Modeling the influence of green innovation on environmental sustainability of small and medium-sized enterprises: A way towards sustainable development

Abstract

Significantly tied to China's 14^th five-year plan, green innovation is a vital component of high-value growth. This study explores the impact of green innovation on the environmental sustainability of small and medium-sized companies (SMEs). The findings are based on the primary data collected from 453 Chinese SME employees via an online questionnaire survey. Structural equation modeling is utilized for data analysis purposes. Study results reveal that green innovation has a significant influence on marketing innovation and product innovation. Similarly, marketing innovation positively affects product innovation and environmental sustainability. Moreover, product innovation has a significant effect on environmental sustainability. The outcomes of this study imply that organizations in developing economies should prioritize green innovation elements in order to improve the environmental sustainability of SMEs. Study limitations and directions for future research are also discussed at the end of the study.

Keywords

Green innovation environmental sustainability green innovation culture marketing innovation product innovation small and medium-sized enterprises

Introduction

Innovation aids in adapting to change and discovering new possibilities, giving businesses a competitive advantage by helping them generate better goods and services for their customers, significantly impacting how businesses function.^1,2 Studies examining the relationship between innovation and firm size are generally interested in the consequences of enhanced environmental sustainability (ENS) and new market innovation.³ Small and medium-sized enterprises (SMEs) and bigger firms have a stronger relationship than larger ones.⁴ SMEs play an important part in today's economy due to their size and employment nature. Due to their capacity to invent new goods and processes, they significantly impact the economy in an increasingly competitive global market.^5,6 As a result, improving SMEs’ creative talents and knowledge unlocks considerable potential. Innovation is vital for competitiveness and delivers additional benefits for the efficiency and success of the private sector.⁷

Even though SMEs appear to be a hot topic today, few studies have looked at the issue from the perspective of developing economies.⁸ When looking at this notion in the context of China, it becomes clear that the importance of SMEs has been growing in the country's present market economy.⁹ Most of the SMEs in China were created during the last 30 years. Private SMEs were ultimately acknowledged as important to the country's economic success with China's opening to the market economy in the 1980s as part of Deng Xiaoping's market-oriented reforms.¹⁰ Because of the economic trends that impacted large state-owned enterprises (SOEs) till the end of 2004, SOEs in China were quickly converted into small and medium non-SOEs. Meanwhile, implementing a non-SOE marketing strategy aided the expansion of additional SMEs.¹¹ Since then, urban collective enterprises (UCEs), town and village enterprises (TVEs), as well as the private and self-employment sectors have sprouted up throughout China.

The rise of SMEs has become ever more important to China's economy's development. These SMEs do not only have a substantial part in the country's fiscal progress, accounting for about 99% of all firms, but they also largely contribute to the increased level of business activity and employment.¹² Despite this, SMEs continue to confront several obstacles in their quest for effective innovation. As a result, to improve SMEs’ ENS, it is vital to investigate the elements impacting innovation.¹³

In light of the preceding debate, this study aims to look at the link between Chinese innovation and ENS. The research will also analyze the resource-based perspective (RBV) based on Terziovski's work. Unlike prior research, this focuses on ENS as a factor in a company's success.¹⁴ This research tries to provide clear knowledge of innovation paradigms and how they generate ENS, particularly in China. The first goal is to emphasize the relevance of marketing innovation (MRK) and green innovation culture (GIC) in SMEs regarding product innovation (PRD). It is important to remember that innovation is necessary at all phases of competition and that it generates riches in the commercial sector.¹⁵ According to various studies, small businesses spend more money on product development than process development. As a result, this research is entirely concerned with the impact of PRD on ENS.¹⁶

