Indonesian SMEs’ learning orientation to acquire intellectual demands, social entrepreneurship and environmental governance for enhancing digital transformation and sustainability

Continuously facing numerous challenges, such as digitalisation and highly competitive markets, ISMEs adaptively learn environmental dynamics to seize business opportunities, leading to competitive sustainabilities. By this means, learning orientation has a role in developing organisational capacity, further escalating business processes innovatively and promoting sustainable performance. Therefore, this study investigates ISMEs’ learning orientation, which is consequential to their digital business, sustainability, and competitiveness. Then, it infers that ISMEs conduct learning orientations that further order the need to enhance their intellectual demands (Korsakienė et al., 2017; Wan and Lee, 2021), social entrepreneurship (Elkington and Hartigan, 2008; Tien et al., 2019), and environmental consciousness inclusively (Bennett and Satterfield, 2018; Brondizio and Tourneau, 2016). Consequently, as ISMEs gain further advantages from learning orientation advancement, they alter their dynamic knowledge acquisition by adapting to their business environment’s dynamics, such as producing eco-friendly products and transforming their business digitally. Consequently, ISMEs could continually serve as the backbone of regional economics, supporting local economic sustainability through community involvement and social entrepreneurship development, sequentially strengthening the national economic structure (Lee et al., 2015, 2020; Prasanna et al., 2019; Saebi et al., 2019). In short, it also analyses that intellectual demands sequentially order ISMEs’ learning orientations, social entrepreneurship, and ecological governance, which support their achievement processes in gaining digitalisation, sustainability, and competitiveness for their businesses. Moreover, they use an identical sequence because the business environment requires them to gain exceptionally social entrepreneurs.

This research uniquely builds its critical reasoning below. Firstly, it measures the impact of ISMEs’ intellectual demands and ecological governance as mediating factors influencing their intention to digitalise and enhance their sustainability and competitiveness (Havice and Campling, 2017). Furthermore, it addresses a critical research gap and highlights essential aspects not previously thoroughly explored. Thus, it argues that the interconnection between ISMEs’ intellectual demands, social entrepreneurship, and environmental governance reflects their readiness to achieve higher performance and sustainability (Bacq and Eddleston, 2018; McDowell et al., 2016). Additionally, this research demonstrates that ISMEs conduct identical sequences, meaning they have an ambidextrous strategy. Moreover, ambidexterity allows ISMEs to address intellectual challenges, engage in social entrepreneurship, and manage environmental responsibilities simultaneously. Thus, it explains that ISMEs would probably have an adaptive structuration and agility. Finally, the authors show that ISMEs are resilient when faced with economic pressures.

Second, this study arranges the sequential order of the ISMEs’ learning orientation, intervened by intellectual demands, social entrepreneurship and ecological governance, ending with performance measurements. This study’s sequential arrangements could signify the collective readiness of ISMEs to be shifted into the enlarged businesses of process reengineering and emergence opportunities (Brown and Brown, 2019). Shortly, most ISMEs are businesses reorganising themselves to become enterprising. Moreover, when moving into the upper levels of business, they collectively save the national economic regime. Additionally, ISMEs always pursue increment-intellectual capital views as signified factors to keep and simultaneously improve their business capacities.

Third, this study investigates ISMEs’ intellectual demands, social entrepreneurship, and environmental governance associated with digital transformation and sustainability. It constructs a methodological investigation by designing two structural models to experiment with the intellectual demands and social entrepreneurs in linking ISMEs’ learning orientations with their digitalisation, sustainability, and competitiveness performance. These structural models show conceptual newness explaining ISMEs’ behaviour when their role has intellectual demands, as do the ISMEs’ social entrepreneurs (Bacq and Eddleston, 2018; Tien et al., 2019). Finally, it demonstrates that ISMEs continuously pursue future business signifiers by enhancing their intellectual demands (Korsakienė et al., 2017; Wan and Lee, 2021) or social entrepreneurship (Bertolin et al., 2018; Tien et al., 2019). Thus, it confirms that ISMEs’ learning and business orientations search for prospective economies with intellectual capacities.

