Unlocking the Potential of Small- and Medium-sized Enterprises through the Climate-neutral Cities Mission | A case study of Malmö and Lund in the Region Skåne, Sweden

Abstract: Through the national innovation program Viable Cities, the City of Malmö and the City of Lund in the Region Skåne of southern Sweden have recently undertaken a mission to become climate-neutral by 2030, requiring the commitment and participation of the entire local, urban system in the pursuit and uptake of bottom-up, radical solutions. While small- and medium-sized enterprises (SMEs) make up the backbone of the region’s economy, their importance to the mission’s success has not been fully conceptualized, despite evidence indicating that some SMEs are suited for developing radical innovations while others will struggle to decarbonize their business. This thesis investigates their importance as well as how the government and intermediary organizations they rely upon can better engage SMEs through an exploratory case study of the two cities. Empirical data is collected from 20 semi-structured practitioner interviews and a range of documents (strategies, webinars, websites, conference recordings) and analyzed through a qualitative content analysis. In-depth analysis was informed by a conceptual framework which links the activities of the mission to the governance principles and perspectives of transition management. For practitioners, findings reveal that while mission-oriented policy may activate the potential of change-inclined SMEs, the diffusion of innovation will require a more blended policy approach. Furthermore, intermediaries and the government can help to develop niche, SME solutions and facilitate inter- and intra-sector collaboration to replicate and scale solutions. However, engagement with SMEs can be improved through coordinating activities and outreach, strengthening relationships, institutionalizing the mission, and communicating the business opportunities presented by the climate-neutral mission. For research, findings highlight a need for identifying new financing mechanisms and approaches to systems analysis, as well as critical review of the assumptions underlying mission-oriented innovation policy which may fail to capture the complexity involved in directing the bottom-up emergence of transformative urban change.