ABSTRACT
Sustainable growth appears to be a must for the survival of humanity on planet earth. Businesses are urged to adopt sustainable practices and sustainability-oriented innovation is a necessary tool for that purpose. While larger firms have the knowledge and resources for this type of innovation, smaller firms face major difficulties. Sustainability is frequently not a strategic option for them. The study of drivers and barriers to sustainable innovation in small and medium enterprises (SMEs) has received some attention in the literature, but their investigation in institutionally weak environments, like those of many small countries, is relatively under-researched. The present chapter aims to examine the various challenges of sustainable innovation in such cases. It will consider the most relevant theories and the available empirical research on this topic.