This study contributes to the need for a national knowledge repository for these ISMEs. This repository would help balance the ISMEs’ knowledge nationally and facilitate their increasing learning orientation. Furthermore, from the regulators’ perspective, this repository would accommodate ISMEs to shift their intellectual demands and social entrepreneurial activities (Demartini and Beretta, 2020; Panjaitan et al., 2020a, b). Consequently, ISMEs naturally build and broaden their intellectual demands and social entrepreneurial activities when improving their learning orientation. This repository, in turn, helps them develop adaptive structuration and seize future growth opportunities (Iqbal et al., 2018). Finally, our study preliminarily suggests that the Government of Indonesia (GoI) should create an innovative knowledge repository, such as a dashboard, to advance ISMEs simultaneously. Shortly, GoI should disrupt the existing model of knowledge dissemination among these ISMEs into low-cost systems promising higher knowledge transformations.

The second contribution is to encourage the GoI’s industrial ministry to innovate strategic and managerial control systems for all ISMEs. The disrupted knowledge transformation process and dissemination for these ISMEs could accelerate their knowledge acquisition and improve their business levels (Liao and Barnes, 2015; Oliveira et al., 2020). Thus, GoI could benefit because they would be educating them simultaneously. Therefore, this study explains that whether ISMEs carry out their business with more knowledge, they could increase their innovativeness in identifying and analysing future business opportunities. In other words, GoI should create environmental competitiveness for these ISMEs (Li et al., 2019) and change them into enterprises with wide networks (Liu and Yang, 2019). Furthermore, GoI could arrange for all ISMEs to have further strategic and managerial controls in transforming their businesses (Indris and Primiana, 2015; Panjaitan et al., 2020a, b). In short, this study demonstrates the GoI’s ability to lead the ISMEs’ performance because it could formulate the most appropriate problem-solving methods from the knowledge repository.

The final contribution is the ISMEs’ shift in behaviour towards digitalisation through a national artificial intelligence or a dashboard. Thus, GoI could shift these ISMEs in the engineering process, emergence opportunities, and transformation process through individual identification, such as an industrial-wide regime-shifting behaviour. Hence, GoI could control these ISMEs with a national dashboard to measure their levelled and classified performances. Moreover, this study demonstrates that if the GoI does not have a national dashboard for ISMEs, it can never collect their behavioural characteristics. Consequently, GoI could not transform these ISMEs into higher-level businesses (Panjaitan et al., 2020a, b). In brief, our study argues that without the validity of the national data collection on ISMEs, the GoI cannot define and formulate strategic and transformative newness.

This study posits (Panjaitan et al., 2020a, b) that the lack of progress in ISMEs can be attributed to various errors in their social cognition. These errors lead to the inefficacy of government policies in enhancing and elevating their business capabilities. Furthermore, ISMEs must improve their cognition and social networks to adapt to change. Enhancing ISMEs’ beliefs, attitudes, and behaviours is expected to foster the creation of a broad social context. Additionally, it reveals that the dimensions of fostering social cognition are intellectual demand and learning orientation (Panjaitan et al., 2020a, b), interacting with each other. For instance, the ISME who prioritizes learning will tackle challenging tasks enthusiastically and influence their social interactions. Likewise, intellectual demands in a social setting can shape ISMEs’ engagement in interpreting social cues. Thus, understanding these environment dynamics provides invaluable insights into ISMEs’ growth.

This study posits Calantone et al. (2002) in explaining that learning orientation is organisational creativity using knowledge to increase the competitive advantage. Fundamentally, learning orientation is based on market, technology, and social aspects, shaping organisational values ​​as essential dimensions to explain firm performance. Furthermore, organisations invariably holding their learning orientation face internal factors and complex and repetitive environmental changes, stimulating them to develop their learning orientation (Dodgson, 1993). In short, these orientation changes reflect collective habitual actions and behaviour. Consequently, this study infers the required organisational capabilities obtained by learning about market dynamics: customers’ behaviour, technological advancement, and resource-provider relationships. Furthermore, they can differentiate their successful and unsuccessful performances (Harrison and Leitch, 2005) and then explain their sequentially economic consequences (Calantone et al., 2002; Sinkula et al., 1997). Thus, this study demonstrates that ISMEs’ success depends on being directed by experiential values of the learning process and supported by knowledge gained from external networks.

