Digital Technology for MSME Innovation and Sustainability: Toward a Management Framework
DOI:
https://doi.org/10.69569/jip.2026.392xKeywords:
Digital technology enablement, Innovation management, Sustainability, MSMEs, Mixed-method researchAbstract
This study examined the role of digital technology enablement in linking innovation management practices to the sustainability of micro, small, and medium enterprises (MSMEs) in a regional context. Despite the growing importance of digital transformation, limited evidence exists on how digital technology strengthens the relationship between innovation management and business sustainability among MSMEs. The study aimed to determine the level of digital technology enablement, innovation management practices, and sustainability, as well as to assess the mediating effect of digital technology on the relationship between innovation management and sustainability. A mixed-method research design was employed using survey data from randomly selected MSMEs and key informant interviews. Results showed that MSMEs exhibited low adoption of e-commerce and cloud computing but effectively utilized social media, digital marketing, and human resource systems. Innovation management was strong in sensing and seizing opportunities but weak in transforming practices, while sustainability was high in economic performance but relatively low in environmental and social dimensions. Mediation analysis confirmed that digital technology significantly strengthened the positive influence of innovation management on sustainability. The findings highlight the need to enhance digital capabilities and innovation practices through government-supported training and development programs to achieve balanced and sustainable MSME growth.
Downloads
References
Al Nuaimi, F.M.S., Singh, S.K., & Ahmad, S.Z. (2024). Open innovation in SMEs: A dynamic capabilities perspective. Journal of Knowledge Management, 28(2), 484–504. https://doi.org/10.1108/JKM-11-2022-0906
Al-Okaily, M.A., Al-Okaily, A., Shiyyab, F., & Masadah, W. (2022). Accounting information system effectiveness from an organizational perspective: Evidence from small and medium-sized enterprises. Information Development, 38(3), 453–472.
Alshurideh, H., Al Kurdi, B., AlHamad, A.Q., Salloum, S.A., Arpaci, I., & Al-Emran, M. (2022). The effect of digital human resource management on organizational performance: Evidence from SMEs. Sustainability, 14(18), 11424. https://doi.org/10.3390/su141811424
Asad, M., Asif, M.U., & Sulaiman, M.A.B.A. (2023). Open innovation: The missing nexus between entrepreneurial orientation, total quality management, and performance of SMEs. Journal of Innovation and Entrepreneurship, 12, 79. https://doi.org/10.1186/s13731-023-00335-7
Asian Development Bank. (2021). Asia Small and Medium-Sized Enterprise Monitor 2021: Volume IV—Country and Regional Reviews. Asian Development Bank. https://doi.org/10.22617/FLS210322-3
Bon, A.T., Zainol, F.A., & Ali, N.A. (2023). Social media adoption and business performance of SMEs: The mediating role of customer engagement. Sustainability, 15(3), 2477. https://doi.org/10.3390/su15032477
Department of Trade and Industry. (2022). 2022 MSME Statistics.
El Ragal, A., Salem, M.A., Elbaz, A.M., & Kassem, A.E. (2022). Digital transformation and sustainability of small and medium enterprises: The mediating role of digital business model innovation. Sustainability, 14(6), 3447. https://doi.org/10.3390/su14063447
Elkington, J. (1998). Partnerships from cannibals with forks: The triple bottom line of 21st-century business. Environmental Quality Management, 8(1), 37–51. https://doi.org/10.1002/tqem.3310080106
Garad, A., Al-Ansi, A.M., & Qamari, I.N. (2021). The role of digitalization in business and management: A systematic literature review. Sustainability, 13(23), 13293. https://doi.org/10.3390/su132313293
Kraus, S., Durst, S., Ferreira, J., Veiga, P., Kailer, N., & Weinmann, A. (2022). Digital transformation in business and management research: An overview of the current status quo. International Journal of Information Management, 63, 102466. https://doi.org/10.1016/j.ijinfomgt.2021.102466
Larios-Francia, R.P., & Ferasso, M. (2023). The relationship between innovation and performance in MSMEs: The case of the wearing apparel sector in emerging countries. Journal of Open Innovation: Technology, Market, and Complexity, 9(1), 100018. https://doi.org/10.1016/j.joitmc.2023.100018
Loo, et al. (2023). Unleashing the potential: Enhancing technology adoption and innovation for micro, small and medium enterprises. Cogent Economics & Finance, 11. https://doi.org/10.1080/23322039.2023.2267748
Martini, M., Setiawan, D., Adhariani, D., Harymawan, I., & Widodo, M. (2023). E-commerce and micro and small industries performance: The role of firm size as a moderator. Journal of Open Innovation: Technology, Market, and Complexity, 9(3), 100142. https://doi.org/10.1016/j.joitmc.2023.100142
Mendoza, R., Beja, E., Venida, V., & Yap, D. (2017). Inequality in democracy: Insights from an empirical analysis of political dynasties in the Philippines. Philippine Political Science Journal, 33(2), 132–145. https://doi.org/10.1080/01154451.2012.734094
National Privacy Commission. (2012). Republic Act No. 10173: Data Privacy Act of 2012. https://privacy.gov.ph/data-privacy-act/
Nguyen, T.T., Verreynne, M.-L., Steen, J.W., & Menzies, J. (2023). Government support versus international knowledge: Investigating innovations from emerging-market small and medium enterprises. Journal of Business Research, 154, 113305. https://doi.org/10.1016/j.jbusres.2022.113305
Qalati, M.A., Li, W., Ahmed, N., Mirani, M.A., & Khan, A. (2022). Examining the factors affecting sustainable business performance among SMEs: The role of environmental sustainability practices. Sustainability, 14(18), 11440. https://doi.org/10.3390/su141811440
Qalati, M.A., Li, W., Ahmed, N., Mirani, M.A., & Khan, A. (2022). Examining the factors affecting sustainable business performance among SMEs: The role of environmental and social sustainability practices. Sustainability, 14(18), 11440. https://doi.org/10.3390/su141811440
Tassabehji, R., Hackney, R., Popovič, A., Castelli, M., & Mirza, A. (2022). Digital transformation and sustainability in small and medium-sized enterprises: A dynamic capabilities perspective. Sustainability, 14(18), 11258. https://doi.org/10.3390/su141811258
Teece, D. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350. https://doi.org/10.1002/smj.640
Teece, D. (2020). Handbook of dynamic capabilities. Edward Elgar Publishing.
Teece, D. (2021). Dynamic capabilities: What are they, and how do they matter? Journal of Management Studies, 58(1), 224–251. https://doi.org/10.1111/joms.12645
Tencati, A., Perrini, F., & Pogutz, S. (2020). New business models for sustainable entrepreneurship: Ethical values and long-term sustainability in small and medium-sized enterprises. Sustainability, 12(21), 9025. https://doi.org/10.3390/su12219025
Wang, Y., Wang, J., Yang, Y., & Ma, Y. (2022). Understanding the digital transformation of small and medium-sized enterprises: A systematic literature review. Journal of Innovation & Knowledge, 7(4), 100215. https://doi.org/10.1016/j.jik.2022.100215
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
JIP is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. Under the Open Access Policy, appropriate attribution can be provided by simply citing the original article.