To grow by generating new goods and services, businesses must include an innovation culture in their operations. Creativity, empowerment, and a transformation in the company culture are all catalysts for innovation. Empirical research shows that a culture of innovation must be established, maintained, and encouraged if businesses are successful and generate new goods.¹⁷ Although the literature focuses on MRK and GIC, the importance of an innovative culture and the influence of MRK on PRD have not been properly investigated in the previous study.¹⁸ The study's second goal is to determine the importance of MRK methods and PRD in attaining greater ENS. The basic thesis of this study is that MRK is required while attempting to improve ENS.¹⁹ The primary contributors to ENS are marketing and PRD strategies. Competition has become a necessary component of market survival, whereas innovation activities generate higher value and advantages, such as helping a firm stand out from its competitors.²⁰ In complicated circumstances, SMEs can effectively employ market innovation to sell distinctive products and services. According to the literature on innovation, PRD impacts performance.²¹

The study's focus is thus on the influence of creative activities, such as innovation, on ENS. This research contributes to the current body of knowledge by revealing how SMEs may succeed in PRD by cultivating a distinct innovation culture and MRK.²² It also claims that SMEs outperform large corporations in the marketplace owing to the creation of innovative marketing tactics and goods.²³ The study will take a theoretical approach to address the following research question: First, how do market and PRD activities affect SMEs’ ENS? Second, what impact does SMEs’ entrepreneurial culture have on marketing and product development? Third, how do marketing and PRD combine to impact consumer behavior?

The rest of the paper is structured a s follows: section 2 deals with research framework and hypotheses development. Section 3 reports materials and methods used in this study. Section 4 provides study results. Section 5 concludes the study while last section provides limitations and directions for future studies.

Modeling framework and study hypotheses

As mentioned earlier, innovation refers to the creation of a new method of doing anything, whether the business is physical (e.g., the manufacture of a new product) or abstract (e.g., the development of new technology.²⁴ It is important in the discovery and development of viable systems of production and living since alternatives to the current way of doing things are required in both situations.²⁵ Because innovation plays a central role in business development and progress, considerable research has been done that focuses on PRD, its role in SMEs, and market innovation.²⁶

According to some academics, SMEs’ success is influenced by several crucial aspects. According to cross-national research done by Ghosh et al.,²⁷ a successful marketing strategy, good client connections, and competent management are all aspects that contribute to the success of SMEs. Ensari and Karabay²⁸ identified seven significant aspects that influence SME's success, including the capacity to develop and sustain a technological edge; the capacity to recognize and concentrate on one or more market segments; strong top-level leadership; a major “people bonding” mechanism; a capable management team; consumers’ strategic alliance; and the strategic use of information technology. Strong leadership, a strong customer and client connection, a supportive and strong management system, the right strategy, market focus, building and maintaining capabilities, and a good customer and client relationship are six key factors that determine a firm's performance, according to a study of Singapore's top 50 SMEs.²⁹ Another research on PRD yielded insights on supporting actions for various SMEs. They presented evidence in support of three product innovativeness (PI) categories: direct mimics (low PI), product innovators (high PI), and idea innovators (high PI) (medium PI). It also demonstrates that these groups’ performance potential varied at the product level but not at the company level.³⁰ Even though most SMEs can adapt quickly to changing environments and satisfy changing customer wants, many struggles with successful innovation and are more likely than their larger counterparts to face resource and capability constraints.³¹

As a result, studies often highlight the elements that negatively influence SMEs’ market success. Tolerance for ambiguity, risk-taking, environmental strategy and scanning, heterogeneity in the organization, and professionalism in all work areas are some of the primary elements that obstruct SMEs.³⁰ It is suggested that a lack of funding and low return rates are the major hurdles. It has also been discovered that companies that prioritize research and development (R&D), staff training, and employee networking have a better likelihood of innovating.³² This has resulted in a higher number of new items, technical advancements in both processes and products, and a stronger emphasis on prototype development. All of these factors appear to indicate that the most significant impediments to SMEs’ innovation are a lack of financial resources, low return rates, high cost and risk of innovation, a lack of sufficient information, and a lack of proper training.³³ Although the importance of these criteria varies based on the type of innovation and the context, these are the ones that are frequently mentioned in the research.

China, due to its being the largest evolving economy in the world, is perhaps one of the best countries to study innovation and its associated phenomena on, in detail. The country defines SMEs are classified mostly based on the number of employees they have, which is often less than 500 in most cases.³⁴ The definition of a small business in China is complicated because it is based on several factors such as industry category, the number of employees, annual revenue, and total assets, all of which are based on the SMEs Promotion Law of China (2003), which establishes the guidelines for classifying SMEs.