Learning orientation is a continuous cycle, meaning organisations constantly interact with volatile environments, forcing them to persist, escalate their efforts, engage in solutions and enjoy challenges (Manez et al., 2015; Prasanna et al., 2019). Therefore, learning orientation is a significant antecedent for developing organisational learning capacities that affect further performance. Thus, the authors argue that ISMEs must capture the characteristics of learning orientation to support their sustainable practices and increase their organisational adaptation (Manez et al., 2015; Prasanna et al., 2019). First, these ISMEs persevere in creating new products and strategic choices. Second, they should escalate their business processes if they face critical problems. In addition, they must be ready to extend their work and spend more resources. Third, ISMEs should be brave enough to engage in a higher learning orientation without being distracted by information constraints. Finally, these ISMEs prefer to enjoy challenges to beat future problems transparently. In conclusion, this study indicates that ISMEs acquire the characteristics of the learning orientations that benefit them in innovating their organisational performance.

Widely used in educational sciences, intellectual demand is an expected learning level of an individual or specific group further used as basis data in providing suitable study plans, for instance, curricula and syllabuses (Lee et al., 2015; Tavsanli et al., 2023; Wan and Lee, 2021). Furthermore, given changeful dynamics, intellectual demands must be regularly evaluated to follow student growth (Lee et al., 2015; Tavsanli et al., 2023). From an entrepreneurship context, high intellectual demand reflects entrepreneurs’ enthusiastic behaviour, which is crucial for developing their business sectors (Stoian et al., 2018; Tan et al., 2015). In short, an ISME must be highly motivated to achieve business enlargement goals. Furthermore, entrepreneurs must attribute intellectual demand as a basis for always being oriented to the learning process and improving their intellectual capabilities (Huang and Huang, 2020; Lee et al., 2020). Shortly, it argues that entrepreneurs must appropriately understand the characteristics of dynamic knowledge acquisition in their business environment.

Moreover, cumulative entrepreneurial knowledge should include social capital (Korsakienė et al., 2017; Wan and Lee, 2021), considering that the ISMEs’ business environment has a dynamic construction. Thus, these ISMEs face a highly volatile business environment and require a high degree of adaptation. Hence, this research emphasizes that entrepreneurs’ social capital instrumentally enables them to adapt to the business environment and concurrently promotes the generation of dynamic knowledge (Lee et al., 2020; Wan and Lee, 2021). Therefore, the authors explain that ISMEs must obtain dynamic expertise and upgrade their knowledge through a never-ending learning process. Finally, we argue that entrepreneurs must be flexible in determining strategies, especially in a dynamic business environment.

This research posits Tien et al. (2019) and Bacq and Eddleston (2018) by explaining that social entrepreneurship is a business process for generating profits and emphasising social contributions to the surrounding community. Moreover, this means economic and non-economic contributions, for which at least three types of social entrepreneurs exist. First, the leveraged non-profit type utilises existing financial resources innovatively to respond to multiple social needs. Second, the hybrid non-profit type runs a business to obtain financial benefits, which is a primary concern for ensuring the sustainability of social activities. Third, the social business venture type creates social change (Irene et al., 2016). Therefore, this study suggests that ISMEs act as social entrepreneurs to alleviate poverty, improve health services, and build community capacity.

From the ISMEs’ viewpoint, social entrepreneurs still pay attention to profits and increasing their businesses’ scale but also focus on the social impact they want to have. Thus, this study infers that social entrepreneurs have characteristics including creativity, entrepreneurial qualities, social impact and ethics based on the uniqueness of their goals compared to general businesses. Furthermore, it shows that social entrepreneurial creativity focuses on collecting as much economic profit as possible and innovation in the designs of social activities with dominant impacts (Bacq and Eddleston, 2018; Elkington and Hartigan, 2008). This study indicates that entrepreneurial quality envisions social change and effort, realising that vision as business progresses. Furthermore, our study suggests that ISMEs’ social entrepreneurs indirectly contribute to improving the community’s socio-economics (Saebi et al., 2019; Troise et al., 2022). Finally, we argue that ISMEs probably adopt the social entrepreneurship model to expand their social impact, which has been getting more attention.

