STRATEGIC INNOVATION FOR SUSTAINABLE BUSINESS DEVELOPMENT IN SMES

Abstract

Strategic innovation has emerged as a critical determinant of sustainable business development in small and medium-sized enterprises (SMEs). Empirical and theoretical studies demonstrate that innovation-oriented strategies significantly enhance SMEs’ competitiveness, resilience, and long-term performance. This article analyzes the role of strategic innovation in fostering sustainable development within SMEs, drawing on established frameworks such as dynamic capabilities, open innovation, and sustainability-oriented innovation. Based on a systematic review of peer-reviewed literature and international policy reports, the study identifies mechanisms through which strategic innovation contributes to economic, environmental, and social sustainability in SMEs. The findings confirm that strategic alignment, absorptive capacity, stakeholder integration, and resource orchestration are central to sustainable growth outcomes.