Based on the things discussed above will analyze the innovation constructs that the research proposes. This study examines the relationships between MRK, culture, PRD, and ENS in Chinese small businesses. As a result, the reason for examining SMEs’ creative activities in China is supported by the fact that many SMEs from emerging countries reveal that green innovation and ENS are crucial in boosting SMEs’ success. The study analyses the research on innovation in SMEs in order to identify the relevant building blocks for enhancing a theoretical model. A resource-based perspective (RBV) is used to describe how internal resources in SMEs influence performance and foster competitiveness. The RBV is a viewpoint that looks into how superior-performing businesses assign their traits to their employees. Furthermore, the RBV can aid in gaining a deeper understanding of these enterprises’ success than other businesses.

Majority of the researchers opined that innovation-related frameworks impact the ENS of SMEs. From an innovative aspect, this method was broadened to embrace the imaginative nature of SMEs. Several studies employed several innovation-related frameworks as prospective variables for confinement in the model in this respect. The company model, competition, culture, and technology are all examples.³⁵ On the other hand, marketing and innovation are critical to many businesses success and have been recognized in several marketing and management publications. As a result, the criteria used in this study include MRK, PRD, and GIC. The study framework is constructed by categorizing innovation-related elements into three major categories and analyzing how these factors influence the ENS of SMEs.

Environmental sustainability

Environmental sustainability is responsibly interacting with the planet to maintain natural resources and avoid jeopardizing the ability for future generations to meet their needs.^36–38 Environmental sustainability can be achieved through following ways: (i) reorganizing living conditions in the form of eco-villages, eco-municipalities, and sustainable cities,^39,40 (ii) reappraising economic sectors,^41–43 (iii) developing new technologies, i.e., green technologies and renewable energy,^44–46 and (iv) making adjustments in individual lifestyles that conserve natural resources.⁴⁷

SMEs have revenues, assets, and employees that fall below a certain threshold. The criteria for defining SMEs differ by country and, in some cases, by industry (Ward, 2020). When it comes to China, the definition of SMEs is quite complex since there seems to be no set ideal. There are specific guidelines about the entire industrial sector enterprises’ total assets, including mining, electricity, water, gas, supply, and construction. However, in the case of industries, such as retail businesses, restaurants, hotels, and transportation, there seem to be no asset requirements.⁴⁸ The recommendations for the industrial sector in the case of SMEs, on the other hand, talk about having a maximum of 2000 workers and annual revenue of not more than RMB 300 million. Their total assets should be no more than RMB 400 million (Ecovis, 2021).

There are differences between how SMEs operate compared to how large enterprises function that has been extensively discussed in the literature. These differences generally arise when it comes to ownership, resource availability and limitations, decision making, and the overall size of the organization, as discussed in the paragraph above. This is also the case in China, and so is the very high percentage of failure of SMEs. As in such organizations worldwide, lack of leadership, capital constraints, and resistance to change often lead to SMEs failing too often.⁴⁹ Due to this and other market competitive aspects, SMEs are forced to focus on marketing, innovation, and increased productivity. Although SMEs in China have achieved fast and rapid growth in the last decade and have also contributed extensively to the development of the country, weak linkages, weak technological innovation, the external market, and limited financing, most of these aspects as having been discussed above, have limited the growth of SMEs.⁵⁰ This emphasizes the importance of more successful market innovation when trying to sell new items to local and worldwide markets. Here ENS refers to the relationship between market share, sales determinants, product revenue premiums, and service revenue premiums. Previous research has shown a favorable association between innovation and performance. While much of this research focused on the impact of innovation on SME performance, it looked at the impact of innovation on SME ENS very little. Consequently, this study looks at the correlation between various kinds of innovation and SMEs’ market success.