Foundationally, environmental governance considers sustainability concepts the primary consideration in all social, economic, and political activities (Bennett and Satterfield, 2018; Brondizio and Tourneau, 2016). Furthermore, it includes the decision-making process to control the environment and its natural resources (Ba, 2021; Brondizio and Tourneau, 2016; Havice and Campling, 2017). In short, this research infers that environmental governance practices require business industries’ responsibilities. Furthermore, it marks various environmental issues that make environmental governance increasingly important, such as being conscious of eco-friendly materials in developing their products and the environmental impacts of their business governance.

This study argues that ISMEs perceive various issues that indirectly affect their businesses’ sustainability in the long term. Furthermore, they want to maintain and preserve environmental governance as strategic sustainability. This research posits (Bennett and Satterfield, 2018) by explaining several principles for implementing ecological governance. The first is adequate support for maintaining systems’ functions and integrity. Second, equitability implements processes that are inclusive and produce fair impacts. Third, responsiveness means the diversity of contextual environmental changes. Finally, robustness ensures institutions’ functioning and maintains performance while overcoming disturbances and crises. Hence, this study recognises that ISMEs have adopted environmental governance into their business models to show their responsibility for ecological sustainability, signifying their higher capacity to compete.

Drawing on Besson and Rowe (2012), Brown and Brown (2019), and Li et al. (2018), this study explains that digital transformation is the change processes relying on information and communication technology (ICT), transforming business processes. Furthermore, ICT implementation is a fundamental factor in the digital transformation process involving fundamental changes in business processes, routine operations (Chen et al., 2014) and organisational and managerial capabilities (Tan et al., 2015). While digital transformation involves shifts in strategy and structure, its core focus is on leveraging ICT benefits (Dehning et al., 2003) and organisational ICT expertise (Cui and Pan, 2015). Furthermore, Helfat and Winter (2011) explain that managing ICT capability contains three foundations: managerial cognition, social capital and human capital. Herewith, managerial capabilities are superior for facilitating these ISMEs’ digital transformations, further improving their business performances. Finally, we argue that ISMEs must remain dynamic and flexible, harness their capabilities, seize opportunities, and implement strategic changes through digital transformation.

This study considers Ash and Burn (2003), explaining that ISMEs’ transformation is an effort to improve business processes within organisational boundaries, optimising efficiency and business processes. Furthermore, it emphasises the demands for digital transformation, primarily through ICT implementation, such as e-commerce and social media, which have developed rapidly and are widely adopted by many firms. Moreover, Besson and Rowe (2012) explain that the dynamic market environment is a superior distractor. Therefore, ISMEs should emphasise the need for digital transformation to compete in future domestic and international markets. Furthermore, this emphasis on digital transformation for ISMEs encourages them to achieve their future sustainability. Finally, this process becomes a bridge to convey future challenges, promoting the ISMEs to be conscious for the core strategies of ICT’s use. Thus, this study infers that digital transformation is the foundation for ISMEs’ business evolution, enabling them to expand globally and leverage digital resources as a source of competitive advantage.

This study highlights that ISMEs face the globalisation era, with the GoI promoting their role in driving Indonesia’s sustainable economic development. Drawing on extant literature, Prasanna et al. (2019) identify critical challenges for ISMEs, including sustainability, globalization, and ICT adoption. Further, Chege and Wang (2020) emphasise that environmental, economic, and social sustainability are critical concerns, particularly in the industrialisation of developing countries. In other words, the sustainability principle is central to ISMEs’ potential to boost national products (Eikelenboom and de Jong, 2019). Thus, this study accentuates environmental and social problems by emphasising community involvement to pose challenges and offer opportunities for ISMEs’ engagement. It also argues that ISMEs, as key drivers of regional and domestic economies, can create significant impacts by voluntarily adopting sustainability principles.

