Innovation In Small And Medium Enterprises Research Articles

SME owners’ roles for mutual reinforcement of innovation and entrepreneurship in dealing with digital technologies: case studies of selected Indonesian SMEs

ABSTRACT This article explores the relationships among innovation, entrepreneurship, and digital technology, specifically how the management of small and medium enterprises (SMEs) utilise innovation and entrepreneurship to deal with digital technologies and/or how the management leverages digital technologies for innovation and entrepreneurship. A qualitative research approach using a case study was employed to examine the phenomena, focusing on deep observations. The research found that SME owners play crucial roles in three areas: (i) demonstrating entrepreneurial ability through knowledge, experience, talent, and innovation; (ii) performing strategic functions by leveraging external sources of innovation, with the help of digital technology; and iii. acting as digitally minded entrepreneurs to enhance manufacturing processes and establish new marketing channels. The mutual reinforcement of innovation and entrepreneurship in dealing with digital technology, is influenced by both user and demand-driven innovation, knowledge and technology-driven innovation, experiential knowledge-driven innovation, articulation of innovation outcomes, digital network-based marketing, and technical guidance on digital transactions in e-commerce and e-business. This research confirmed that there is a mutual reinforcement between the innovation and entrepreneurship of SMEs in adopting digital technology. New insight for digitally minded entrepreneurs is the use of digital technology to boost business efficiency toward global enterprises’ competitiveness and sustainability.

The mediating role of knowledge management processes on the relationship between knowledge-based HRM practices and open innovation in SMEs

Purpose Studies have demonstrated the role of human resource management (HRM) practices and knowledge management processes (KMPs) in innovative performance. However, there is limited focus on the role of HRM practices in facilitating KMPs in organizations, most especially in small and medium enterprises (SMEs) that are constrained by lack of adequate resources, making them dependent on external sources of knowledge. In addressing this gap, this study aims to investigate the link between knowledge-based HRM practices and open innovation (OI) activities through KMPs in Jordanian SMEs. Design/methodology/approach Following the survey method, 500 manufacturing SMEs in Jordan were randomly selected as participants, with a total of 335 responses collated. The structural equation modeling technique, based on AMOS, was used in analyzing the collected data. Findings The findings revealed a significant positive relationship between knowledge-based HRM practices and OI. In addition, KMPs was determined to be a significant mediator of the relationship between knowledge -based HRM practices and OI. Originality/value The study contributes to the literature by emphasizing the organizational elements that boost OI in SMEs. The findings hold significant implications for enhancing the performance of innovativeness, competitiveness and the socioeconomic advancement in the SMEs sector.

The integration of circular economy and digital transformation as a catalyst for small and medium enterprise innovation

AbstractThis study examines the integration of digital and circular economy (CE) strategies in small and medium enterprises (SMEs) and their impact on innovation. The research uses data from the Eurobarometer survey conducted by the European Commission, which includes a sample of 16,365 SMEs. Using a combination of regression analysis and machine learning tools, the results indicate that a high degree of digitalisation within SMEs enhances the integration of a CE orientation. However, it is not necessary for SMEs with advanced CE orientations to have high levels of digitalisation. Additionally, the study finds variability in the integration of digital and CE orientations among SMEs, identifying four distinct groups of companies with differing levels of compatibility. Moreover, SMEs that successfully integrate both digital and CE orientations are more likely to innovate, whereas those with poor integration exhibit a lower probability of innovation. These findings offer crucial insights for managers and policymakers aiming to bolster SME innovation, digitalisation and sustainability. The research underscores the need for a balanced integration of digital and CE orientations to enhance innovation and environmental impact in SMEs.

