Determining Factors for the Success of Green Innovation: Technology, Organizational, and Environmental Readiness On the Performance of MSMEs in Solo Raya

Abstract

This study examines how ready MSME companies are for green innovation based on the framework of technology, organization, and environment. This study is quantitative. This study involved 156 owners and managers of micro, small, and medium enterprises (MSMEs) in Solo Raya to investigate the effect of technological, organizational, and environmental readiness on MSME performance. This study used a survey by distributing questionnaires to MSME owners/managers in the Solo Raya area. The Partial Least Squares (PLS) method was used together with Smart-PLS software version 3 to analyze the data collected to evaluate the relationship between technology, organization, environment, and financial performance. The results showed that green innovation was significantly positively influenced by technological compatibility, environmental concern, and government support. In addition, green innovation was also significantly positively influenced by financial performance. This study also found several limitations, such as the possibility of potential for less generalizability to other areas because the study was conducted only on MSMEs in Solo Raya. Despite these limitations, this study makes an important contribution to the understanding of how Technological, Organizational, and Environmental Readiness can influence performance in MSMEs.