Exploring Sustainable Growth: Eco-Innovation Among Small and Medium-Sized Enterprises

Abstract

We examined how small and medium-sized enterprises (SMEs) in the aerospace industry developed capabilities for eco-innovation, specifically SMEs enrolled in a green transition mentorship programme. To this end, we conducted multiple case studies over 2 years (August 2022 to November 2024) to gather data through semi-structured interviews with SME entrepreneurs before, during and after the programme and through direct observations for a total of 48 h. Interviews were conducted with 19 SMEs, and additional data were collected from ecosystem intermediaries. Lastly, we tracked two SMEs throughout the entire length of the 3-month programme. Data were analysed following Eisenhardt's method for theory building, using within-case analysis of each SME's trajectory and cross-case comparison to identify recurring patterns in eco-innovation capability development. The findings reveal that the SMEs developed eco-innovation skills by responding to ecosystem inputs. The programme helped them improve their opportunity-sensing skills to occasionally seize them and transform their business model, though challenges persisted. The participants and the ecosystem both required green dynamic capabilities to develop eco-innovation skills. The SMEs would nevertheless require a longer programme or structured follow-up.