Orientation: Indonesia is currently in the industrial revolution 4.0 and 5.0. Woman entrepreneurs must be able to increase creativity, innovative behaviour and trust in digital technology to have sustainable competitive advantage for their firm.

Research purpose: This study aimed to examine and analyse the impact of creativity and innovative behaviour on competitive advantage mediated by trust in digital technology for women entrepreneurs.

Motivation for the study: The literature of creativity, innovative behaviour, trust in digital technology and competitive advantage is still limited in women entrepreneur context.

Research approach/design and method: A quantitative approach with cross-sectional survey design was used to collect data from 300 small and medium enterprises (SMEs) female entrepreneurs in the Special Region of Jogjakarta and West Java, but only 206 were sampled. The data analysis technique used structural equation modelling with partial least squares (SEM-PLS) 23.

Main findings: Creativity and trust in digital technology have no significant effect on competitive advantage, but creativity positively and significantly affects trust in digital technology and innovative behaviour. Innovative behaviour positively and significantly affect trust in digital technology and competitive advantage. Trust in digital technology does not mediate the effect of creativity on competitive advantage.

Practical/managerial implications: Women entrepreneurs are able to increase competitive advantage with innovative behaviour. Likewise, creativity and innovative behaviour require trust in digital technology and become able to increase competitive advantage.

Contribution/value-add: This study fills the literature gap by explaining the relationship between creativity, innovative behaviour, trust in digital technolog, and competitive advantage in the context of women entrepreneurs in Indonesia.

Keywords: creativity; innovative behavior; trust in digital technology; competitive advantage; women entrepreneur.

Introduction

The Industrial Revolution 4.0 and 5.0 has changed the way creative actors carry out their activities. Today opportunities are given by creative industry 4.0 to developing countries such as Indonesia today. Currently, many women entrepreneurs in Indonesia are starting to move forward in the creative industry. Over the past half-century, women have been present in income-generating activities and have taken concrete steps to maximise women’s entrepreneurial activities by increasing their creativity (Agussani, 2020; Shah et al., 2017). Creativity and innovative behaviour are very relevant discussion topics in research work, which are seen as important factors in the creation of competitive advantage. However, some researchers have stated that creativity has a direct effect on product innovative behaviour but is not directly related to competitive advantage (Bulut et al., 2022; Elidemir et al., 2020; Ferreira et al., 2020; Zameer et al., 2020).

Because of the intense competition to achieve competitive advantage, women entrepreneurs are required to devote more efforts to improve creative performance through trust (Chen et al., 2021; Heuwinkel, 2013), so that trust and creativity become an important driving force in increasing competitive advantage. Trust in digital technology is a very crucial aspect in this digital era (Fink et al., 2015), especially in the context of small and medium enterprises (SMEs). Trust is very important in every aspect of social life, including its rising practice in the business context.

Likewise, innovative behaviour is an important driving force for companies to maintain competitive advantage and drive sustainable economic growth (Mady et al., 2022; Qu et al., 2022). Creativity is positively predicted as innovative behaviour through organisational trust (Hughes et al., 2018; Sano & Sumiya, 2021; Yu et al., 2018). Therefore, this study proposes that trust in digital technology mediates creativity on competitive advantage and the relationship between creativity and innovative behaviour and innovative behaviour on trust in digital technology. Furthermore, trust in digital technology on competitive advantage and the influence of innovative behaviour on competitive advantage is very important and becomes a strategic issue in this era.

Competitive advantage is very much needed by companies in order to maintain their position and win the competition with their existing and potential rivals. It has been considered as the prerequisite for company success for a long time. Many companies are currently developing and evolving their businesses, all looking for the best way, the best mechanism, to run their business and gain competitive advantage (Khan et al., 2019; Kiyabo & Isaga, 2020). Most of them have also realised that one of the most important aspects in the company that can help them to achieve competitive advantage is human resources (Hamadamin & Atan, 2019; Kryscynski et al., 2021; Minbaeva, 2018). Individual, or employees, in the organisation, can exert their numerous capabilities to help companies achieve their goals. This study specifically considers creativity as the predecessor for competitive advantage. Furthermore, this study also employs innovative behaviour and trust in digital technology as the underlying mechanisms that link the relationship between creativity and competitive advantage.

