in the extant literature. Moreover, we compare innovation adoption strategies between micro-firms and SMEs. While our results highlight differences in the determinants of EI and conventional innovation adoption, there are important heterogeneities when it comes to innovation adoption strategies.