Title: Challenges faced by SMEs in Indonesia: the importance of collaborative networks and innovation

Authors: Dekeng Setyo Budiarto; Eca Fitri Anna; Aprilia Wahyuni

Addresses: Department of Accounting, Universitas PGRI Yogyakarta, Jl. PGRI I, No. 117, Bantul, 55183, Indonesia ' Department of Accounting, Universitas PGRI Yogyakarta, Jl. PGRI I, No. 117, Bantul, 55183, Indonesia ' Department of Accounting, Universitas PGRI Yogyakarta, Jl. PGRI I, No. 117, Bantul, 55183, Indonesia

Abstract: The role of small and medium enterprises (SMEs) in driving economic growth in developing countries is highly significant, given that the majority of businesses operate in this sector. The strategic role of SMEs causes challenges. Hence, there is a need to endure, compete, and maintain stable performance. Therefore, this study aimed to examine the effect of collaborative networks on innovation development, with the intention of enhancing market performance and sustainability. Questionnaires were administered to 180 SME owners engaged in e-commerce using a quantitative approach. Consequently, the scope of previous explorations was expanded to include SMEs across Indonesia. The results showed that innovation played a strategic role in enhancing sustainability and significantly affected market performance. In addition, the study provided empirically grounded insights into the extent of market performance achievable by SMEs and the degree to which they can innovate by examining the effects of collaborative networks.

Keywords: collaborative networks; innovation; market performance; sustainability; small and medium enterprises; SMEs; Indonesia.

DOI: 10.1504/IJBPIM.2026.155158

International Journal of Business Process Integration and Management, 2026 Vol.13 No.2, pp.85 - 99

Received: 30 Jul 2025
Accepted: 28 Dec 2025
Published online: 28 Jul 2026 *

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