R&D, environmental innovation, SME, public support, case study


Environmental innovations are an important factor in the development of a sustainable society. Due to financial constraints, most SMEs do not have a serious interest in environmental questions, even though they represent an important share of pollution and natural resource consumption. In a time of economic recession, different public support mechanisms play an important role in reducing the negative impacts of market failure. The current study focuses on environmental innovation support for SMEs. Specifically, this paper serves as an exploratory study on the effects of public support on the environmental innovation activity, R&D funding and financial performance of SMEs. The authors use a case study approach to collect data and find indications the that the “Young researchers for the economy” programme: (1) increases environmental innovations; (2) does not crowd out private funds; and (3) improves the financial performance of SMEs. Drawing on the findings of interviews with general managers and owners, the authors offer recommendations for policy makers aimed at improving the programme.