The Role of Innovation Capability in Enhancing Sustainability in SMEs: An Emerging Economy Perspective

Abstract

Today, we are living in the knowledge century. Knowledge-based intangible resources in enhancing sustainable growth of small and medium enterprises (SMEs) is presently a significant scope of research. Innovation capability is the intuitive skill of an individual or a firm to transform an explicit concept towards value orientation that carries an economic value. This economic value would then lead to wealth creation and eventually result in sustainable SMEs. The SME sector has been highlighted for its significant contribution towards the creation of employment, opportunity for innovation and economic dynamism. In this study, evidence derived from knowledge-based view and knowledge creation theory was used to construct a structured model to analyze the relationships among innovation capability, disruptive technology and knowledge creation and their impacts on SMEs sustainability. A sample of 384 owners of SMEs in Sri Lanka was included in the study. The outcome of structural equation modelling (SEM) discovered positive effects of innovation capability, disruptive technology and knowledge creation on sustainability. Innovation capability also emerged as a predictor of disruptive technology and knowledge creation. Moreover, disruptive technology and knowledge creation were found to be partial mediators of the association between innovation capability and SMEs’ sustainability. These findings pave the way for policy makers to promote sustainability in SMEs, by assisting to enhance their performance in competitive and innovative economic environments. Further, the validated model can be empirically tested in future research.

Disruptive supply chain technology assessment for sustainability journey: A framework of probabilistic group decision making

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Exploring Determinants of Firm´s Innovation in Morocco: Evidence from the World Bank Enterprises Survey

“…Overall, the literature suggests that enhancing the innovation activities of firms is critical for sustainable development. However, there is a need for more research to understand the potential of firms, particularly SMEs, and the factors driving innovation, particularly in developing countries (Pinget et al 2015;Heenkenda et al 2022). By addressing this knowledge gap, policy-makers, researchers, and business leaders can create an enabling environment that fosters innovation and sustainable development.…”

Dynamic Capabilities and Competitive Advantage of Deposit Taking Savings and Credit Cooperative Societies in Nairobi City County, Kenya

“…pp:(21)(22)(23)(24)(25)(26)(27)(28)(29)(30)(31)(32)(33)(34)(35)(36)(37)(38)(39), Month: May -August 2024, Available at: https://researchbridgepublisher.com/2.3.1Review of the study Literature…”

“…Their correlational study, involving 537 companies, highlighted the value of knowledge management across organizational functions, particularly in fostering innovation and sustainability. However, the study's focus on technology-driven firms created a gap pp:(21)(22)(23)(24)(25)(26)(27)(28)(29)(30)(31)(32)(33)(34)(35)(36)(37)(38)(39), Month: May -August 2024, Available at: https://researchbridgepublisher.com/…”

“…International Journal of Social Science and Humanities Research, Vol. 2, Issue 2, pp:(21)(22)(23)(24)(25)(26)(27)(28)(29)(30)(31)(32)(33)(34)(35)(36)(37)(38)(39), Month: May -August 2024, Available at: https://researchbridgepublisher.com/ SD=0.36), the SACCO members communicate well not only with their department members but also with other department members (M=4.55, SD=0.45), the SACCO uses knowledge management to widen the array of products without increasing costs (M=4.52, SD=0.58) and this organization is able to locate and apply knowledge to changing competitive conditions (M=4.51, SD=0.89). The finding concurs with Usman and Fadhilah (2020) research on knowledge management practice for competitive advantage through innovation.…”