Policy Recommendations for Fostering Creative Innovation and Competitive Capacity: A Case Study of Small and Medium Enterprises in Vietnam

Abstract

Background: Innovation has become a breakthrough and indispensable driving force in the development of science and technology, especially in the country's development plan. Innovation is also the key to boosting the competitiveness and sustainable development of companies.

Objective: The study examines key factors affecting the creativity and competitiveness of Vietnamese small and medium enterprises (SMEs).

Methodology: Qualitative data and interviews were collected from 30 managers across 30 companies. Quantitative data was also collected by questioning 900 managers of 900 SMEs in six major Vietnamese cities. Data were obtained via an online questionnaire and analysed using SPSS 20.0; structural equation modelling was based on Amos.

Result: Research results show five factors (including (1) Financial resources, (2) Human resources, (3) Technology and digital infrastructure, (4) Corporate governance and innovation strategy, (5) Policy and legal environment) affecting the creative innovation and competitive capacity of SMEs in Vietnam, with a significance level of five percent. Additionally, the authors provide five policy recommendations to enhance creative innovation and competitive capacity.

Conclusion: Innovation boosts SME competitiveness. Innovation, technology, and digital infrastructure correlate positively.

Unique Contribution: This study provides empirical data for understanding how to improve creative innovation theory and practice, boosting SMEs' competitiveness and earnings.

Key Recommendation: Creative innovation legislation and policies are needed to enable businesses to become more competitive and contribute value to the community. This allows firms to grasp digital transformation, crucial for promoting innovation, forming new development capacities autonomously, and achieving sustainable development goals.