Factors influencing Latvian small and medium enterprises towards eco-innovation

Abstract

Although small and medium enterprises (SMEs) are the backbone of national economies, they face many barriers and constraints towards innovations, particularly eco-innovations. In the European Union (EU) eco-innovations had been recognized as an important contributor for sustainable and green growth. The aim of the study is two-fold: 1) to determine the main barriers of eco-innovations' development in Latvia; 2) to compare the state of the main identified barriers among the EU countries. The main barriers of eco-innovations are identified via statistical analysis of SMEs managers' attitudes, using the Eurobarometer survey questionnaire. Performing the statistical analysis two factors are extracted, which account 81.7 % of the common variance, and are indicated as the main barriers for eco-innovation. These factors are financial resources (72.3 % of total variance) and human resources (9.4 % of total variance). Latvia and Lithuania score similarly both factors, but Estonia rates the environment as the most important, leaving human resources on the second position. Using the factors as dimensions all EU countries show differences in the rates between the four clusters.