Influence Orientation Entrepreneurship and Innovation on MSME Performance with Superiority Compete Sustainable as Variables Mediation
Abstract
This study examines how entrepreneurial orientation and innovation affect MSME performance through sustainable competitive advantage among MSMEs registered in the SMESCO ecosystem. The research responds to inconsistent empirical findings on whether entrepreneurial orientation and innovation improve performance directly or through competitive mechanisms. Its novelty lies in testing an integrative SMESCO-based model that positions sustainable competitive advantage as a mediator in a structured SEM-PLS framework. A quantitative explanatory design was applied using a survey of 100 MSME owners and managers selected through purposive quota sampling. Data were collected using a five-point Likert questionnaire and analyzed with SmartPLS 4. The results show that entrepreneurial orientation has a positive and significant effect on performance. Innovation also has a positive and significant effect on performance and sustainable competitive advantage. Sustainable competitive advantage positively affects performance, but it does not significantly mediate the effect of entrepreneurial orientation and innovation on performance. These findings indicate that innovation is the most important driver for strengthening MSME outcomes, while long-term competitiveness requires more structured product differentiation, brand development, quality consistency, and customer retention strategies. Practically, SMESCO-assisted MSMEs need to convert innovative activities into measurable market value and sustainable strategic positioning.
Keywords:
innovation , excellence compete sustainable , MSME performance , orientation entrepreneurship , SMESCO
References
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Tong, T., Yu, E., & Yang, S. (2022). Effect of innovation orientation of high-tech SMEs on enterprise innovation performance. Sustainability, 14(14), 8469. https://doi.org/10.3390/su14148469
Yaskun, M., Sudarmiatin, S., Hermawan, A., & Rahayu, W. P. (2023). The effect of market orientation, entrepreneurial orientation, innovation and competitive advantage on business performance of Indonesian MSMEs. International Journal of Professional Business Review, 8(4), e01563. https://doi.org/10.26668/businessreview/2023.v8i4.1563
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Tong, T., Yu, E., & Yang, S. (2022). Effect of innovation orientation of high-tech SMEs on enterprise innovation performance. Sustainability, 14(14), 8469. https://doi.org/10.3390/su14148469
Yaskun , M., Sudarmiatin , S., Hermawan, A., & Rahayu, WP (2023). The effect of market orientation, entrepreneurial orientation, innovation and competitive advantage on business performance of Indonesian MSMEs. International Journal of Professional Business Review, 8(4), e01563. https://doi.org/10.26668/businessreview/2023.v8i4.1563
Yuliana, I., Alpiansah , R., & Pratama, AA (2024). Culinary SME performance: Marketing capability, entrepreneurial orientation, competitive advantage and product innovation. Journal Scientific Edunomics, 8(1). https://doi.org/10.29040/jie.v8i1.12706
Arsawan, I. W. E., Koval, V., Rajiani, I., Rustiarini, N. W., Supartha, W. G., & Suryantini, N. P. S. (2020). Leveraging knowledge sharing and innovation culture into SMEs sustainable competitive advantage. International Journal of Productivity and Performance Management. https://doi.org/10.1108/IJPPM-04-2020-0192
Aswar, R. N., Setiawan, B., & Maulidah, S. (2025). Pengaruh orientasi kewirausahaan sustainable business performance UMKM keripik di Kabupaten Malang melalui competitive advantage sebagai variabel intervening. Jurnal Ekonomi Pertanian dan Agribisnis, 9(2), 678–691. https://doi.org/10.21776/ub.jepa.2025.009.02.21
Devi, N. P. C., Dahmiri, D., & Ihsan, M. (2025). Pengaruh kompetensi kewirausahaan dan orientasi kewirausahaan terhadap kinerja usaha dimediasi keunggulan bersaing pada usaha milenial kopi keliling di Kota Jambi. Jurnal Ilmiah Global Education, 6(2), 744–760. https://doi.org/10.55681/jige.v6i2.3740
Direktorat Jenderal Perbendaharaan Kementerian Keuangan Republik Indonesia. (2024). UMKM hebat, perekonomian nasional meningkat. Kementerian Keuangan Republik Indonesia. https://djpb.kemenkeu.go.id/kppn/curup/id/data-publikasi/artikel/2885-umkm-hebat%2C-perekonomian-nasional-meningkat.html
Fang, G. G., Qalati, S. A., Ostic, D., Shah, S. M. M., & Mirani, M. A. (2022). Effects of entrepreneurial orientation, social media, and innovation capabilities on SME performance in emerging countries: A mediated-moderated model. Technology Analysis & Strategic Management, 34(11), 1326–1338. https://doi.org/10.1080/09537325.2021.1957816
Fu, Q., Sial, M. S., Arshad, M. Z., Comite, U., Thu, P. A., & Popp, J. (2021). The inter-relationship between innovation capability and SME performance: The moderating role of the external environment. Sustainability, 13(16), 9132. https://doi.org/10.3390/su13169132
Ha, S. T., Lo, M. C., & Wang, Y. C. (2021). Knowledge management process, entrepreneurial orientation, and performance in SMEs. Sustainability, 13(17), 9791. https://doi.org/10.3390/su13179791
Hair, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling using R: A workbook. Springer. https://doi.org/10.1007/978-3-030-80519-7
Iqbal, S., Moleiro Martins, J., Nuno Mata, M., Naz, S., Akhtar, S., & Abreu, A. (2021). Linking entrepreneurial orientation with innovation performance in SMEs. Sustainability, 13(8), 4361. https://doi.org/10.3390/su13084361
Kementerian Koperasi dan UKM Republik Indonesia. (2024). Inovasi membentuk UMKM & koperasi masa depan: Buku serial pengarusutamaan strategi pengembangan koperasi dan UKM. Kementerian Koperasi dan UKM RI.
