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Innovation as recovery strategy for SMEs in emerging economies during the COVID-19 pandemic.

ABSTRACT: The quarantine and disruption of non-essential activities as measure to contain the COVID-19 pandemic has negatively affected all economies around the World. This has had a deeper impact on small and medium enterprises (SMEs) in emerging economies because they have very limited resources and vulnerable supply chain and business-to-business/business-to-clients relationships. In this context, it is expected that after the pandemic many of these enterprises will disappear as the "new normality" will require changes in business and infrastructure management. To reduce this risk, innovation is identified as a key aspect of business recovery in the ongoing and post-COVID-19 pandemic period. This work presents a multidisciplinary methodological approach to guide these enterprises to innovate their products for new markets and making a better use of their limited available resources. As an example of this approach, the research-supported development of a new product for a family-owned SME was performed in a zone with high COVID-19 risk. The results provide insight regarding innovation as a survival tool for SMEs during and after the COVID-19 contingency, and the use of digital resources is identified as the main facilitator for networking and research-based design of innovative products within the "social distance" context.

SUBMITTER: Caballero-Morales SO

PROVIDER: S-EPMC7857984 | biostudies-literature |

REPOSITORIES: biostudies-literature

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Project description:Background: Written batik is one of Indonesia's cultural heritages that must be preserved. During the Covid-19 pandemic, written batik producers in Indonesia experienced increasing challenges due to the uncertainty of the business environment. Innovation is a solution to the problems faced by SMEs during a pandemic to survive. This study aims to examine the effect of entrepreneurship orientation on innovation capability. This study also examines the role of moderating environmental uncertainty in strengthening the effect of entrepreneurship orientation on innovation capability. Methods: The research was conducted at the centre of small and medium-sized batik companies Giriloyo, Bantul, Yogyakarta, Indonesia. Respondents of this study were 130 small and medium companies selected by random sampling. The questionnaire is used as a primary data collection tool. WarpPLS has been used to analyze the effect between variables in this study. Results: Entrepreneurship orientation is an important aspect in improving the innovation capabilities of SMEs. Environmental uncertainty during the COVID-19 pandemic has strengthened the effect of entrepreneurship orientation on innovation capabilities. Conclusions: The findings of this study indicate that entrepreneurship orientation has a significant effect on innovation capabilities. Environmental uncertainty significantly strengthens the effect of entrepreneurship orientation on innovation capability.

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