Green innovation culture

It is necessary to understand the relationship between innovation and culture because the two are very intertwined and dependent on one another.^51,52 Innovation is a process through which a domain, a product, or an item is renewed and brought up by using certain techniques, applying new processes, or incorporating new ideas and concepts. However, the introduction of an innovative product or any innovation and its application is not easy unless there exists a culture that supports it. Green innovation in generally takes place if companies follow certain practices such as discovering new markets instead of competing rigidly with a few competitors, diversifying both the workplace and the product, taking input from several sources, i.e., focusing on creativity from a crowd instead of just internal solutions, creating a free space where employees feel comfortable enough to bring up ideas and lastly motivating and appreciating innovation.

The innovation culture in China has led to it becoming a hub for SMEs in the world, in addition to becoming the largest emerging economy. China's innovation may be divided into two categories. The government is largely responsible for technical innovation through its support of enterprises through supportive and facilitative policies. This covers projects like space deep-seated sea research, quantum computing advancements, and many others. Another thread is technology-enabled commercial innovation.⁵³ Factors such as low resistance to change and high entrepreneurial activities also seem very high in probability in the country, further contributing to its innovation culture. As a result, SMEs in China have identified new tactics for establishing new channels and adopting new ways of selling a product that customers appreciate.⁵⁴ SMEs can get a competitive advantage when it comes to enhancing productivity and marketing methods, as well as obtaining desired outcomes, as a result of their improved innovation culture. As a result, the literature establishes a strong correlation between innovation culture and marketing.

H_1a: GIC positively influence the MRK of SMEs

Scholars also highlight the influence that GIC has on PRD in SMEs. Hence, to discuss this particular relationship:

H_1b: GIC positively influence the PRD of SMEs

Marketing innovation

Marketing refers to a process through which customers are informed about the products or services an organization offers them. It brings tremendous value to an organization's sales and innovation success. Most of the innovative procedures that lead to the success of new products in the market are covered by MRK. Thus, innovation and marketing must at all times go hand in hand. While innovation helps develop products by anticipating the buyer's needs and how they may evolve or change in the future, in MRK, customers’ value judgments must be evaluated, and possibilities for unmet consumer demands must be identified so that firms may deliver new inventive goods.

PRD is important in marketing because it not only attracts new customers through the promise of something new and better but also enlarges product categories and segments. Thus, a positive relationship is generally seen between MRK and PRD. SMEs in China is known for innovation in their marketing tactics because of the fierce domestic and international competition.⁵⁵ Due to the wide range and variety of products available, companies must constantly develop new and better marketing tactics to make their product stand out and known in the market. This not only empowers a product, even if it is cheap and of low quality, but also increases its reach. We can hypothesize the following based on the strong association between marketing and PRD:

H_2a: MRK positively influence the PRD of SMEs

Similarly, establishing a solid link between MRK and ENS is simple since innovation in marketing leads to the attraction of new customers while still holding the interest of the previous ones; thus, positively influencing ENS.⁵⁶ Hence it can be hypothesized that:

H_2b: MRK positively influence the ENS of SMEs

Product innovation

While innovation can be regarded in many different forms, the focus will be on PRD for this particular part of the paper. PRD is generally associated with introducing a newer and better version of a product in a market, keeping in mind the present and upcoming needs of the consumer base. PRDs are ideally suited for new businesses entering the market since they help gain market share, enhance profitability, and favorably influence the organization's ENS.⁵⁷

China is well known for its PRD ventures, most prominently due to the Chinese government's continued stress on evolving technology in products, including its research and development (R&D) spending, which was around 42$ of the US level in 2014.⁵⁸ SMEs in China adopt various methods and techniques to ensure and later implement PRD, including cost, process, and technological innovation. When seen in a larger context, China has created a very small number of novel product inventions. However, Chinese enterprises are shifting from incremental to radical breakthroughs based on their tremendous experience with incremental advances. To further study this relation, we have come up with another hypothesis:

H₃: PRD positively influence the ENS of SMEs

Figure 1 represents the research framework of the study.

