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Innovation Capability and Open Innovation for Small and Medium Enterprises (SMEs) Performance: Response in Dealing with the COVID-19 Pandemic

Author

Listed:
  • Augustina Asih Rumanti

    (School of Industrial and System Engineering, Telkom University, Bandung 40257, Indonesia)

  • Afrin Fauzya Rizana

    (School of Industrial and System Engineering, Telkom University, Bandung 40257, Indonesia)

  • Lutfia Septiningrum

    (School of Information System, Telkom University, Bandung 40257, Indonesia)

  • Rocky Reynaldo

    (Faculty of Business and Economics, University of Melbourne, Melbourne, VIC 3051, Australia)

  • Mohammad Mi’radj Isnaini

    (Industrial Engineering Department, Bandung Institute of Technology, Bandung 40132, Indonesia)

Abstract

The current business environment requires every organization or company to achieve optimal performance and maintain it. Innovation capability and open innovation practices play a critical role in improving organizational performance. However, their role in improving Small and Medium Enterprises (SMEs)’s performance, especially during the COVID-19 pandemic, still needs to be identified further. Thus, this study conducts empirical research elaborating intrinsic factors of innovation capability, as well as the influence of open innovation on organizational efforts, i.e., how SMEs achieve optimal performance during the COVID-19 pandemic. In this research model, 206 respondents were gathered and given a reearch questionnaire. The respondents are the owner of batik SMEs located in several regions in Indonesia. PLS-SEM is used to test the data, and the result of this study shows that all hypotheses developed in this study are accepted, i.e., SMEs’ innovation capability and open innovation practices significantly influence financial and operational performance. The results show that in batik SMEs, the ability to innovate and open innovation, especially open entry innovation, can facilitate greater organizational performance. Therefore, batik SMEs woud benefit from initiatives and opportunities that improve their abilities in open innovation.

Suggested Citation

  • Augustina Asih Rumanti & Afrin Fauzya Rizana & Lutfia Septiningrum & Rocky Reynaldo & Mohammad Mi’radj Isnaini, 2022. "Innovation Capability and Open Innovation for Small and Medium Enterprises (SMEs) Performance: Response in Dealing with the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(10), pages 1-21, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:10:p:5874-:d:814129
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    References listed on IDEAS

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