Drivers and Obstacles: A Narrative Review of Green Technology Adoption in SMEs

Abstract

Small and medium-sized enterprises (SMEs) are pivotal to economic development yet major contributors to industrial pollution, underscoring the need for their adoption of green technologies for sustainable transitions. This narrative review synthesizes findings from 122 studies (2009–2025) to map the complex landscape of obstacles and enablers influencing green technology adoption in SMEs globally. Drawing on institutional theory, resource-based, and diffusion-of-innovation perspectives, the analysis, spanning diverse geographic regions (Europe, Asia, emerging economies) and sectors (manufacturing, services), identifies financial constraints (high initial costs, limited capital access) as the most pervasive barrier, especially in developing economies. Additional challenges include knowledge gaps, regulatory complexities, and organizational inertia. Conversely, strong internal drivers (managerial commitment, environmental values) coupled with external support (government incentives, collaborative networks, market pressures) significantly promote adoption. The review highlights the dynamic interplay and contextual dependence of these factors, underscoring how targeted policy and strategic management can overcome barriers. Emerging trends, such as digitalization and circular economy principles, present new pathways for SME engagement. By integrating these insights, the review proposes a testable conceptual framework that delineates the direct, moderating, and interactive roles of key factors, providing a structured foundation for future research, policy design, and managerial practice aimed at accelerating the uptake of green technologies in the vital SME sector.