Kiyabo, K., & Isaga, N. (2020). Entrepreneurial orientation, competitive advantage, and SMEs’ performance: Application of firm growth and personal wealth measures. Journal of Innovation and Entrepreneurship, 9, Article 12. https://doi.org/10.1186/s13731-020-00123-7
Mostafiz, M. I., Hughes, M., & Sambasivan, M. (2022). Entrepreneurial orientation, competitive advantage and strategic knowledge management capability in Malaysian family firms. Journal of Knowledge Management, 26(2), 423–458. https://doi.org/10.1108/JKM-09-2020-0693
Otache, I. (2024). Innovation capability, strategic flexibility and SME performance: The roles of competitive advantage and competitive intensity. African Journal of Economic and Management Studies, 15(2), 248–262. https://doi.org/10.1108/AJEMS-06-2023-0221
Rahayu, S., Syafe’i, D., Dahlia, D., Wiranata, H., & Sari, P. I. (2025). Inovasi produk sebagai mediasi pengaruh orientasi pasar dan orientasi kewirausahaan terhadap kinerja UMKM. Jesya: Jurnal Ekonomi & Ekonomi Syariah, 8(2), 1440–1457. https://doi.org/10.36778/jesya.v8i2.2184
Sakib, M. N., Rabbani, M. R., Hawaldar, I. T., Bashar, A., & Shaik, M. (2022). Entrepreneurial competencies and SMEs’ performance in a developing economy. Sustainability, 14(20), 13643. https://doi.org/10.3390/su142013643
Sánchez-García, E., Marco-Lajara, B., Seva-Larrosa, P., & Martínez-Falcó, J. (2022). Driving innovation by managing entrepreneurial orientation, cooperation and learning for the sustainability of companies. Sustainability, 14(24), 16978. https://doi.org/10.3390/su142416978
Saputra, D. R., Syahyono, S., Siwi, D. A. I., & Rosidin, K. Q. (2025). Pengaruh inovasi terhadap kinerja bisnis UMKM mie ayam dengan keunggulan bersaing sebagai variabel mediasi. eCo-Fin: Economics and Financial, 7(2), 586–596. https://doi.org/10.32877/ef.v7i2.2079
SMESCO Indonesia. (2026). UMKM terdaftar. SMESCO Indonesia. https://smesco.go.id/
Tantriana, D., & Bramayudha, A. (2025). Enhancing the performance of pesantren-based business units through entrepreneurial orientation: The mediating role of competitive advantage. Jurnal Manajemen dan Inovasi (MANOVA), 8(2), 149–157. https://doi.org/10.15642/manova.v8i2.2168
Tong, T., Yu, E., & Yang, S. (2022). Effect of innovation orientation of high-tech SMEs on enterprise innovation performance. Sustainability, 14(14), 8469. https://doi.org/10.3390/su14148469
Yaskun, M., Sudarmiatin, S., Hermawan, A., & Rahayu, W. P. (2023). The effect of market orientation, entrepreneurial orientation, innovation and competitive advantage on business performance of Indonesian MSMEs. International Journal of Professional Business Review, 8(4), e01563. https://doi.org/10.26668/businessreview/2023.v8i4.1563
Yuliana, I., Alpiansah, R., & Pratama, A. A. (2024). Culinary SME performance: Marketing capability, entrepreneurial orientation, competitive advantage and product innovation. Jurnal Ilmiah Edunomika, 8(1). https://doi.org/10.29040/jie.v8i1.12706
Tong, T., Yu, E., & Yang, S. (2022). Effect of innovation orientation of high-tech SMEs on enterprise innovation performance. Sustainability, 14(14), 8469. https://doi.org/10.3390/su14148469
Yaskun , M., Sudarmiatin , S., Hermawan, A., & Rahayu, WP (2023). The effect of market orientation, entrepreneurial orientation, innovation and competitive advantage on business performance of Indonesian MSMEs. International Journal of Professional Business Review, 8(4), e01563. https://doi.org/10.26668/businessreview/2023.v8i4.1563
Yuliana, I., Alpiansah , R., & Pratama, AA (2024). Culinary SME performance: Marketing capability, entrepreneurial orientation, competitive advantage and product innovation. Journal Scientific Edunomics, 8(1). https://doi.org/10.29040/jie.v8i1.12706
Published
2026-06-01
How to Cite
Iqbal, M., & Asmara, R. (2026). Influence Orientation Entrepreneurship and Innovation on MSME Performance with Superiority Compete Sustainable as Variables Mediation. Jesya, 9(2), 842-857. https://doi.org/https://doi.org/10.36778/jesya.v9i2.2742
Section
Articles
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
