Musytari : Jurnal Manajemen, Akuntansi, dan Ekonomi

Vol. 25 No. 7 (2026): Musytari: Neraca Manajemen, Akuntansi, dan Ekonomi, ISSN 3025-9495
Articles

STRATEGIC INNOVATION AND BUSINESS SUSTAINABILITY A STUDY OF SMALL AND MEDIUM ENTERPRISES IN INDONESIA

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  • Saksono W. Simson
Saksono W. Simson
Universal Institute of Professional Management
DOI: https://doi.org/10.2238/dmmzhr87

Published 2026-06-23

Keywords

  • strategic innovation,
  • business sustainability,
  • SMEs,
  • product innovation,
  • process innovation,
  • organizational innovation,
  • marketing innovation,
  • SEM-PLS,
  • Indonesia
    • ...More
    Less

How to Cite

STRATEGIC INNOVATION AND BUSINESS SUSTAINABILITY A STUDY OF SMALL AND MEDIUM ENTERPRISES IN INDONESIA. (2026). Musytari : Jurnal Manajemen, Akuntansi, Dan Ekonomi, 25(7). https://doi.org/10.2238/dmmzhr87

Abstract

Small and Medium Enterprises (SMEs) play a significant role in Indonesia’s economic development; however, sustaining long-term competitiveness remains a major challenge amid technological disruption, market uncertainty, and increasing sustainability demands. This study investigates the influence of strategic innovation on business sustainability among Indonesian SMEs. Strategic innovation is conceptualized through four dimensions: product innovation, process innovation, organizational innovation, and marketing innovation. Business sustainability is measured through economic, social, and environmental sustainability dimensions. A quantitative explanatory research design was employed using survey data collected from 350 SME owners and managers across various sectors in Indonesia. Data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The findings reveal that all dimensions of strategic innovation significantly and positively influence business sustainability. Marketing innovation emerged as the strongest predictor, followed by product innovation, process innovation, and organizational innovation. Strategic innovation was also found to contribute significantly to economic, social, and environmental sustainability. The results support Resource-Based View (RBV) and Dynamic Capability Theory (DCT), highlighting innovation as a strategic capability that enables SMEs to achieve sustainable competitive advantage and long-term performance. The study offers theoretical contributions to innovation and sustainability literature and provides practical implications for SME managers and policymakers.
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