Eco-innovation across SMEs in European macro-regions

Sustainability is one of the key global economic priorities as all countries face the critical climate change challenge. In this paper we examine it in terms of Eco-Innovation (EI) from the perspective of the “business innovation modes” and study it in relation to macro-regional geographies in Europe. We analyse the small and medium-sized enterprise (SME) EI performance based on the adoption of a few archetypical business innovation modes, namely, the science and technology-based mode (STI), the learning-by-doing, by-using and by-interacting modes (DUI) or a combination of these two. These modes represent distinct bundles of practices adopted by firms based on their access to resources, skills and capabilities within and outside the firm. Therefore, this analysis diverges from most analyses focused on the impact of technology-push and demand-pull EI drivers. In this strand of literature, derived from research on innovation systems, these modes have been shown to produce a differentiated impact on innovation outputs. Our study is based on a sample of more than 15,000 business observations taken through the Eurostat Community Innovation Survey (CIS) 2014, the last European CIS survey with a section on eco-innovation. The results show different modes/practices applied in selected institutional and technological contexts (macro-regions) with varying rates of success. These findings deliver useful insights on the effectiveness of such business practices in stirring eco-innovation. In doing this, this study points out the role of the institutional and technological context on business EI practices in these macro-regions. Overall, this paper is a comprehensive study of the effectiveness of specific business innovation modes in different institutional contexts. The literature on innovation modes and innovation systems benefits by expanding its analysis from the general field of regular innovation to eco-innovation.