Materials and methods

Data collection

This paper collected primary data to study the hypotheses discussed above. For this purpose, we conducted an online questionnaire survey. Administrators, proprietors, marketers, and R&D managers from small-sized enterprises are among the attendees, and they are in charge of applying creative techniques in their businesses. Five hundred sixty-seven individuals from different SMEs were invited to participate in the survey, with 453 respondents finishing the survey in its entirety, for a response rate of 79.8 percent. The research goal was explained to all respondents who participated in the survey.

There are numerous reasons to concentrate on SMEs in particular. This is because they play an important role in global economic development and wealth accumulation. Moreover, small enterprises promote job creation, resulting in the most dynamic environment in growing markets. Overall, creative activities give SMEs the skills they need to reduce product life cycles, boost survival chances, and compete and move forward in a competitive environment. This is true, particularly in emerging economies, where small enterprises have little resources and find innovation to be an expensive task.

Sample and selection of respondents

For the entire sample, business owners made up 36.4 percent of the sample, while 26.4 percent of the sample had less than five years of experience. Small businesses account for around 74.6% of the organizations surveyed, with 1 to 50 employees (in terms of the number of people that work there). (Table 1)

Table 1.

Sample characteristics.

Characteristics	Frequency
Position within the company
Business owner	36.4
Other	21.3
Board of directors	24
HRM Manager	10.6
Marketing Manager	5.2
R&D Manager	2.5
Work Experience
Less than five years	26.4
6–10 years	23.6
11–15 years	24.2
6–20 years	10.6
21–25 years	6.8
More than 25 years	8.4
Organization's size
Less than ten employees	45
10–30 employees	14.5
31–50 employees	15.1
51–100 employees	8.2
100–300 employees	9.4
More than 300 employees	7.8

Notes: HRM, Human Resources Management.

Results

Scale validity and reliability

We used Structural Equation Modeling (SEM) to test the formulated hypotheses. The loadings, Cronbach alpha, and composite reliabilities are mentioned in Table 2. For all variables in the model, composite reliability was explored. Regarding measure dependability, composite reliability ratings over 0.60 are considered satisfactory. All composite reliabilities were higher than the recommended value of 0.60 (0.831, 0.923, 0.888, and 0.806, respectively).

Table 2.

Factor loading and discriminant validity.

Variable	Items	Standard loadings	Cronbach- α	CR
Green innovation culture			0.913	0.831
	GIC 1	0.782
	GIC 2	0.822
	GIC 3	0.877
	GIC 4	0.861
	GIC 5	0.853
Product innovation			0.849	0.923
	PRD 1	0.750
	PRD 2	0.816
	PRD 3	0.796
	PRD 4	0.837
		0.713
Marketing innovation			0.915	0.888
	MRK 1	0.754
	MRK 2	0.724
	MRK 3	0.741
	MRK 4	0.752
Environmental sustainability			0.927	0.806
	ENS 1	0.723
	ENS 2	0.743
	ENS 3	0.686
	ENS 4	0.704

Notes: CMIN/DF: 2.247; GFI: 0.956; CFI: 0.961; NFI: 0.952; IFI: 0.967; RMSEA: 0.048; AGFI: 0.971; RMR: 0.46; CR: Customer relationship; Bold values indicate the square root of AVEs.

Measures and measurement model testing

Innovation culture, PRD, MRK, and market success in SMEs are the four elements investigated in this study. The majority of the items were taken from previous research. MRK variables were derived from the studies of Sok et al.⁵⁹ and Deshpande et al.⁶⁰ Items related to innovation culture were evaluated using a 5-item scale based on.^61,62 The studies of⁶³ and ⁶⁴ was used to assess PRD. The ENS items were adapted from the research work of.⁶⁵

The resulting entries were subjected to confirmatory factor analysis in AMOS 26 using SEM. The goodness of fit indices indicate that the samples were well-fit (CMIN/DF: 2.247; GFI: 0.956; CFI: 0.961; NFI: 0.952; IFI: 0.967; RMSEA: 0.048; AGFI: 0.971; RMR: 0.46). Correlation analysis was employed to determine the link between variables. Using average variance extracted (AVE) values and item loadings, the convergence validity was determined. All AVE values for constructs were more than 0.50, indicating that latent factors accounted for at least 50 percent of the variation. Using the square root of AVE, the discriminant validity was measured. The outcomes exhibit discriminant validity since the square root of the AVE is larger than its association with other variables.⁶⁶ The maximum shared variance (MSV) values are less than the AVE values for all variables, further proving the discriminant validity of the model (see Table 3).

