Innovation and Customer Involvement in Creating SME Business Performance in the Creative Economy Sector in Indonesia

Abstract

Nowadays innovation has become an important topic among academics and business practitioners. since the environment is increasingly competitive in a dynamic environment, the need to develop internal capabilities is increasingly becoming a prerequisite for global survival. Innovation and customer engagement practices are becoming important concepts to help companies achieve these niches. Despite the importance of innovation and customer engagement, research linking innovation and customer engagement with business performance in one model is still limited in the context of creative economy SMEs. The aim of this research is to provide new practical and theoretical insights into how SMEs adapt and further develop their innovation capabilities and leverage customer engagement for business performance. The paucity of studies in the existing literature underscores the potential contribution of future research. The novelty of this research is first, to develop the concept of innovation associated with customer involvement, whose linkages have not been widely disclosed in the context of SMEs in the creative economy sector. Second, build a relationship between customer involvement and business performance. Third, building the concept of developing the relationship of innovation to SME innovation in the creative economy sector by strengthening the role of mediating customer involvement. Fourth, to examine in an integrated and holistic manner the concept of innovation and customer involvement in creating SME business performance in the creative economy sector in Bali, Indonesia.