This study propounds Moore and Manring’s (2009) work, highlighting that sustainable strategies generate synergistic benefits when collaborating with other ISMEs, ultimately contributing to the greater good. Furthermore, it examines the advantages of ISMEs, which have bargaining power in their sustainable implementation. Thus, this study infers that business sustainability is the final stage in developing ISMEs. Moreover, the applied sustainability principles encourage ISMEs to compete by gaining convenience from (1) building a new investment target because of the sustainability principle, (2) creating a competitive social network in the regional and domestic markets and (3) broadly framing the leading supply chain (Moore and Manring, 2009). Finally, the researchers believe ISMEs must apply sustainability principles when focusing on long-term growth. Hence, we demonstrate that the GoI’s planning always encourages ISMEs to become the accelerator of the country’s economy and maintain sustainability to be globally competitive.

This study argues most ISMEs demand intellectuality to improve their organisational capabilities and competencies. They continuously enhance their cumulative knowledge to advance their business processes, further changing their firms’ directions. Furthermore, they accumulate knowledge through their learning orientations, persistence, and escalated efforts by engaging in challenging solutions, ending with resource-based dependency. Therefore, this sufficient cumulative knowledge could solve their business problems, which is their intellectual demand. Moreover, ISMEs’ intellectual demand also considers social entrepreneurship and ecological governance. Meanwhile, these ISMEs enlarge their businesses, accompanied by incremental and cumulative organisational knowledge, including social entrepreneurial and environmental governance. Then, this study constructs hypotheses H1, H2 and H3 below.

This study investigates ISMEs’ intellectual demands, social entrepreneurship, and environmental governance associated with digital transformation and sustainability. Then, it argues that these constructs support ISMEs in accelerating digital transformation and improving sustainability. Furthermore, it explains that ISMEs’ should be genuinely related to learning orientation, digital transformation, and sustainability. Moreover, it also reveals their moderating effects. Thus, it argues that ISMEs would shift their business capacities and flexibilities through cumulative knowledge gained from intensive intellectual demands, social entrepreneurship, and environmental governance. Hence, this cumulative knowledge broadens their shifting pathways to digital business transformations and sustainability. Finally, this study formulates hypotheses H4 and H5 below.

This research uses structural equation models to explain all hypotheses, enhancing clarity, as shown in Figure 1. The model is divided into parts A and B to identify the most suitable associations for each hypothesis. Model A highlights the initial factors—intellectual demand, social entrepreneurship, and environmental governance—that shape ISMEs’ learning orientation. The first model also represents how these foundational elements positively determine ISMEs’ learning orientation and further influence them to shift their business digitally and improve sustainability principles. Meanwhile, model B explains the coalesced learning orientations’ constructs through intellectual demand, social entrepreneurship, and environmental governance endowed as ISMEs’ cumulative knowledge. Consequently, they adaptively shift to digital business and sustainability, gaining more advanced competitive advantages.

This study collected ISME samples in Indonesia using the following criteria: (1) legal status of the limited company and limited partnership, (2) total assets of more than 100,000 USD or 1.4 billion IDR, and (3) using electronic emails for carrying out business operations. Data was collected through stratified random sampling (Creswell and Creswell, 2017). Furthermore, the stratified random sampling method was adopted to represent ISME subgroups proportionally based on the legal status, asset size, and digital readiness, guaranteeing the selection process remained unbiased, while the stratification allowed for the inclusion of diverse ISME characteristics.

This study compared the normative standard for Cronbach’s alpha and internal validity to analyse the convergent and discriminant variables. Confirmatory factor analysis determines the decision on convergence and discriminants with a standardised factor loading that had to exceed 0.50. Moreover, it identified discriminant validity with the average variance extracted (AVE), resulting in the instrument’s inter-construct correlation. Finally, this study measured the nomological validity to determine the ability to predict theoretical concepts and ensure the proposed relationships between the variables had the goodness of fit.

