There are a variety of economic and ecological benefits to increased resource efficiency. Social, institutional and technical innovations can all contribute towards efficiency increases. Companies face different hurdles in fostering such innovation. Small and medium-sized companies are subject to specific constraints that may prevent them from benefiting from innovationinduced resource efficiency improvements. Qualitative interviews were conducted among German small and medium-sized enterprises (SMEs) and intermediaries to identify barriers for resource efficiency innovations and to elaborate a policy mix at the federal level that could help SMEs to overcome these. We found five major barriers to resource efficiency innovations in German SMEs, comprising deficits in innovation culture, inter-firm cooperation along the value chain, finance, awareness and take-up of government funds. We propose a distinct policy mix as a response to this situation. The policy mix comprises the interlocking and synergistic elements of government funding schemes, innovation agents and innovation laboratories.When it comes to cost saving firms often look at labour rather than resources. In the economically orientated debate, the relatively complex topic of resource and material efficiency receives much less publicity than labour costs 309 Governing Resource Efficiency Innovations