The purpose of this study is to investigate the effect of (1) creativity on competitive advantage, (2) creativity on trust in digital technology, (3) trust in digital technology on competitive advantage, (4) creativity on innovative behaviour, (5) innovative behaviour on trust in digital technology, (6) innovative behaviuor on competitive advantage and (7) trust on digital technology in mediating the effect of creativity on competitive advantage.

Literature review

Creativity

Creativity is a capacity that is highly targeted in all science disciplines. In this regard, creative thinking is operated as a force that drives new knowledge and novel ideas, as well as encourages growth and changes in the community. Creativity is an act of changing new and imaginative ideas into reality (Márquez et al., 2016; OECD, 2019). The discussion regarding creativity has been known in three paradigmatic stages, namely the genius stage, the creative person stage and the social stage (Glǎveanu, 2010; Gralewski, 2015). Creativity also acts as a component for the managerial process, which will contribute to the development and competitive advantage of a firm (Benea-Popuşoi & Duca, 2022). Creativity in the organisational context is a valuable, useful, novel and effective creation to a number of people. Therefore, in de facto, creativity is seen as the precursor of innovative behaviour (Chaubey & Sahoo, 2021; Leoni & Cristofaro, 2022).

Creativity can be understood as the process, result and product of an effort to develop and introduce new ways in carrying things out (Anderson et al., 2014). Creativity can be practiced by individuals, teams or groups and even organisations. Previous studies have shown that organisations or companies can obtain various benefits from the existence of creativity in the organisation, as it contributes to innovation, effectiveness and organisational longevity (Amabile et al., 1996; Shalley et al., 2009). Employees who possessed creative ideas, develop it and disseminate it to other members of the organisation will enable companies to adapt to changes, seize the opportunities, as well as win the competition (Shalley et al., 2004).

Innovative behaviour

Innovative behaviour is an important factor in the recognition of entrepreneurship, and it is considered to have a significant influence on the development of the company (Amir, 2015; Kamran & Ganjinia, 2017; Lumpkin et al., 2011). The growth and development of a company cannot be maintained without additional innovation. Innovation is seen as the manifestation of creativity into a product or service that can be utilised. All innovations are started with the existence of creative ideas (Anderson et al., 2014; Marković et al., 2012). The resulting innovation is associated with a new or better form of product or process, and the results of the creative process function as an important tool for innovative processes (Antonites & Vuuren, 2005; Juliana et al., 2021). Introducing new products is viewed as a part of innovative processes, which is seen as an engine that can drive sustainable growth and development (Kadam, 2015; Uzunidis, 2009). The process of transforming creative ideas, or creativity, can result as an innovative product or innovation. However, creativity is not always a result of innovation (Neto et al., 2019; Zhou, 2003).

Trust in digital technology

A number of scholars have emphasised the importance of trust in the entrepreneurship programme (Agrawal et al., 2018; Sundin et al., 2016). The ability to rely on mutual trust is a fundamental element in determining the success of interfirm partnerships (Bidault & Castello, 2009; Daudi, 2007; Fadol & Sandhu, 2013). Trust is a key aspect of many social interactions and a critical condition that triggers collaboration and efficient organisational performance. Trust is also playing an increasingly important role in online commerce, and in business negotiations, especially in situations involving risk, uncertainty and interdependence (Akhmedova et al., 2020; Chen et al., 2021). Trust in digital transaction or technology is often seen as something that can actually motivate an individual to actively carry out digital transactions (Khan et al., 2021; Kittl & Petrovic, 2003). Without trust, digital and traditional transaction will be dominated by chaos, fear and inertia. Therefore, the role of trust in digital transactions and technology is very necessary (Kuldosheva, 2021; Rainie & Anderson, 2017; Saragih & Sinay, 2015).

Competitive advantage

Competitive advantage is what makes an entity’s goods or services superior to all other customer choices. Competitive advantage contributes to the company’s performance in the long term. This allows entrepreneurs to apply individual skills as a trigger or stimulus for flexibility and high creativity towards business competitive advantages (Zainol & Al Mamun, 2018). Companies that use their internal capability to seize the opportunities and neutralise threats, as well as hindering their internal weaknesses will have more possibility to obtain competitive advantage compared with their competitors. Therefore, companies must understand their strengths and weaknesses and combine them with the external competitive environment (Barney, 1995, 2014).