We succeeded in reaching 33 out of the 34 provinces in Indonesia. In addition, we spent approximately five months accumulating the data. Thus, we had 575 ISMEs who filled out the questionnaire. Moreover, we showed that most ISMEs were in various business types and engaged in continuing their business operations, as presented in Table 1 Panel-A. This study controlled the cumulative data by considering extreme values to ensure homogeneous data. Therefore, it inferred that ISMEs’ owners and managers supported the collected data, reaching 77.92% (38.09 and 39.83%, respectively). Likewise, we concluded that most ISMEs had legal status with a sole proprietorship (63.65%), and their business operations were mainly in Java (63.83%).

Table 1 Panel-B shows the 575 respondents’ descriptive statistics for all research variables. While environmental governance and sustainability had a minimum value of two, the overall results showed that almost all variables had a value above 3.00 on average. Furthermore, the researchers believed the relationship among these variables in the two research models would be supported, meeting standard deviation values, concluding that the descriptive statistics met all the required criteria.

We noted that the factor loading for each variable exceeded 0.5, indicating high validity, while the AVE values above 0.5 confirmed strong convergent validity. Additionally, item-total correlations were lower than the AVE, achieving convergent and discriminant validity. Cronbach’s alpha and composite reliability scores exceeded 0.8 for most variables, demonstrating high reliability. Hence, as presented in Table 2, we achieved the overall reliability and validity of the variables’ measurements.

Additionally, before testing all hypotheses, the authors examine the goodness of fit tests to maintain the research’s robust results from both models. Consequently, the results, RMSEA, CFI, TLI, and AIC, fulfilled the models’ cut-off standard. Thus, we inferred that all models were at a marvellous level and recommended a sequentially nomological association.

Table 3 shows the statistical association results in each model, answering hypotheses H1, H2, and H3 in both models, representing the ISMEs’ learning orientation towards intellectual demand (ID), social entrepreneurship (SE), and environmental governance (EG). In detail, the authors stated that model A described the learning orientation represented by the detailed constructs of learning orientation with persistence (PE), escalated effort (EE), engagement in solution (ES), and reporting enjoying the challenge. However, model B described the unified traits of the learning orientation in detail. The results showed that H1a had a coefficient of 0.488 with a CR of 2.264, which was significant at 5%. Moreover, the statistical results exhibited that H1b,c,d and H2-3a,b,c,d were the same as H1a, varying their significance at 5 and 1%. Model B showed similar results with an associative coefficient of 0.037, CR of 18.225, and significance at 1%. Thus, we concluded that all H1-H3a,b,c, and d in both models are supported.

At the intervening level, these models related ID, SE, and, e.g. with digital transformation (DT) and sustainability (S), as stated in H4 and H5. This study showed that all models had the same associations. Then, H4a in model A has a coefficient of 0.097 with a CR of 1.658, at a significant level of 10%. Likewise, the statistical tests presented similar results to H4a in model B, which had a coefficient of 0.102 with a CR of 1.831 and was significant at 10%. Moreover, these H4b,c, and H5a,b,c resembled the statistical test results. Finally, we concluded that both models’ H4-5a,b,c were statistically supported.

This study concludes that ISMEs adopt learning orientation to enhance their social capital. This orientation fosters their resilience, enabling them to face future business competition and environmental pressures. Therefore, we posit that ISMEs naturally cultivate intellectual demand to expand their business capacities (Korsakienė et al., 2017; Wan and Lee, 2021). Likewise, they also demonstrate excellence in continuous innovation, particularly in production processes and business management (Bacq and Eddleston, 2018; Bivona and Cruz, 2021). Consequently, they continuously acquire incremental knowledge and resources, bolstering their innovative sustainability and maintaining their dynamic capabilities at the forefront of business competition.

In the first model, the authors infer that an increase in the ISMEs’ learning orientation could affect their accumulative intellectual demands, social entrepreneurship and environmental governance. In other words, ISMEs enhance their business capacity with a collaborative learning orientation, broadening their knowledge capacity with dynamic partnerships. Moreover, they concretely master dynamic capabilities in environmental, social and intellectual contexts, outperforming the communities’ collective knowledge. Finally, we reveal the ISMEs’ need for knowledge superiority in social, environmental and intellectual aspects, collaboratively becoming a fundamental anchor for business sustainability (Havice and Campling, 2017; McDowell et al., 2016). Hence, after mastering all the required knowledge, these ISMEs could realise higher performance and long-term business sustainability.

