Charting the Course: Real‐World Application of Sustainability and Innovation Principles in the Portuguese Blue Economy Firms

The blue economy has emerged as a key sector for linking sustainability and innovation, yet existing research has largely overlooked how firms operationalize these processes in practice. This study addresses that gap by asking: How do Portuguese blue economy firms embed sustainability‐oriented innovation (SOI) into their strategies, and what institutional conditions enable or constrain it? This study explores SOI through an analysis of five Portuguese firms. Adopting a qualitative approach, it employs semistructured interviews, supported by content comparison techniques and thematic coding. The findings indicate that stakeholder collaboration, circular economy principles, and renewable energy integration support sustainability performance, whereas financial constraints, regulatory inefficiencies, and bureaucratic hurdles limit broader adoption. Drawing on institutional theory, the resource‐based view, and the triple bottom line framework, the study contributes theoretically by showing how SOI is negotiated between institutional pressures and firm capabilities, revealing tensions between compliance and strategic agency. The study underscores the importance of institutional support, stakeholder engagement, and adaptive business strategies in overcoming systemic barriers. These results provide practical direction for policymakers and business leaders, highlighting the need for streamlined regulation, targeted financial incentives, and cross‐sector collaboration. For policymakers, this means aligning incentives with SME capacities and building collaborative governance platforms; for firms, it means leveraging partnerships and resource‐based advantages to scale sustainable business models. By clarifying both institutional dynamics and firm‐level practices, the article advances understanding of how sustainability transitions are enacted within the blue economy.