Green Innovation Management in Indonesian SMEs: Drivers, Barriers, and Performance Implications for Sustainable Business Development

Dewi Kania (1) , Reza Fauzi Bukhori (2)
(1) Universitas Al-Ghifari,
(2) Universitas Al-Ghifari
https://doi.org/10.53675/icosei.v1i1.1568
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Terbitan
Vol 1 No 1 (2025)
Telah diserahkan
2025-08-18
Diterbitkan
2025-10-07
PDF (Inggris)

Abstrak

Small and Medium Enterprises (SMEs) represent 99% of all businesses in Indonesia and serve as the backbone of the national economy, contributing 60.4% of total investment and absorbing 97% of the workforce. However, their environmental impact remains significant, creating an urgent need for sustainable business practices through green innovation management. This systematic literature review examines the drivers, barriers, and performance implications of green innovation adoption among Indonesian SMEs. Through analysis of 120+ academic publications, government reports, and industry documents from 2019-2025, this study investigates the critical factors influencing green innovation implementation and its impact on business sustainability. The review reveals that organizational factors emerge as the primary determinant of green innovation adoption, followed by environmental regulations and technological capabilities. Key drivers include internal environmental motivation, competitive advantage pursuit, and regulatory compliance requirements. Major barriers encompass limited financial resources, lack of environmental awareness, inadequate technological infrastructure, and insufficient government incentives. Performance implications demonstrate that green innovation adoption significantly enhances operational efficiency, market competitiveness, and environmental sustainability, while contributing to SDG achievement. The study identifies that successful green innovation management requires integrated approaches combining technological advancement, organizational capability development, and strategic stakeholder engagement. These findings provide crucial insights for SME managers, policymakers, and researchers seeking to advance sustainable business development in emerging economies. Keywords: Green innovation, SMEs, sustainable business development, environmental management, Indonesia.

Penulis

Dewi Kania
Universitas Al-Ghifari image/svg+xml
lecturer
Reza Fauzi Bukhori
Universitas Al-Ghifari image/svg+xml
Lecturer

Cara Mengutip

Green Innovation Management in Indonesian SMEs: Drivers, Barriers, and Performance Implications for Sustainable Business Development. (2025). Proceeding International Conference On Sustainable Environment And Innovation (ICOSEI), 1(1). https://doi.org/10.53675/icosei.v1i1.1568

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Referensi

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