Design Science for Networks Designing: A Service-Dominant Logic Approach

This research explores the dynamics of coopetition among Small and Medium Enterprises (SMEs) during digital transformation, using Design Science Research (DSR) anchored in Service-Dominant (S-D) Logic. It examines the integration challenges of manufacturing SMEs into digital supply chains, highlighting the critical role of coopetition—a blend of competition and collaboration—in driving sustainable growth in this essential sector. Prompted by a consensus on reducing SME vulnerabilities, the study underscores the need for a resilient framework, especially given an 85% attrition rate in digital networks where only a minority, often supported by giants like Amazon and Microsoft, succeeds long-term. The proposed framework focuses on leveraging technology to enhance SMEs' competitiveness, innovation, and growth. This study contributes to academic discourse by suggesting future research directions, such as defining value creation in coopetition networks and assessing the impact of innovative artefacts, but also reveals the potential of coopetition networks as platforms for mutual value creation. This research enriches scholarly discussions on coopetition in the digital age and offers strategic guidance for SMEs navigating digital transformation, aiming to prepare European SMEs for upcoming challenges and opportunities.

Innovation in Small and Medium Enterprises in Vietnam

In a rapidly evolving market context, innovation plays a crucial role in the success of Small and Medium Enterprises (SMEs) in Vietnam. This study delves into the significance of business innovation, particularly in light of the need for SMEs to cultivate new competitive advantages amidst a growing number of similar competitors. For Vietnamese companies, innovation is not merely an option but a necessity for sustainable growth. This article focuses on exploring the advantages, disadvantages, opportunities, and risks associated with innovation in Vietnamese SMEs.

TRANSFORMASI INOVASI MODEL BISNIS PADA UMKM BATIK PASCA PANDEMI COVID 19

The pandemic phenomenon had a significant impact on small and medium-sized enterprises, compelling them to respond to the situation. Business Model Innovation (BMI) represents an innovation model suitable for the sustainability of small and medium-sized enterprises, particularly as the local SME situation deteriorated during the first two years of the COVID-19 pandemic, specifically in 2020-2021. The reconfiguration of business models has emerged as one of the alternatives for SMEs to overcome these challenges. The business model concept enables Small and Medium Enterprises (SMEs) to tackle dynamic business challenges. In reality, the alteration of Business Models (BMs) in SMEs varies across different organizations. This research aims to provide insights into the changes in BMs for SMEs following the pandemic, specifically within the batik industry, through the Integrated Marketing Communications (IMC) approach applied to various case studies. The method used in this research is descriptive qualitative through case studies with case selection using a purposive sampling approach, which is the MSME of the Batik Industry. The results of this study offer empirical information about the Business Model Innovation (BMI) of SMEs during the pandemic, which can serve as a foundation for further research in BMI, particularly concerning SMEs. 
 Keywords: Business Model Innovation; SMEs; Batik; Pandemic

Impact of capital Structure on Innovation and Performance of Small and Medium Enterprises in Nigeria: A study of the sector in the North Central States

The issue of capital structure of Small and Medium Enterprises (SMEs) and the impact of each component on the innovation and performance of the sector in Nigeria has been lingering. A number of studies have been done on financial leverage businesses but none on SMEs in Nigeria. The aim of this study therefore is to examine the impact of capital structure on innovation and performance of SMEs in Nigeria: A study of the sector in the North Central States of the country. Random sampling technique was adopted and data were sourced primarily from 480 respondents comprising owners and managers of 127 SMEs operating in Plateau, Nasarawa, and Kogi States in the Central Zone of the country. Responses to the questionnaire designed to reflect five points Likert scale were analysed using Partial Least Square Structural Equation Modelling (PLS-SEM). Results indicated that Crowd Funding (CF) an external sources of finance has the most significant impact on the innovation and performance of these enterprises. The study recommended that while SMEs operators should develop a platform for exchange ideas on financing sources available to the sector, Enterprise Development Agency of Nigeria (SMEDAN), the regulatory authority of the sector in the country should develop programmes to encourage innovative ability of the operations of enterprises.

Study on the impact of digital transformation on green competitive advantage: The role of green innovation and government regulation.

