Entrepreneurs’ Competency, Marketing Innovation, and Enterprise Growth

In today's fast-paced business environment, entrepreneurship, competency, and innovation are no longer buzzwords - they are the vital components that drive sustainable enterprise growth.
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Entrepreneurs’ competency, marketing innovation, and enterprise growth: uncovering the mediating role of marketing innovation - Future Business Journal

Despite their large numbers, the vertical growth of micro, small, and medium enterprises (MSMEs) is not readily apparent, even though they have a substantial impact on Ethiopia’s economy. Earlier studies have underscored enterprise-related factors as hindrances to the expansion of MSMEs. However, entrepreneurs are blamed for their limited practice of innovative marketing that the researchers wanted to verify whether marketing innovation can positively influence the growth of MSMEs in Ethiopia. Therefore, the major objective of the study was to examine the effect of competency and marketing innovation on the growth of MSMEs in the Ethiopian business environment taking marketing innovation as a mediating variable. To collect data, researchers used a stratified random sampling technique and obtained data from 288 owner–managers of micro, small, and medium enterprises. The results of the study revealed that competency has a significant direct effect on enterprise growth. However, the study also found that the effect of competency on innovation and the effect of innovation on enterprise growth were not statistically significant. These findings suggest that competency directly influences the growth of enterprises, while the impact of innovation on growth is not evident in the context of Ethiopian enterprises. The negligible impact of competency on marketing innovation, coupled with the minimal effect of marketing innovation itself, suggests that entrepreneurs may not be prioritizing the adoption of innovative marketing strategies, assuming they can sell their existing products. However, such an approach is typically short-sighted and could leave the business exposed to future vulnerabilities. This study adds to the body of knowledge by indicating that marketing innovation does not mediate between competency and the growth of MSMEs. Instead, it is the competency of entrepreneurs that has a direct and exclusive impact on growth.

A recent study, "Entrepreneurs' Competency, Marketing Innovation, and Enterprise Growth: Uncovering the Mediating Role of Marketing Innovation," delves into the intricate relationship between entrepreneurial competency,  innovation, and MSMEs growth.

Using data from MSMEs managers in Ethiopia, the study revealed that an entrepreneur's competencies directly influence their enterprise's growth trajectory. Furthermore, the study examined the mediating role of marketing innovation in this process. While researchers hypothesized that competency would influence innovative activities, the study found that entrepreneurs were not giving sufficient attention to marketing innovation as a key factor in enhancing their enterprise's performance.

Marketing innovation serves as a bridge between entrepreneurial capability and enterprise performance. It involves applying creative thinking to marketing processes, strategies, and practices. This can include developing new marketing methods or significantly improving existing ones.

The study hypothesized that when entrepreneurs apply their competencies to innovate in marketing, they can unlock new levels of growth for their enterprises. This is because marketing innovation was assumed to lead to better market penetration, higher customer satisfaction, and increased sales and profits.

The study's findings indicate that an entrepreneur's competency significantly contributes to business growth. However, the research also highlights that the influence of competency on innovation and the impact of innovation on business growth did not show significant evidence. This suggests that while competency directly drives business expansion, the role of innovation in this process is not as clear-cut. The limited influence of competency on marketing innovation and the limited impact of marketing innovation itself implies that entrepreneurs may be overlooking the integration of innovative marketing techniques, assuming their current products will continue to sell. This mindset may be myopic and could potentially expose their business to future risks. For entrepreneurs on the ground, this means focusing on honing their entrepreneurial skills is commendable and engaging in continuous innovation as their marketing strategies should not be ignored. It's about creating a culture where innovation is not an afterthought but a fundamental aspect of the marketing approach to serve the purpose of enterprises in the long run.

In conclusion, the research emphasizes the critical role of entrepreneurs' competencies in supporting enterprise growth. It also serves as a call to action for entrepreneurs to incorporate innovation into every aspect of their business operations if they aim to scale new heights in today's competitive market landscape.

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