There is an increasing social and political awareness of the importance of sustainable innovations. Strategic partnerships between policy makers, businesses, researchers and citizens are key to developing, implementing and applying eco-innovation, essential for the transition to a competitive green economy. Within this innovation ecosystem, universities can play a central role in creating viable alternative models that are driven by environmental sustainability. Based on evidence from the first survey on Eco-innovation in Europe- ‘The Eurobarometer 315 Survey on Attitudes of European Entrepreneurs towards Eco-Innovation’, the present paper examines the impact of university collaboration on eco-innovating small firms. It also considers how technology push, demand side factors and the regulatory framework, drive eco-innovation in European SMEs. This paper has several implications for managers, as well as for policy makers. For managers, it should be stressed that collaboration with universities is essential to drive all types of eco-innovations. Our findings also suggest that national government should foster cooperation with universities following EU example (eg. European Innovation Partnership in EcoAP), as national policies based on subsidies and fiscal incentives appear to be ineffective.