The sustainable competitive advantage of SMEs towards Intellectual Capital: the role of technology adoption and strategic flexibility

Abstract

Purpose: This study examines sustainable competitive advantage in the SME sector, which consists of three determinant factors: business performance, open innovation, and intellectual capital. It also extends the accepted procedure to include the effects of technology adoption and strategic flexibility.

Design/methodology/approach: The target sample consisted of 210 export SMEs in Bali, Indonesia. This study employs a self-administered questionnaire distributed to managers and key employees, with 630 surveys successfully collected and PLS-SEM used to analyze the data.

Findings: This study corroborates the notion that intellectual capital is crucial in building sustainable competitive advantage. Further, these results also highlight the roles of technology adoption and strategic flexibility as strategic factors that reinforce intellectual capital and indirectly affect sustainable competitive advantage. The results of this study present an insightful understanding to theorists and managers regarding how the sustainable competitive advantage of SMEs faces global competition.

Originality/value: This paper is the first study to integrate technology adoption and strategic flexibility to enhance a sustainable competitive advantage-based performance model in the SME sector.

Research limitations/implications: The primary limitation involves the data collected from SMEs in Indonesia. Given the difference in SME managers’ attitudes and behaviors, the findings of this study are most likely not able to be generalized.

Practical implications: SME managers are required to offer employees opportunities to transmit their knowledge into great ideas. Consequently, managers are to innovate constantly, using relationships to obtain knowledge, creating unique knowledge for the organization, and meeting market expectations.