FACTORS STRENGTHENING SMEs’ INNOVATION PERFORMANCE: INSIGHTS FROM THE EMERGING ECONOMY

Abstract

According to the resource-based view (RBV), innovation performance is a crucial element in enhancing the competitiveness of small and medium enterprises (SMEs) in the era of global competition and digitalization. This study aims to analyze the effect of learning organisation, business experience, government support, and academia support on SME’s innovation performance within the triple helix framework. A quantitative approach was used by applying a survey questionnaire of SME actors from various business sectors in Central Java and obtaining 121 data sets. Employing partial least squares structural equation modeling (PLS-SEM), the results of the study indicate that learning organisations and government support have a positive and significant effect on innovation performance. This finding is consistent with most previous research findings (Cabrilo & Dahms, 2020; Acs et al., 2009; Zeng et al., 2010; Widyani et al., 2022). Additionally, business experience and academic support have no effect. The practical implications of this study are the need for policies that encourage innovation and improve the quality of interaction between SMEs, the government, and higher education institutions.