Table 3.

Descriptive statistics and correlations.

Variable	GIC	PRD	MRK	ENS	AVE	MSV
GIC	0.743				0.552	0.529
PRD	0.230	0.840			0.705	0.122
MRK	0.727	0.218	0.784		0.614	0.529
ENS	0.297	0.349	0.175	0.714	0.510	0.122

Note: GIC: Green innovation culture. PRD: Product Innovation. MRK: Marketing innovation. ENS: Environmental sustainability

The SEM flowchart is depicted in Figure 2. An optimistic and important association was established (β = 0.054, p < 0.05) amid green innovation culture and marketing innovation GIC → MRK. Consequently, we accepted H_1a. The standardized estimates of GIC with PRD (β = 0.081, p < 0.1) presents a significant linkage between green innovation culture and product innovation. Thus, we accepted H_1b. Similarly, marketing innovation positively affects product innovation, as the MRK standardized estimates (β = 0.075, p < 0.1) show a significant linkage with PRD. Consequently, we accepted H_2a. Marketing innovation also positively affects environmental sustainability, as the MRK standardized estimates (β = 0.035, p < 0.01) exhibit a significant linkage with ENS. Therefore, H_2c was validated. H3a, was also accepted, as product innovation significantly affect environmental sustainability (β = 0.053, p < 0.05). The hypothesis’ outcomes are reported in Table 4.

Table 4.

The structural model.

Hypotheses	Hypotheses paths	β-value	f-value	Result
H1a	GIC → MRK	0.054**	148.9***	Accepted
H1b	GIC → PRD	0.081*	189.7***	Accepted
H2a	MRK → PRD	0.075*	242.6***	Accepted
H2b	MRK → ENS	0.035***	176.6***	Accepted
H3	PRD → ENS	0.053**	341.6***	Accepted

Notes: ***p < 0.01, **p < 0.05, *p < 0.1.

Conclusions

Innovation in today's time seems to be the backbone behind the success of corporations in today's competitive environment. In Chinese SMEs, innovation culture appears significant in fostering PRD and tackling and dealing with market strategies. Similarly, knowing MRK can lead to PRD and improved SME environmental sustainability.⁶⁷ In the data discussed above, Terziovski's⁶¹ model provides a framework to study the relation between these factors and the impact of innovation constructs on them. Through this model as a basis, this research on China examines how various layers of innovation might promote SME market success in an empirical setting. The study results show that innovation frameworks help SMEs succeed in the market.

Theoretical implications

The first study discussed has been done so in light of Terziovski's model. According to this model, the success of an SME depends upon its structure, culture, values, and capabilities. In this paper, the success of SMEs in Chin has been discussed in light of GIC, MRK, and PRD. Thus, this study's results are intended to add to the existing work on organizational practices, SMEs, and innovation in China. It adds to a great extent to the studies on the ENS of SMEs by examining in detail their innovative structures. The theoretical model details the connection between innovation culture, PRD, market innovation, and ENS of SMEs. The results show that a culture of innovation leads to marketing and PRD (H_1a and H_1b). Furthermore, some valid conclusions from these findings include that in competitive markets, an innovation culture is a precondition for administrative, advertising, and organizational success. Though the prior study has demonstrated the value of an organization's innovation culture, several concerns about the links between innovation culture and SMEs’ innovative marketing tactics remain unanswered.

The innovation culture of SMEs in China had a positive impact on the marketing aspect of things and PRD and performance. When an organization's innovation culture is rich and diverse, it can not only encourage the development of new ideas and products but can also come up with interesting marketing strategies that catch the eye of the customer. Moreover, a culture of innovation often aids in product development processes too. According to the research, the MRK tactic has an important and favorable association with both PRD and ENS (H_2a and H_2b). According to previous studies, MRK has a substantial influence on ENS, corporate performance, and SME success.

