Impact of Product, Process, Organisational, and Marketing Innovation on Micro, Small and Medium Scale Enterprises' Sustainability

Abstract

Background: Rapid and efficient adoption of new business models is a key lever for improving an organisation's sustainable performance and one of the most important sources of enduring competitive edge. Nonetheless, studies show that a large number of business model innovations fail.

Objective: This study aimed to investigate how innovation, sustainability, and performance function as moderators in Micro, Small, and Medium-Scale Enterprises (MSMES).

Methodology: The study involved 100 culinary MSME actors from the twenty sub-districts of Bandar Lampung, Indonesia. To analyse the data and ascertain the correlation between variables, Smart PLS was utilised.

Results: Product, process, and organisational innovation have no impact on MSMEs' sustainability; according to statistical testing, only marketing innovation does. This suggests that the long-term survival of an MSME business, which is crucial in the culinary industry, is significantly impacted by marketing innovation. This study also reported that the performance of MSMEs has an impact on their sustainability. However, MSMES' performance has no effect on the relationship between innovation of product, process, organisation, and marketing, and their sustainability.

Conclusion: Organisations, process, and product innovation have no bearing on the sustainability of MSMEs; only marketing innovation does. This demonstrates that the culinary industry values innovation in marketing, which makes a big difference in an MSME's long-term survival.

Unique Contribution: The study has provided empirical support for its practical implications, and the findings highlight areas of emphasis for improving the sustainability and innovation of MSMES, two elements that appear to be essential for encouraging entrepreneurship and enhancing the financial circumstances of families with low incomes in developing countries, such as Indonesia, which are particularly vulnerable.

Key Recommendation: Innovation in marketing is a crucial component for businesses seeking to enhance their sustainability. It is suggested that businesses should strive to attain high innovation capabilities to achieve their goals.