Innovation as A Driver of SMEs Sustainability: A Systematic Review of the Literature

Nuri Latifannisa, Yunia Wardi, Marwan Marwan

Abstract


One interesting area of research is innovation for the sustainability of Small and Medium Enterprises (SMEs), which in recent years has increasingly attracted the attention of economists.  This paper is a literature review of several articles on the application of innovation to encourage SME sustainability. The purpose of this paper is to ensure that technological innovation, process innovation, and production innovation as an integrated way to drive SME sustainability are most widely used in the literature. Especially with regard to SME sustainability. Based on a comprehensive review of innovation variables with systematic literature review methods, the search yielded 25 articles from journal publications indexed in ScienceDirect. The results concluded that product innovation can create significant added value and open up new market opportunities, while marketing innovation and business models can increase customer reach and adaptability of SMEs to a dynamic business environment. So that product innovation, marketing, and business models can be applied so that they can encourage the sustainability of SMEs. Government policy support, access to financing, and strategic partnerships are critical factors for the success of this innovation initiative, which overall improves the competitiveness and viability of SMEs.


Keywords


Technology Innovation, Process Innovation, Production Innovation, SME Sustainability

Full Text:

PDF

References


Achmad, G. N., Yudaruddin, R., Nugroho, B. A., Fitrian, Z., Suharsono, S., Adi, A. S., Hafsari, P., & Fitriansyah, F. (2023). Government support, eco-regulation and eco-innovation adoption in SMEs: The mediating role of eco-environmental. Journal of Open Innovation: Technology, Market, and Complexity, 9(4), 100158. https://doi.org/10.1016/j.joitmc.2023.100158

Artin, P. (2022). Critical sustainability factors of regional SMEs; A case study of regional Australia. Current Research in Environmental Sustainability, 4(December 2021), 100138. https://doi.org/10.1016/j.crsust.2022.100138

Avelar, S., Borges-Tiago, T., Almeida, A., & Tiago, F. (2024). Confluence of sustainable entrepreneurship, innovation innovation, and digitalization in SMEs. Journal of Business Research, 170(October 2023). https://doi.org/10.1016/j.jbusres.2023.114346

Battistella, C., Ferraro, G., & Pessot, E. (2023). Technology transfer services impact the open innovation capabilities of SMEs. Technological Forecasting and Social Change, 196(November 2022), 122875. https://doi.org/10.1016/j.techfore.2023.122875

Bertolini, M., Leali, F., Mezzogori, D., & Renzi, C. (2023). A Keyword, Taxonomy and Cartographic Research Review of Sustainability Concepts for Production Scheduling in Manufacturing Systems. Sustainability (Switzerland), 15(8). https://doi.org/10.3390/su15086884

Bhatti, S. H., Rashid, M., Arslan, A., Tarba, S., & Liu, Y. (2023). Servitized SMEs’ performance and the influences of sustainable procurement, packaging, and distribution: The mediating role of eco-innovation. Technovation, 127(December 2022), 102831. https://doi.org/10.1016/j.technovation.2023.102831

Chatterjee, S., Chaudhuri, R., Shah, M., & Maheshwari, P. (2022). Big data-driven innovation for sustaining SME supply chain operation in post COVID-19 scenario: The moderating role of SME technology leadership. Computers and Industrial Engineering, 168(March), 108058. https://doi.org/10.1016/j.cie.2022.108058

Chatzistamoulou, N. (2023). Is digital transformation the Deus ex Machina toward the sustainability transition of European SMEs? Ecological Economics, 206(August 2022), 107739. https://doi.org/10.1016/j.ecolecon.2023.107739

Costa, A., Crupi, A., De Marco, C. E., & Di Minin, A. (2023). SMEs and open Innovationinnovation: Challenges and costs of engagement. Technological Forecasting and Social Change, 194(June), 122731. https://doi.org/10.1016/j.techfore.2023.122731

Facchinetti, T., Benetti, G., Giuffrida, D., & Nocera, A. (2022). SLR-kit: A semi-supervised machine learning framework for systematic literature reviews. Knowledge-Based Systems, 251, 109266. https://doi.org/10.1016/j.knosys.2022.109266

Gallina, V., Steinwender, A., Zudor, E., Preuveneers, D., & Schlund, S. (2024). Business model development concept for SMEs in the era of twin transition. Procedia Computer Science, 232(2023), 523–532. https://doi.org/10.1016/j.procs.2024.01.052

Gonçalves, L., Faccin, K., Garay, J., Zarpelon, F., & Balestrin, A. (2024). The development of Innovation innovation and entrepreneurial ecosystems in cities: An institutional work approach. Cities, 146, 104747. https://doi.org/10.1016/j.cities.2023.104747