Digital transformation enables small and medium enterprises (SMEs) to reduce or overcome their reliance on resources and energy, thereby minimizing their environmental impact and providing them with sustainable green competitive advantages. However, the reasons for this phenomenon are not yet clear. To further investigate this issue, we selected 391 Chinese SMEs to examine the relationships among green transformation, green innovation, government regulation, and green competitive advantages. Green innovation includes green product innovation and green process innovation, while government regulation includes incentive regulation, constraint regulation, and guidance regulation. The empirical results show that digital transformation can enhance SMEs' green competitive advantages. Additionally, the hypothesized mediating effect of green product innovation and green process innovation between digital transformation and green competitive advantages is supported, while the moderating effect of incentive regulation, constraint regulation, and guidance regulation on the relationship between digital transformation and green product innovation and green process innovation is also confirmed. The findings of this study may contribute to more effective management of digital transformation and green innovation in SMEs, thereby promoting their development.

Impact of leadership styles on employee performance in small and medium enterprises

This study focuses on the relationship between leadership styles and employee performance within the framework of European small and medium enterprises (SMEs). The study conducted interviews with 50 leaders and employees of different SMEs to collect data and reach the findings. The study shows the mixed influence of leadership styles and contextual moderation through qualitative interviews of leaders and employees from various SMEs in Europe. It sheds a spotlight on the various styles of leadership that typify many European SMEs, such that transformational leadership dominates significantly. The sense of dedication and zeal encouraged by charismatic leaders prompts professionals to action. Transactional leadership, however, does facilitate task-oriented accomplishment but it adversely affects employee’s vitality. The lack of common feedback on laissez-faire leadership highlights the essence of flexibility and considering the preferences of team members. Social psychological and other contextual aspects — organizational culture and the SME developmental stage — are, therefore, very important moderators of styles. With transformational leadership, innovative SMEs can thrive; transactional leadership might cause SMEs from regulated industries to grow fat on them. The preferential leadership according to the start-ups and the mature SMEs is different. Its implications for practice point out the importance of coherence with respect to the personality style of the leader concerning the context of the organization and the needs of employees.

Navigating the digital landscape: examining the interdependencies of digital transformation and big data in driving SMEs' innovation performance

PurposeIn this digital age, the rapid technological innovation and adoption, with the increasing use of big data analytics, has raised concerns about the ability of small and medium enterprises (SMEs) to sustain the competition and innovation performance (IP). To narrow the research gap, this paper investigates the role of big data analytics capability (BDAC) in moderating the relationship between digital innovation (DI) and SME innovation performance.Design/methodology/approachThis research has been carried forward through a detailed theory and literature analysis. Data were analyzed through confirmatory factor analysis and structural equation models using a two-stage approach in smartPLS-4.FindingsResults highlight that digital service capability (DSC) significantly mediates the relationship between DI and IP. Additionally, value co-creation (VCC) directly affects digital transformation (DT), while DI has a stronger effect on DSC than IP. Furthermore, BDAC significantly moderates the relation between DSC → IP and DT → IP, whereas it has a detrimental effect on the relation between DI and IP. In addition to that, VCC, DSC, DT, DI and BDAC have a direct, significant and positive effect on IP.Practical implicationsThis research was motivated by the practical relevance of supporting SMEs in adopting DT and the resource-based view (RBV) and technology acceptance model (TAM). This study shows that all direct and indirect measures significantly affect innovation performance, including BDAC as moderator. These findings refresh the perspective on what DT, DI, VCC, DSC and BDAC can bring to a firm's innovation performance.Originality/valueThis paper has contributed to DT by empirically validating a theoretical argument that suggests the acceptance and adoption of new technology. This paper aims to fill theoretical gaps in understanding BDAC and DT by incorporating the RBV and TAM theories on BDAC and DT.

