Sustainable business model innovation: external and internal factors on SMEs

Purpose This study aims to analyze the internal and external factors of the acceptance of small and medium enterprises (SMEs) to implemented sustainable business model innovations (SBMI) that depend on external factors, dynamic performance expectancy, facilitating conditions, social influence, effort expectancy, hedonic motivation and factor internal speed. Design/methodology/approach This is a quantitative method research project conducted through a survey of SMEs in Semarang, Central Java, from February to June 2021. SMEs that have been operated to sustainable business were chosen purposively as samples. Based on the requirement, there are 220 entities used in this study. Data analysis was conducted by using Structural Equation Model. Findings The results of this study provide empirical support that the factors studied affect the acceptance of SME business actors toward the implementation of SBMI. The application of this SBMI is used to design and implement a sustainable business model for SME businesses. This study has identified, explained and empirically supported the behavioral structures (composites and factors) that influence the adoption of SBMIs that are commonly available for business modeling. Research limitations/implications The main limitation of this research is the static view of the structure (construction) that influences the use or application of SBMI by SME actors which often changes over time, experience and failure. Originality/value This study supports the execution of sustainable innovation initiatives that have yet to be investigated at the strategic, operational and tactical levels. This is especially true when beginning a firm, because entrepreneurs encounter uncertainty while putting their plans into action at one of three levels: strategic, operational or tactical.