Identifying Driving Factors of Technological Innovation to Create Sustainable Value in Metal Manufacturing SMEs

Abstract

One of the keys to the company’s success in achieving sustainability is the application of technological innovation. Technological innovation plays a crucial role in creating manufacturing values and excellence. It is necessary to understand what are the key drivers of implementing technological innovations that can support the achievement of competitive advantage and sustainability in manufacturing companies, including Small and Medium Enterprises (SMEs). With all the limited capacities and resources, technological innovation becomes challenging for SMEs, especially to deal with dynamics and uncertainties in the business environment. This study aims to determine the key drivers of the application of technological innovation in manufacturing SMEs to support the achievement of sustainable competitive advantage. The case study was conducted in metal manufacturing SMEs in Indonesia. This study uses Interpretive Structural Modeling (ISM) in determining the contextual relationship between the identified key drivers. Based on the results, it is known that among the eleven key drivers, three drivers belong to the dependent cluster, four belong to the linkage cluster, and the rests belong to the independent cluster. In addition, the results of this study show that factors related to management support and commitment, government regulations, collaborative support, as well as the application of artificial intelligence, are the main key drivers that need to be prioritized for the successful application of technological innovation towards sustainability. The findings of this study are intended to assist managers and practitioners, especially those engaged in metal manufacturing SMEs, to develop a strategic plan for creating sustainable manufacturing values, in the context of technological innovation.