Impact of COVID-19 on the Supply Chain of Small and Medium Enterprises: Case Studies on Food, Manufacturing and Hospitality Industries

The constant flux in the supply chain has intruded on the demand and supply equilibrium throughout the globe. Firms that elongated the operation period have to pursue changes in suppliers to respond to the tumultuous trading environment due to the COVID-19 pandemic. This paper aims to develop a framework for supply chain disruption for different small and medium enterprises (SMEs) in the Food, Manufacturing, and Hospitality industries. SMEs are susceptible to fluctuant economic change since the change puts an enormous threat to the sustainability of SMEs. Therefore, strategic foresight is crucial for SMEs to be competitive in the market. In this paper, rationalization and digital transformation are chosen as potential measures to conquer the unsettled economic environment. Reformation and innovation in SMEs could provide opportunities to maintain the firms long-term healthy operation. This study can help SMEs comprehend the importance of modern strategies and survive during the outbreak of COVID-19.

Impact of environmental sustainability on open innovation in SMEs: An empirical study considering the moderating effect of gender

Sustainable development has emerged as a crucial factor enhancing the competitiveness of small and medium enterprises (SMEs) in light of societal expectations and government regulations. Within this context, innovation assumes a significant role in this challenge, particularly for smaller companies facing greater obstacles in fostering innovation. These constraints have prompted both internal and external innovation initiatives, commonly referred to as open innovation. In this article, we scrutinize the influence of environmental practices on innovation endeavors, specifically examining whether the innovation strategy and its implementation facilitate the advancement of open innovation within SMEs. Furthermore, we explore the potential moderating effect of firm owners' gender on these relationships. The research model is validated using data from 543 companies in Ecuador, employing the partial least squares (PLS) method. The findings elucidate how environmental sustainability can promote the adoption of open innovation practices, with the innovation strategy and its implementation acting as mediators in this relationship. The impact of gender only manifests in the innovation strategy pertaining to environmental sustainability. In conclusion, open innovation stemming from the pivotal role of environmental sustainability emerges as a critical driver in augmenting innovation performance across various dimensions, such as quality, growth, efficiency, process enhancement, organizational practices, employee motivation, and acquisition of new product/service skills.

Entrepreneurial Marketing Practices and the Performance of Small and Medium Enterprises in Kogi State

Purpose: This study is aimed at the entrepreneurial marketing practices (EMP) and performance of small and medium enterprises (SMEs) in Kogi State.Methodology:A survey research design was used for the study. The researchers gathered data from 208 participants. The data collected were analyzed using descriptive statistics and multiple regression analysis.Findings: Findings showed that SMEs' proactive-ness (PROA) and customer satisfaction have a negative association. However, the relationship is insignificant (p>0.05). Risk-taking (RSKT) and innovativeness (INVT) of SMEs and customer satisfaction have a favorable link that is statistically significant (p<0.05).Implication:The study concludes that SME owners and managers must properly evaluate their EMP, which may be the possible cause of the inability to cope with the dynamic and competitive business climate. The study recommended, among others, that SME owners and managers embrace more innovativeness and risk-taking disposition to achieve improved performance relative to customer satisfaction and combine entrepreneurial marketing skills of risk-taking and innovativeness.

The effect of innovation on competitive advantage and SMEs performance in Vietnam: the moderating role of customer orientation