In order to reach competitive advantage, companies can use resource-based view (RBV) and value, rarity, imitability and organisation (VRIO) framework. These tools and views help companies to analyse and identify their strength and weaknesses in competing in the volatile business environment. In simple terms, RBV and VRIO framework proposes that the valuable, rare, inimitable and inexploitable resources and capabilities of organisation will lead companies to sustainable competitive advantage (Barney, 1995, 2014).

The relationship between creativity and competitive advantage

Creativity will produce imaginative skills to create something new. The creative industry is one of the most influential economic sources, and it plays a role in increasing economic growth. In practice, this industry relies heavily on the role of human resources and other economic resources in creating creativity (Ferreira et al., 2020). Creativity is needed for the creative industry to create a competitive advantage. Competitive advantage is considered a very important element to achieve. To maintain a competitive advantage, the entity must have the ability to show a difference or relative value that is more significant than its competitors, and this requires creativity from its human resources (Urbancova, 2013).

Moreover, Barney (2014) also mentioned that competitive advantage is the responsibility of all individuals in the organisation, which includes managers, supervisors and employees. Companies should exploit and utilise valuable, rare and inimitable resources rather than just imitate them from their competitors. When individuals or employees in the company have creativity, engage in it and practice it on their daily basis, they will be able to lead the company to achieve competitive advantage and win the competition:

The relationship between innovative behaviour and competitive advantage

In the current industrial revolution 4.0 and 5.0, the competitive strategic management of an organisation determines its focus on how to be able to achieve competitive advantage. Thus, awareness from management is needed to make something different. Moreover, organisations also need to continuously make profits and meet customers’ demands more effectively (Aitbar, 2021). Organisations have learned that in addition to reducing costs, it is necessary to create differentiation through innovative behaviour in its products, which places an emphasis on human resources that are essential to develop and maintain competitive advantage (Kuo et al., 2022). Organisational innovative activities significantly affect competitiveness based on unmatched skills and abilities to be able to face competitive advantage (Bibi et al., 2020). Employees who practice innovative behaviour can help their organisation to achieve superior performance and competitive advantage and win against their competitors.

Liu (2017) conducted a study on 595 hotel managers in China and found that competitive advantage can be achieved through increased innovative behaviour. Innovative behaviour is seen as a complex process that involves knowledge and information searching, idea generation, as well as selection and application of new ideas to improve organisational performance (Ottenbacher & Gnoth, 2005). Moreover, Elidemir et al. (2020) also examined the influence of innovative behaviour on competitive advantage in 323 customer contact or frontline employees at 4- and 5-star hotels in Turkey. The findings indicate that innovative behaviour has a positive impact on competitive advantage:

The relationship between creativity and trust in digital technology

There is a definite relationship between trust and shared creativity, leaving room for uncertainty about the relationship between the two variables, all of which should support higher levels of creativity (Perry-Smith & Mannucci, 2017). The impact of belief at different levels on creativity manifests mainly in three ways, namely: (1) trust has a positive effect on creativity; (2) interpersonal trust helps to increase the shared creativity of the whole group through mediators such as team communication and shared commitment with security that evokes trust and motivation to take risks and (3) group trust has a positive, mostly indirect effect on creativity through mediating variables such as collaborative culture or climate and team communication (Perry-Smith & Mannucci, 2017). New digital technologies definitely help in the development of the creative process going further. Technology and creativity are related to each other through special segment and artistic segment (Bereczki & Kárpáti, 2021; Fragnito & Annarumma, 2014; Niemi, 2018).

