Since the film of Al Gore An inconvenient truth, sustainability stands high on the national agenda of most countries. Concern for the environment is one of the main reasons in combination with opportunities to innovate.
In general, innovation and entrepreneurship are important in the realm of national economies because they hold the key to the continuity and growth of companies (e.g. Hage, 1999; Cooper, 1987; Van de Ven, 2007) and economic growth within a country. It is therefore obvious that national governments are investing money to enable and improve innovation management and entrepreneurial behaviour within organizations with sustainability in mind. Policy measures are aimed at reduction of carbon dioxide emission, waste management and alternative use of energy sources and materials. In line with these measures companies are urged to integrate sustainability in their business processes and search for innovative sustainable solutions. While on a national level policy measures towards a more sustainable society are defined, enterprises - and especially small and medium sized companies - lag behind and fail in incorporating these measures appropriately in their day-to day business. As a result research for sustainability has become an important driver for innovation.
Within the Centre for Innovation and Entrepreneurship (CI&E) at The Hague University of Applied Sciences we have taken the initiative to develop an innovation and research program for the construction industry to help small and medium sized companies (SME's) integrate sustainability in their business processes, while simultaneously professionalizing students and lecturers. This paper is part of ongoing research among 40 companies in the region of South-Holland. The companies are mostly SME's varying from very small (6 employees) to middle-sized (more than 100).

According to Rennings (2000) while innovation processes toward sustainable development have received increasing attention during the past years, theoretical and methodological approaches to analyse these processes are poorly developed. This paper describes a theoretical approach developed at our university's Centre for Innovation and Entrepreneurship, which combines education and research. It is an inductive approach that departs from real-life problems encountered by companies, and is aimed at developing a model that supports companies in integrating sustainability in their business and innovation processes. We describe the experiences so far with a number of companies in the construction industry, which participate in the innovation and research program described above and the barriers they encounter.
Our sustainable program is centred on four themes: cradle-to-cradle, social corporate responsibility, climateneutral construction and sustainability and customer orientation in the building process. It is an exploratory research in which students and undergraduates are involved under the supervision of a lecturer as senior researcher of this program. Through an in-depth analysis of the companies, participant observation and indepth interviews with the owners/directors of the companies, experts and prominent sustainable trendsetters, insight is gained in innovation processes towards sustainable development. Preliminary conclusions show that on a company level one of the main bottlenecks is the dilemma posed by the need for profit for the continuity of a company, while taking into account people and planet. The main bottleneck is however the inability of companies to translate policy measures into strategy and operations.

This paper is set up as follows. In section 2 we give an account of European and Dutch policy measures geared at stimulating sustainability in a business context and especially the building and construction industry. In section 3 an overview is given of the economic importance and characteristics of the Dutch building and construction industry and the problems in this sector. These problems are offset against the opportunity of sustainability as a strategic option for SME's in this sector. In section 4 the innovation and research program developed at the CI&E is introduced in the context of the main research question. Following that in section 5, methodological choices are addressed and the research design is presented. We finalize this paper in section 6 with our conclusions and recommendations for further research.