Purpose The purpose of this paper is to find out how absorptive capacity (AC), leadership capacity (LC) and government support (GS) affect small and medium enterprises (SMEs) innovation (product innovation [PDI], process innovation [PCI] and distribution channel innovation [DCI]), taking into consideration the role of innovation (PDI, PCI and DCI) on competitive advantage and SMEs performance and the moderating role of customer orientation (CO). Design/methodology/approach This study gives a theoretical model tested using structural equation modeling. The information used to test the hypotheses came from interviews with the top managers of Vietnam’s SMEs. The 633 survey respondents from the southern part of Vietnam were chosen for the study. The goal of the 47-item questionnaire is to look at how all variables relate to each other. Findings The results show that a firm’s LC has the most significant impact on innovation, followed by its AC and GS. According to the study, DCI does not lead to competitive advantage but improves SMEs’ performance. In addition, the study’s findings indicate that CO moderates the relationship between PDI – SMEs performance and DCI – SMEs performance. Research limitations/implications The classification of only three types of innovation (PDI, PCI and DCI) restricted the applicability of the research to other kinds of innovation in SMEs. Second, only AC, LC and GS are identified in this study as external factors that influence business innovation. In this study, the authors have not studied different business industries; the authors recommend that the research in the back on SMEs should investigate their classification into distinct industry groups, including agricultural, forestry and marine products; industry and construction; and commerce and services. Practical implications This study shows the importance of innovation senior management for innovation in SMEs. This study found that innovation, especially continuous innovation, increased competitive advantage and SMEs performance. Companies that wish to innovate must have access to external resources and support. Moreover, enterprises must comprehend their consumers’ wants to achieve innovation and better SMEs’ performance. Social implications This research significantly contributes to enterprise innovation and operational efficiency for the sustainable development of SMEs in Vietnam. It is expected to enhance employment opportunities, maintain social stability and expand Vietnam’s gross domestic product. Originality/value This study contributes to the growing knowledge of the indirect and direct effects, the mediating function of innovation (PDI, PCI and DCI) on competitive advantage and SMEs performance and the moderating effect of CO.

Impact of Globalisation on Innovation of Small and Medium Enterprises in Vietnam

Innovation contributes to improved labour productivity and an enhanced competition, thereby ensuring to the development of the firm. However, small and medium enterprises (SMEs) encounter many difficulties in attempts to innovate. It is not clear whether globalisation works to encourage firms to innovate via transferring knowledge and promote market competition mechanism; or whether it works against such innovation due to a negative impact on the diversification of different dimensions in economic, social, and political life. The primary purpose of this research was to examine how globalisation affects innovation among SMEs in Vietnam. It analyses the micro and macro effects of globalisation on innovation in businesses using a Probit model with data obtained from selected SMEs during the period 2005–2015. The result showed that at a macro level, globalisation negatively correlates with innovation. Additionally, it was found that economic and political globalisation facilitates innovation while social globalisation discourages it. At the micro level, increasing competitive pressure and knowledge transfer due to globalisation are positively correlated with the propensity towards innovation of SMEs.

The Role of Innovation for Post-Crisis Recovery of Small and Medium-Sized Enterprises

Small and medium enterprises (SMEs) are the most important part of our economy and their condition and development is decisive for the general economic performance and development of the country. They are highly vulnerable to economic shocks and uncertainties, and since the beginning of 2020 they have faced major challenges due to the COVID-19 pandemic and the consequences of the war in Ukraine. In these conditions, the role of innovation as the main tool for survival and getting out of the difficult situation is growing. The purpose of this article is to briefly present the results of an empirical study of the role of innovation in SMEs to recover from the COVID-19 crisis and to improve their economic performance. These results are indicative of the impact of innovation on economic success during times of crisis. They can be discussed, but they can also be the basis for the correct direction of the efforts of enterprises to improve their competitiveness.

The impact of social media adoption on innovative SMEs’ performance

ABSTRACT This paper empirically investigates Social Media adoption as a driver of firms’ performance. Specifically, we focus on the relationship between the embracing of Twitter and Italian Innovative Small and Medium Enterprises (SMEs) profitability over 2011–19. Although Twitter is perceived as a low-cost and effective communication channel, the main results show that Innovative SMEs adopting Social Media appear to have lower profitability than those without social network implementation. An interpretation of this evidence can rely on the difficulty of innovative SMEs in overcoming barriers to Twitter adoption related to the human capital required to maintain relationships with the online community of consumers in the Italian context.