Haruna, A., Oumbé, H. T., Kountchou, A. M., & Pilag Kakeu, C. B. (2024). Can Islamic finance enhance the innovation capacity of Cameroonian SMEs? Empirical evidence based on a multivariate probit approach. Borsa Istanbul Review, 24(1), 187–200. https://doi.org/10.1016/j.bir.2023.11.006

Hasan, M. J., & Rahman, M. S. (2023). Determinants of eco-innovation initiatives toward sustainability in manufacturing SMEs: Evidence from Bangladesh. Heliyon, 9(7), e18102. https://doi.org/10.1016/j.heliyon.2023.e18102

Henriquez-Calvo, L., & Diaz-Martinez, K. (2023). The Importance of Strategic Thinking and Innovation for the Growth of SMEs: Case of the Colombian SMEs. Procedia Computer Science, 224, 495–501. https://doi.org/10.1016/j.procs.2023.09.071

Hidayat-ur-Rehman, I., & Alsolamy, M. (2023). A SEM-ANN analysis to examine sustainable performance in SMEs: The moderating role of transformational leadership. Journal of Open Innovation: Technology, Market, and Complexity, 9(4), 100166. https://doi.org/10.1016/j.joitmc.2023.100166

Jiang, H., Yang, J., & Gai, J. (2023). How digital platform capability affects the innovation performance of SMEs—Evidence from China. Technology in Society, 72(May 2022), 102187. https://doi.org/10.1016/j.techsoc.2022.102187

Jing, H., Zhang, Y., & Ma, J. (2023). Influence of digital ambidextrous capabilities on SMEs’ transformation performance: The mediating effect of business model innovation. Heliyon, 9(11), e21020. https://doi.org/10.1016/j.heliyon.2023.e21020

Kilay, A. L., Simamora, B. H., & Putra, D. P. (2022). The Influence of E-Payment and E-Commerce Services on Supply Chain Performance: Implications of Open Innovation and Solutions for the Digitalization of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 119. https://doi.org/10.3390/joitmc8030119

Kononova, N., Juraschek, M., Kohlgrüber, M., & Herrmann, C. (2024). Advanced Sustainability Action Plan: Supporting manufacturing SMEs on a sustainability pathway. Procedia CIRP, 122, 354–359. https://doi.org/10.1016/j.procir.2024.01.052

Lin, M. S., Sharma, A., Pan, B., & Quadri-Felitti, D. (2023). Information asymmetry in the innovation adoption decision of tourism and hospitality SMEs in emerging markets: A mixed-method analysis. Tourism Management, 99, 104793. https://doi.org/10.1016/j.tourman.2023.104793

Lutfillah, N. Q., Hapsari, A. P., & Candrawati, T. (2024). Determinants of Students’ Decisions to Use Paylater

Digital Financial Products. BASKARA : Journal of Business and Entrepreneurship, 7(1), 42–54. https://doi.org/10.54268/baskara.v7i1.23263

Maziliauske, E. (2024). Innovation for sustainability through co-creation by small and medium-sized tourism enterprises (SMEs): Socio-cultural sustainability benefits to rural destinations. Tourism Management Perspectives, 50(January 2023), 101201. https://doi.org/10.1016/j.tmp.2023.101201

Menne, F., Surya, B., Yusuf, M., Suriani, S., Ruslan, M., & Iskandar, I. (2022). Optimizing the Financial Performance of SMEs Based on Sharia Economy: Perspective of Economic Business Sustainability and Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 18. https://doi.org/10.3390/joitmc8010018

Münter, M. T. (2024). Resource-Based View. In Reference Module in Social Sciences. Elsevier. https://doi.org/10.1016/B978-0-443-13701-3.00203-6

Namirembe, G., Mukwaya, P. I., Mugagga, F., & Kisira, Y. (2024). Insights into home biogas technology adoption dynamics through the lens of the diffusion of innovation theory in Uganda. Energy for Sustainable Development, 80, 101425. https://doi.org/10.1016/j.esd.2024.101425

Nugraha, D. P., Setiawan, B., Nathan, R. J., & Fekete-Farkas, M. (2022). Fintech Adoption Drivers for Innovation for SMEs in Indonesia. Journal of Open Innovation: Technology, Market, and Complexity, 8(4), 208. https://doi.org/10.3390/joitmc8040208

Ozturk, I., Alqassimi, O., & Ullah, S. (2024). Digitalization and SMEs development in the context of sustainable development: A China perspective. Heliyon, 10(6), e27936. https://doi.org/10.1016/j.heliyon.2024.e27936