The relationship between creativity and innovative behaviour

It is generally believed that there is a strong positive relationship between creativity and innovative behaviour, especially at the individual level. The team size affects the relationship between creativity and innovative behaviour, small teams need new, more creative ideas, but having too many team members hinders the interaction, coordination, exchange and participation necessary for the effective implementation of ideas (E.L. Telyani et al., 2022). Innovative behaviour that is performed by individual or employees in an organisation is a result of their intention to generate new ideas, processes and procedures. Creativity and innovation, which is the idea creation and idea implementation, are two interdependent aspects in an organisation (Karatepe et al., 2020). This is because creativity is considered an effective tool that enables employees to carry out innovative behaviour in carrying out their daily tasks. A number of scholars have also confirmed the existing relationship between creativity and innovative behaviour in different contexts (Abdullah et al., 2016; Carnevale et al., 2017; Karatepe et al., 2020; Tajeddini et al., 2020). Therefore, the hypothesis proposed is:

The relationship between innovative behaviour and trust in digital technology

Innovative organisations must create an environment of mutual trust within the company. Trust is an important factor in creating and facilitating innovative acceptance (Lazányi, 2017). Trust, security and innovative behaviour are closely intertwined. Innovative behaviour brings change, change brings risk, risk brings potential for failure and failure triggers various emotions that can stop or hinder trust.

When trust is built on purpose, innovative behaviour can thrive in business (Chen et al., 2021), in the realisation of practices that turn the idea into an innovative behaviour in new products, services and work practices. The open innovative behaviour paradigm has been successfully applied in high-tech settings. Innovative behaviour in information and communication technology is increasingly being used to monitor process paths, resulting in the creation of new value networks (Bencsik et al., 2022; Schwarzmüller et al., 2018):

The relationship between trust in digital technology and competitive advantage

Trust is the basis of every business relationship, especially when the relationship is maintained in the long term (Abosag & Lee, 2013; Mouzas et al., 2007), thus having an impact on competitive advantage. Business reputation will have an impact on trust that ultimately has an impact on competitive advantage; however, a negative company reputation can lead to various negative things, consequences such as low vendor reliability and distrusting customers so they are unable to face competitive advantage (Esenyel & Emeagwali, 2019). Digital technology is rapidly changing the basis of competitive advantage. Trust in digital disciplines is necessary for competitive advantage and explains how to transform industries as diverse as entertainment, pharmaceuticals and automotive (Awamleh & Ertugan, 2021):

Methodology and research design

This research is carried out using quantitative approach, which is aimed to understand the causal relationship between variables. This research used a survey because it was based on a number of variables that explain a phenomenon under study (MacKenzie & Lutz, 1989). The population in this study was SME entrepreneurs in the Special Region of Jogjakarta and West Java with a target of 300 SMEs. The authors conducted the study for 5 months, starting from February to June 2022. The respondents were asked to fill out the questionnaires for 2 weeks each. The sampling technique used was purposive random sampling. After sorting, it turned out that the sample collected and answered completely came from 206 SME women entrepreneurs. This study uses primary data, which is conducted by giving questionnaires to SME entrepreneurs in the Special Region of Jogjakarta and West Java. As this study used purposive sampling, there are several criteria that must be met by the respondents, namely (1) SMEs that had been operating for at least 3 years, (2) SMEs that had a net profit of IDR 5 million per month and (3) SMEs entrepreneurs whose education was at least high school. The first and second criteria are used to make sure that the SMEs have been through the business dynamics and completely understand their business. The third criterion is to indicate that the women entrepreneurs in SMEs are capable to anwers to the research question. The statistical model used is structural equation modelling (SEM) assisted by partial least square analysis techniques. The Likert scale technique was used with a score of 1 (strongly disagree) to 5 (strongly agree), which was used to measure the variables of creativity, trust in digital technology and innovative behaviour. Meanwhile, competitive advantage used a score of 1 (very not superior) to a score of 5 (very superior) compared with similar SMEs from competitors for the last 4 years. The results of the validity and reliability tests can be explained in the sub-explanation of the research results. The sources and the number of indicators for each variable are as follows:

Furthermore, the operational definitions and measurement of variables are as follows:

Results

Respondents’ description

The majority of respondents in this study had high school education (82%), came from SMEs that had been operating for at least 3 years (87%), came from SMEs that had a net profit of at least IDR 5m (78%) and came from SMEs that had a trading business type (78%).

