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.