Eco‐Innovation Among Environmental Small and Medium Enterprises: A Complexity Theory View on a Regional Paradox

ABSTRACT Environmental entrepreneurship and eco‐innovation, although cornerstones in the transition to a sustainable world, form a research nexus that remains largely understudied. We draw on the theory of complexity and the notion of cultural, temporal, and relational complexities to explain the process of eco‐innovation among environmental small–medium enterprises (SMEs) during the climate crisis years. Through a sequential mixed‐methods (135 respondent surveys and 17 in‐depth personal interviews) research design, our analysis exhibits how overlapping cultural, relational, and temporal dimensions synthesize the complex process of eco‐innovation, and how changes stemming from those dimensions have a significant effect on the development and commercialization rhythms of eco‐innovations. While half of our survey's participant SMEs are exporting eco‐innovations, their market success and internationalization are hindered by regional and national rules and regulations and competition from conventional enterprises. Funding eco‐innovation (economic) leads to collaborations (relational) between SMEs and universities. Yet, significant challenges in those collaborations undermine their success.