Outer model evaluation

The author first carried out the outer model evaluation and identified that there is an item from creativity construct with a loading factor value of < 0.70, namely CR1. In innovative behaviour construct, there are three items with loading factor value of < 0.70, namely IB1, IB2 and IB3. Items with the loading factor value of < 0.70 are invalid and must be eliminated from the research model. Furthermore, the research model is revised, and the invalid items are dropped from the model. Finally, the output of outer loading after the research model is revised shows that all constructs with items or reflective indicator are valid.

Figure 2 displays the full model of the research after the invalid items that have loading factor value below 0.7 are eliminated from the research model. After it is confirmed that all items are valid, the researchers carried out the reliability test. Furthermore, hypothesis test is performed to explore the relationship between variables in the inner model evaluation.

Furthermore, the items have also met the criteria of reliability test. The output of construct reliability and validity indicates that the average variance extracted (AVE) value for all reflective construct is > 0.5; thus it has met the requirement for convergent validity and reliability. In addition, the value of composite reliability of all reflective construct belongs to very good category (> 0.70); thus it can be concluded that all indicators of reflective construct are reliable or have met the assumption of reliability test. More details about the value of each construct are shown in Table 1.

Inner model evaluation

Based on the results of data processing using partial least squares (PLS) version 23, the path results are obtained as shown in Table 2 as follows:

The output of path coefficient indicates that the variable of creativity does not have significant effect on competitive advantage. This finding is proven from the value of t-statistics of 0.855, or < 1.96; thus it can be stated that the first hypothesis is rejected. Moreover, the construct of innovative behaviour has a positive and significant effect on competitive advantage, which is proven from the findings of t-statistics value of 2.405 or > 1.96. Therefore, the second hypothesis is accepted. The construct of creativity is then found to have a positive and significant effect on trust in digital technology, which is proven from the value of of t-statistics of 3.405 or > 1.96. Therefore, the third hypothesis is accepted. The construct of creativity has a positive and significant effect on innovative behaviour, with the t-statistics value of 10.116 or > 1.96. This means that the fourth hypothesis is accepted. The construct of innovative behaviour has a positive and significant effect on trust in digital technology. This is indicated from the t-statistics value of 8.683 or > 1.96; thus the fifth hypothesis is accepted. Furthermore, the construct of trust in digital technology is found to not have a significant effect on competitive advantage. This is indicated by the findings of t-statistic value of 1.463 or < 1.96; thus the sixth hypothesis is rejected. Finally, the author carried out indirect effect testing to find out the mediating role of trust in digital technology. The indirect effect testing is performed using Sobel test. Based on the results of Sobel test, the t-statistics value (Table 2) indicates the value of 1.301, which is smaller than 1.96. This means that creativity cannot indirectly affect competitive advantage through trust in digital technology. In other words, the output of specific indirect effect indicates that the construct of trust in digital technology does not mediate the influence of creativity on competitive advantage; thus the seventh hypothesis is rejected.

Discussion

The purpose of this study is to investigate the impact of creativity on competitive advantage in mediating digital trust and innovative behaviour. This study involved SMEs in the Special Region of Jogjakarta and West Java, Indonesia. The results show that most respondents had high creativity and innovative behaviour that encouraged business development through new and original ideas, methods or objects. Those behaviours are needed to be able to survive. This becomes a challenge for entrepreneurs to face competitive advantage, and this has been proven in this research that creativity has an effect on competitive advantage as supported by research from Marković et al. (2012); Petrakis and Kafka (2016).

In understanding how to facilitate creativity throughout the organisation and to maximise employee creativity, innovative behaviour is required (Mumford et al., 2002). Khan and Mohiya (2020) recognised innovative behaviour as a series of direct processes from identifying problems, creating new creative ideas, evaluating and implementing them. So being creative is considered a prerequisite for innovative behaviour, and this study states that there is an influence of creativity on innovative behaviour, and this is supported by several researchers who state that the impact of HR practices can be explored on employee creativity and innovative behaviour (Panigrahy & Pradhan, 2015).

