Determinants of MSE Performance in the Creative Economy: The Roles of Market Orientation, Social Media, Empowerment, and Innovation in Padang, Indonesia

Salsabila Arafani Syafril Putri,; Syafrizal S.E., M.Si.,; Vera Pujani

doi:10.18535/ijsrm/v13i12.em03

Abstract

This study investigates the influence of market orientation, social media adoption, and employee empowerment on innovation capability and business performance among Micro and Small Enterprises (MSEs) in the creative economy sector of Padang, Indonesia. A total of 87 respondents were analyzed using Structural Equation Modeling with Partial Least Squares (SEM-PLS). The findings reveal that market orientation and employee empowerment significantly enhance innovation capability, while social media adoption shows no effect on either innovation capability or business performance. Additionally, none of the three independent variables directly improves business performance. Instead, innovation capability emerges as the only significant predictor of business performance, indicating its mediating role in translating organizational capabilities into competitive outcomes. These results underscore the gap between awareness of strategic business practices and their effective implementation among creative MSEs. The study provides theoretical contributions by challenging the assumption that digital adoption and market awareness automatically lead to performance improvement and confirms the central role of innovation capability in developing competitive advantage. Practical implications highlight the need for structured innovation programs, digital strategy training, and managerial capacity-building to support sustainable growth in the creative economy sector.

Keywords

Market OrientationSocial Media AdoptionEmployee EmpowermentInnovation CapabilityBusiness Per

References

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[refR-5] Pratama. Pengaruh Program Pembiayaan Usaha Usaha Mikro, Kecil, Dan Menengah di Kota Mojokerto. J Ilm Mhs FEB [Internet]. 2019; Available from: https://jimfeb.ub.ac.id/index.php/jimfeb/article/download/5694/5006Google Scholar ↗

[refR-6] Zusmelia, Ansofino, Irwan, Ronald J, Suryadi R. Ekonomi Kreatif dan Entrepreneurship Sumatera Barat. Padang: deepublish; 2022.Google Scholar ↗

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[refR-9] Uzunbacak HH. The Impacts of Employee Empowerment on Innovation: A Survey on Isparta and Burdur Organized Industrial Zones. J Int Soc Res. 2015;8(37):977–977.Google Scholar ↗

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[refR-20] Kaplan AM, Haenlein M. Users of the world, unite! The challenges and oppor- tunities of social media. Bus Horiz. 2010;53(1):59–68.Google Scholar ↗

[refR-21] Tajudeen FP, Jaafar NI, Ainin S. Information & Management Understanding the impact of social media usage among organizations. Inf Manag [Internet]. 2017;(August):0–1. Available from: http://dx.doi.org/10.1016/j.im.2017.08.004DOI ↗Google Scholar ↗

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[refR-23] Cohen W, Levinthal D. Absorptive capacity: a new perspective on learning and innovation. Admin- istrative Sci Q 35. 1990;Google Scholar ↗

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