SMEs as Sustainability Transition Actors:A case study of SMEs’ roles in Accelerating Green Hydrogen Technology in the Netherlands

While sustainability transitions research has traditionally focused on large incumbent firms, small and medium-sized enterprises (SMEs) have received limited attention despite their crucial position in innovation ecosystems. This paper investigates the role of Dutch SMEs in accelerating the green hydrogen transition through an actor-based perspective, addressing three research questions: how SMEs perceive their role in sustainable energy transitions, what barriers and opportunities they face, and what policy support mechanisms they require. Drawing on 17 in-depth interviews with SMEs, policymakers, industry associations, and ecosystem facilitators, we employ the Gioia methodology to analyze how these actors contribute into the emerging green hydrogen economy in the Netherlands. Our analysis combines the Multi-Level Perspective (MLP) on sustainability transitions with dynamic capabilities theory to understand both systemic transition dynamics and firm-level adaptations. The findings reveal five aggregate dimensions that characterize SME experiences. First, SMEs construct sophisticated multi-level agency as market-driven innovators, system integrators, and flexibility providers, challenging traditional conceptualizations that confine them to niche-level activities. Second, they face a systemic "innovation-market gap" encompassing financial valleys of death, regulatory lock-ins, and absent market formation mechanisms that create self-reinforcing barriers. Third, SMEs develop distinctive dynamic capabilities, including entrepreneurial sensing, strategic flexibility, and ecosystem orchestration, to navigate resource constraints. Fourth, they pursue alternative transition pathways emphasizing distributed, flexible systems that contrast with dominant policy visions of centralized mega-projects. Fifth, fundamental policy-practice misalignments reveal biases toward incumbent-friendly configurations in current governance frameworks. This research makes three theoretical contributions: extending the MLP by demonstrating SMEs' multi-level agency across niche, regime, and landscape levels; advancing dynamic capabilities theory by revealing collective, networked capabilities specific to transition contexts; and conceptualizing the innovation-market gap as a central challenge in sustainability transitions. Practically, our findings suggest that realizing SME potential requires shifting from project-based to ecosystem-based support, developing strategic industrial policy that explicitly values diverse transition pathways, and creating patient capital instruments adapted to hardware technology timelines.