On the other hand, this study builds on prior research by putting MRK to the test in an integrated model, emphasizing SME and ENS. When new items’ development and marketing operations are well-executed, they are successful. When a product is first introduced to the market, potential customers have limited knowledge of it. As a result, businesses will require the latest products to present and sponsor them, resulting in MRK.

Numerous studies indicate that PRD is essential for the development of new products, process efficiencies, and the increase of market share on long term-basis. According to the study, PRD has a strong and significant linkage with ENS (H₃). In addition, one-of-a-kind added items have the impact of improving operation.

The findings of the paradigm reveal that in SMEs, innovation culture and MRK are directly linked to PRD. The study's findings provide academics with a useful viewpoint, stating that GIC encourages SMEs to make their products distinct from their competitors. As a result, this research adds to the existing work on innovation by better understanding the link between innovation and SMEs’ market success. Specifically, it examines the influence of marketing and PRD on ENS to further our knowledge of the association between innovation and ENS.

Managerial implications

This study highlights certain repercussions for administrators of SMEs for the importance of PRD, MRK strategies, and expanding a company's base in the market. For starters, SMEs should work on their MRK rigorously to get a viable edge by cultivating a culture of innovation in the organization. In the case of developing new and innovative products, SME management must develop new goods and achieve outstanding ENS.

The study's findings also recommend that SMEs try to stabilize their assets for an innovative learning culture, marketing, and innovation processes to promote ENS. These findings aid managers in achieving greater market results. Finally, SMEs should invest in promotion strategies and implement new marketing programs inside their organizations to boost their PRD capabilities. In addition, SMEs should be responsive to this type of innovation because of their information technology environment and brand management operations, since enhancing this competency to encourage innovation would boost ENS.

As can be observed, the strategy described in the study allows managers to take a novel perspective on how SMEs integrate marketing and creative skills to achieve successful ENS. Marketing and product development may benefit from incorporating an innovation culture into the organization's structure. Consequently, managers may influence employee behavior, conduct, and the incorporation of new ideas to promote ENS.

Limitations and potential research

This research also has some limitations; most of them are related to sample size and design. It first looked at how SME CEOs felt about ENS and product and service innovation. The results may be further developed using objective performance measurements in future studies. Second, the questionnaire was sent through emails that the Conflict of Commitment and Conflict of Interest already have for members in their databases. Nevertheless, there is no reason to think that this has influenced the firms’ choice to participate in the study. It first looked at how SME CEOs felt about ENS and product and service innovation. When examining the organizational culture, future scholars should look at some more determinants, such as organizational innovation.

The role of managers in fostering marketing and PRD via creating an innovation culture is a potential subject for study. The process of building innovative dimensions in SMEs, on the other hand, is worth looking into this matter. Managers’ actions will encourage many sorts of innovation within the company. Managers must communicate to employees the critical aspects of conducting market-based, client-focused innovation studies. As a result, future research may focus on marketing and product enhancements that influence and encourage ENS. The example is a good start, but it isn't thorough. The model's extension will yield additional information. Future research prospects include broadening the scope of marketing. In case of researching the significance of ENS in small enterprises, innovation and PRD on ENS, scholars in the coming time must look into some more aspects, such as company innovation and company culture, by including other factors, for example, innovation of process and knowledge patterns, both of which can assist both academics and administrators.

Footnotes

Authors contributions

Yongrong Xin: Conceptualizing, writing, drafting-Original draft. Ume Laila: Data, methodology, empirical results, editing, and revisions. Shuo Zhang: Writing, drafting, reviewing, and editing.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Yongrong Xin

Yongrong Xin is working at Jiangsu Open University. She is an active researcher and has published quality papers in top journals.

Ume Laila is the head of department of Government and Public Policy at National University of Sciences and Technology, Pakistan.

Shuo Zhang is working at China University of Political Science and Law. She is an active researcher and has published quality papers in top journals.

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