Government policy, IT capabilities, digital transformation, and innovativeness in Post-Covid context: case of Vietnamese SMEs

PurposeCOVID-19 has made businesses increasingly dependent on technology to be competitive and efficient. Small and medium enterprises (SME) digitalisation and innovation research are widespread. SME digital transformation and innovation require government policies, initiatives and assistance. How the government can help SMEs achieve these goals is unclear. So, this paper aims to investigate how government policy may assist Vietnamese SMEs to boost innovation performance and digital transformation.Design/methodology/approachThe study will take a quantitative approach, with questionnaires distributed to 659 respondents from SMEs in Vietnam through snowball and convenience sampling procedures. The structural equational modelling method is used for data analysis.FindingsThe study indicated that government policies supported Vietnamese SMEs’ innovation and information technology (IT) capabilities. Government policy assistance also boosted IT capabilities and innovation. Furthermore, mediation effects show that digital transformation fully mediates the relationship between innovativeness and firm performance, whereas IT capabilities partially mediate this relationship.Research limitations/implicationsFurther research that replicates the findings and analyses contextual heterogeneities between nations is advised because Vietnam’s pandemic setting was both similar and dissimilar.Practical implicationsThe study demonstrated government-company interactions through supportive policy. It investigated whether SMEs seeking digital transformation and innovativeness might gain competitive benefits by implementing effective knowledge management and enhancing their IT capabilities.Originality/valueA resource-based theoretical framework is extended to study how innovation, public policy and digital transformation for SMEs interact. The study confirms government policy strongly influences enterprises’ digital development. Specifically, the new mediating effects of IT capabilities and digital transformation are explored and provide new insights into the existing literature.

Applying deep learning to predict innovations in small and medium enterprises (SMEs): the dark side of knowledge management risk

PurposeThis study aims to predict the dark side of knowledge management risk to innovation in Portuguese small and medium enterprises (SMEs). It examines the spinner innovation model factors of knowledge creation, knowledge transfer, private knowledge, public knowledge and innovation in uncertain environments.Design/methodology/approachThe authors developed a conceptual model to support the analysis. The survey data stemmed from a sample of 208 Portuguese SMEs in Portugal. The authors analyzed the primary data from the ad hoc survey using the data mining (deep learning) technique.FindingsThe research sets out and tests factors relevant to understanding how to predict innovation in uncertain business environments. This study identifies four factors fostering innovation in SMEs: knowledge creation, knowledge transfer, public knowledge management and private knowledge management. Knowledge creation showed the best return and presented the closest relationship with innovation.Originality/valueInnovation models generally measure the relationships between variables and their impacts on the economy (economic and regional development). Predictive models are considered in the literature as a gap to be filled, especially in an uncertain environment in the SME context.

The impacts of innovative and competitive abilities of SMEs on their different financial risk concerns: System approach

Research background: The lack of financial resources of small and medium enterprises (SMEs) make them face high financial risk. Their entrepreneurial abilities that belong to Resource-based View (RBV), such as innovativeness and competitiveness, might reduce SMEs? financial risk because those entrepreneurial abilities increase the financial performance of businesses. Purpose of the article: This paper aims to investigate the effects of the innovativeness and competitiveness of SMEs on their financial concerns based on financial risk, including bankruptcy, financial performance, and financial risk management. Methods: The authors use a method of data analysis and synthesis, including advanced knowledge and digital processing of background studies. This paper examines 1221 SMEs from the Czech Republic, Slovakia, and Hungary. Those firms are chosen by random sampling method from Cribis and the Budapest Chamber of Commerce databases. Then the researchers directed an online questionnaire to collect the research data from the randomly selected firms. The researchers use Ordinal Logistic Regression Test for analysis purposes. Findings & value added: This paper's results indicate that SMEs' competitiveness does not impact SMEs? bankruptcy prediction, financial performance, or financial risk management. On the other hand, while more innovative SMEs are less likely to face bankruptcy issues than less innovative SMEs, less innovative SMEs indicate better financial performance than their more innovative counterparts. Since this paper focuses on the influences of intangible assets of SMEs (such as characteristics based on RBV and Entrepreneurial Orientation) on their tangible assets (financial performance etc.) and puts emphasis on this fact from an International perspective, this paper makes a significant contribution to the literature. Furthermore, analyzing multiple relationships between SMEs? different entrepreneurial characteristics and various financial risk concerns is another important fact that might draw prospective readers? attention.