The process supporting the emergence of the environmental innovation capabilities within small businesses: an empirical investigation

For several years, companies have made strategic changes to align with sustainable development principles by developing eco-innovations. While existing literature shows a positive relationship between eco-innovations and organizational performance, uncertainties remain about the factors that stimulate and support these processes, especially for SMEs. This inconsistency is due to SMEs heterogeneity and to their high sensitivity to external contexts. Using a Partial Least Squares approach, we examined the influence of competencies, technological factors, and networking on the eco-innovation capabilities of a homogeneous SME population in terms of sector, age, size, legal status, geographical location and orientation towards innovation. Our findings show that competencies and technological factors positively impact eco-innovation, while networking has no significant effect. This highlights the importance of internal competencies and technological adoption, suggesting that networking is crucial when supportive public and private tools for SME development are lacking. By considering the rapid and turbulent changes occurring in the markets for EU companies due to the necessity to balance the sustainable development and the capacity to favour a transition toward cutting-edge activities to assure countries competitiveness, our results offer useful guidelines for policymakers to define new more appropriate policies.