Trust in digital technology and creativity are the two fundamental elements that drive the reproduction and development of human society. Most studies regard trust in digital technology as a variable or construct of existing organisational theory, yielding inconsistent and mixed findings on the hierarchy of trust in digital (Chen et al., 2021; Wu et al., 2016). This study states that creativity affects trust in digital technology, but it also states that trust in digital technology does not affect the influence of creativity on competitive advantage. Trust in digital technology involves and has faith in others and goodness and intentions even when risk is involved. Therefore, creativity will emerge if there is digital trust from the organisation and from its customers, so that they are able to face a competitive advantage (Chen et al., 2021).

The existence of trust in digital technology will create a synergy effect and innovative ideas (Afsar et al., 2020; Song & Yu, 2018), and this supports this research where innovative behaviour affects trust in digital technology. This is supported by researchers who state that with trust in digital, innovative behaviour not only helps companies to avoid the social and economic costs of environmental destruction but also helps businesses to develop new market opportunities and competitive advantages.

Conclusion

The purpose of this study is to find out and determine the factors that predict competitive advantage in the company. Based on the discussion and results of hypothesis testing that has been carried out, it is known that not all of the hypothesis proposed are accepted. The direct effect of creativity on competitive advantage and trust in digital technology is rejected. However, the results also indicate that creativity has an influence on innovative behaviour. Innovative behaviour of employees is found to be able to affect competitive advantage and trust in digital technology. Similarly, trust in digital technology has a positive impact on competitive advantage. Finally, regarding this study does not confirm the indirect influence of creativity on competitive advantage through trust in digital technology.

Although this finding suggest that creativity does not have direct effect on competitive advantage, the role of creativity should not be neglected. Both managers and employees in the organisation still should consider creativity and enhance this aspect in their job as it is able to increase innovative behaviour, which then leads to competitive advantage. As explained before, competitive advantage is increasingly becoming a concern in this era, and it becomes the responsibility of the whole member of the organisations to achieve it. This study has identified the variables that can lead to competitive advantage, such as innovative behaviour and trust in digital technology. Therefore, these two aspects must be encouraged in the company. Managers and leaders must look for ways to increase their employees’ innovative behaviour and trust in digital technology. In addition, employees must also realise their important role to practice innovative behaviour, creativity and trust in digital technology, as they are also one of the main contributors that can lead companies to achieve competitive advantage.

This study has been carried out with the appropriate scientific rule, but it still has several limitations that need to be addressed. Firstly, the type of the data obtained in this study is cross-sectional data. Therefore, future studies should examine the linkage between variables used in this study using longitudinal data to find out more about the causality. Secondly, this study is carried out in the context of women entrepreneurs who run SMEs in developing countries, namely Indonesia. It is recommended for future studies to conduct research with this topic in different geographical context and populations, in order to ensure the generalisability of the result. Furthermore, this study has not yet addressed the mediating role of innovative behaviour in the relationship between creativity and competitive advantage; thus future studies can examine it. Finally, it is suggested for future studies to use moderating variable in testing the linkage between the variables, in order to find out more about the underlying conditions that can strengthen or weaken the relationship.

Acknowledgements

All authors have contributed in writing according to the writing contribution statement. R.P.S. conducted methodology, formal analysis, writing the original draft, visualisation, project administration, software validation, data curation resources, writing, reviewing and editing the draft and funding acquisition. Muafi conducted conceptualisation, investigation, writing, review and editing and supervise the process.

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.

The author(s) received no financial support for the research, authorship, and/or publication of this article.

The data that support the findings of this study are available on request from the corresponding author, R.P.S.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.

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Original Research

The effect of creativity and innovative behavior on competitive advantage in womenpreneur

Retno P. Setyaningrum, Muafi Muafi

Abstract

Introduction

Literature review

Creativity

Innovative behaviour

Trust in digital technology

Competitive advantage

The relationship between creativity and competitive advantage

The relationship between innovative behaviour and competitive advantage

The relationship between creativity and trust in digital technology

The relationship between creativity and innovative behaviour

The relationship between innovative behaviour and trust in digital technology

The relationship between trust in digital technology and competitive advantage

Methodology and research design

Results

Respondents’ description

Outer model evaluation

Inner model evaluation

Discussion

Conclusion

Acknowledgements

Competing interests

Authors’ contributions

Ethical considerations

Funding information

Data availability

Disclaimer

References