Peretz-Andersson, E., Tabares, S., Mikalef, P., & Parida, V. (2024). Artificial intelligence implementation in manufacturing SMEs: A resource orchestration approach. International Journal of Information Management, 77(April), 102781. https://doi.org/10.1016/j.ijinfomgt.2024.102781

Perramon, J., Bagur-Femenías, L., Alonso-Almeida, M. del M., & Llach, J. (2024). Does the transition to a circular economy contribute to business resilience and transformation? Evidence from SMEs. Journal of Cleaner Production, 453(April), 142279. https://doi.org/10.1016/j.jclepro.2024.142279

Qian, K., Liang, X., & Liu, X. (2023). Managerial ability, managerial risk-taking, and innovation performance. Finance Research Letters, 57, 104193. https://doi.org/10.1016/j.frl.2023.104193

Radicic, D., & Petković, S. (2023). Impact of digitalization on technological innovations in small and medium-sized enterprises (SMEs). Technological Forecasting and Social Change, 191(December 2022). https://doi.org/10.1016/j.techfore.2023.122474

Ragazou, K., Passas, I., Garefalakis, A., & Dimou, I. (2022). Investigating the Research Trends on Strategic Ambidexterity, Agility, and Open Innovation in SMEs: Perceptions from Bibliometric Analysis. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 118. https://doi.org/10.3390/joitmc8030118

Rauch, E., & Brown, C. A. (2020). Teaching Axiomatic Design for a Long-Term Sustainable Introduction of Industry 4.0 in SMEs. Procedia CIRP, 96(March), 169–174. https://doi.org/10.1016/j.procir.2021.01.155

Rodríguez-Rebés, L., Ibar-Alonso, R., Gómez, L. M. R., & Navío-Marco, J. (2024). The use and drivers of organizational eco-innovation in European SMEs. Research in International Business and Finance, 70(July 2022). https://doi.org/10.1016/j.ribaf.2024.102297

Rumanti, A. A., Rizana, A. F., & Achmad, F. (2023). Exploring the role of organizational creativity and open innovation in enhancing SMEs' performance. Journal of Open Innovation: Technology, Market, and Complexity, 9(2), 100045. https://doi.org/10.1016/j.joitmc.2023.100045

Saeedikiya, M., Salunke, S., & Kowalkiewicz, M. (2024). Toward a dynamic capability perspective of digital transformation in SMEs: A study of the mobility sector. Journal of Cleaner Production, 439(September 2023), 140718. https://doi.org/10.1016/j.jclepro.2024.140718

Salvador, R., Søberg, P. V., Jørgensen, M. S., Schmidt-Kallesøe, L. L., & Larsen, S. B. (2023). Explaining sustainability performance and maturity in SMEs – Learnings from a 100-participant sustainability innovation project. Journal of Cleaner Production, 419(July). https://doi.org/10.1016/j.jclepro.2023.138248

Sohns, T. M., Aysolmaz, B., Figge, L., & Joshi, A. (2023). Green business process management for business sustainability: A case study of manufacturing small and medium-sized enterprises (SMEs) from Germany. Journal of Cleaner Production, 401(March), 136667. https://doi.org/10.1016/j.jclepro.2023.136667

Surya, B., Menne, F., Sabhan, H., Suriani, S., Abubakar, H., & Idris, M. (2021). Economic Growth, Increasing Productivity of SMEs, and Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 7(1), 20. https://doi.org/10.3390/joitmc7010020

Vasi, M., Sansone, G., & English, V. (2024). Exogenous crises and SMEs resilience: The Dynamic Open Innovation Funnel. Technovation, 129, 102886. https://doi.org/10.1016/j.technovation.2023.102886

Zhang, H. (2022). Does combining different types of innovation always improve SME performance? An analysis of innovation complementarity. Journal of Innovation and Knowledge, 7(3), 100192. https://doi.org/10.1016/j.jik.2022.100192

Zheng, L. J., Zhang, J. Z., Yee Sum Lee, L., Jasimuddin, S. M., & Mustafa Kamal, M. (2024). Digital technology integration in business model innovation for carbon neutrality: An evolutionary process model for SMEs. Journal of Environmental Management, 359, 120978. https://doi.org/10.1016/j.jenvman.2024.120978




DOI: https://doi.org/10.54268/baskara.v7i2.26893

Refbacks

  • There are currently no refbacks.


Copyright (c) 2025 BASKARA : Journal of Business and Entrepreneurship

BASKARA: Journal of Business and Entrepreneurship
Indexed By:

Sinta Dikti Garuda Google Scholar Dimensions.ai E-ISSN Official for BASKARA

Copyright of Baskara: Journal of Business and Entrepreneurship (e-ISSN: 2623-0089 ).

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Powered by Puskom-UMJ