In the second model, the authors infer that ISMEs can structure their cumulative social, environmental, and intellectual knowledge, encouraging them to think ahead. Consequently, they should enhance their ICT by maximising social media usage. In addition, they should establish high connectivity and employ extensive data analysis to maximise their social presence (Tan et al., 2015), leading to social influence (Qalati et al., 2021; Sharma et al., 2020). With an in-depth digitalisation implementation, ISMEs could induce social, environmental, and intellectual knowledge, helping them achieve business sustainability. Thus, we reveal that ISMEs use digitalisation to achieve a social presence and influence by maximising social media to upgrade the flexibility of their business operations.

From these findings, this study implies that GoI needs to develop national strategic policies to foster an integrative approach to ISMEs’ learning orientation, intellectual demands, social entrepreneurship, environmental governance, digital transformation, and sustainability. In the short term, GoI must implement policies that drive social change within ISMEs by enhancing their intellectual demand while ensuring attention to environmental governance. Furthermore, GoI must prioritize the establishment of interconnected dashboards to streamline ISMEs’ operational and financial flows. Then, these dashboards could sustainably manage and control the ISMEs’ adjacent business fields from upstream to downstream integratively. In this process, GoI provides multi-perspective knowledge about the need for the interrelated system as a networking forum among ISMEs, allowing them to achieve a shared competitive advantage. In addition to functioning as a network, this forum acts as an inter-supply chain mechanism providing production inputs. Thus, we suggest that the GoI should facilitate the formation of integrated ISME clusters that promote inter-supply chain collaboration to optimize resource sharing and business benefits.

The second implication is the GoI’s obligation, as regulatory intermediaries, to encourage ISMEs to run their businesses in inter-producing systems. Consequently, ISMEs could capture future business opportunities with their learning orientation. Therefore, they could gain incremental agility, improving their resiliency and converting their adaptive capacities into new sources of social dynamics (Calantone et al., 2002; Prasanna et al., 2019). Moreover, ISMEs could reduce reliance on existing business platforms by diversifying their operations to establish enterprising systems akin to conglomerate structures (Ba, 2021; Brondizio and Tourneau, 2016). To support this transition, we recommend that the GoI adopt dynamic policies that adapt to ISMEs’ evolving needs and proactively guide their orientation toward sustainable growth and development. Finally, we reveal that the GoI could aggregately lead ISMEs to achieve socio-dynamic capacity, business enlargement readiness, and knowledge mastery.

This study concludes that most ISMEs focus on operating capacity and organisational scalability to improve their businesses’ growth opportunities. Concurrently, they continuously increase their knowledge acquisition through their learning orientation and intellectual demands. Along with that learning, ISMEs have fostered their awareness of social entrepreneurship and environmental governance practices, governing their dynamic accountability towards community welfare and environmental sustainability. Furthermore, the ISMEs’ accountability provides future economic benefits for their businesses’ long-term growth through adaptative structuralisation by inducing digital technology. Moreover, most ISMEs could achieve systematic efforts to enhance their business sustainability. On the one hand, this study demonstrates that, through its sequential logic models, most ISMEs could employ ambidextrous strategies to increase their business enterprises. Therefore, we reveal two implications of this study for the GoI: to improve ISMEs’ community welfare and maintain environmental sustainability.

This study opens up opportunities for future research related to the undiscussed themes. First, from the research’s design, this study recognises that it does not discuss what the GoI’s characteristic leadership manages and controls at the ISME level. Moreover, the authors argue that advancing ISMEs depends on the GoI’s characteristic leadership due to its authorisation to create degrees of flexibility, adaptation, and opportunity. Furthermore, future research still has the potential to assess the GoI’s role and function in its characteristic leadership, making ISMEs grow. Thus, we demonstrate that the GoI should play a valid role and function with its characteristic leadership to enhance the ISMEs’ dynamic capability, social entrepreneurship, environmental governance and sustainability. Hence, we reveal the GoI’s need to complement a national dashboard system to integrate all the ISMEs and cluster them with inter-related supply chains and customer relationships.