Unleashing Innovation Potential: The Role of Human Capital and Digital Capability to Increase Firm Performance for Sustainable Development Goals (SDGS) in Lombok Island
Year: 2024
Type: article
Abstract: Objective: The objective of this research is to examine how the human capital and digital capability of SMEs contribute to enhancing firm performance, with a particular focus on exploring the intervening role of innovation to achieve Sustainable Development goals (SDGs). Theoretical Framework: The research utilizes the Resource-Based View (RBV) theory and integrates human capital and internal capabilities (digital capabilities) resources to drive innovation and enhance firm performance within the SMEs context. Method: This research conducted by using a quantitative approach. A sample of 271 SMEs within the creative industry sector was utilized. The survey employed Likert scale. The model was assessed using Smart PLS 3.2.9 software. Results and Discussion: Variables of human capital and digital capability have an impact on innovation. Interestingly, digital capability alone does not directly impact firm’s performance. Instead, the presence of innovation serves as a mediator in the relationship between human capital, digital capability, and firm performance. This discovery indicates that digital capability can enhance firm performance when coupled with innovation initiatives. Research Implications: This study develops a theoretical framework related to firm resources, and SMEs can develop their human capital and digital capabilities to improve innovation and performance. Originality/Value: The theoretical framework of this study significantly influences the evolution of the Resource-Based View (RBV) theory, especially on the influence of human capital resources, and the RBV framework is developed to elucidate the determinants of competitive advantage within the digital transformation landscape.
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4403879078