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Enhancing SME Performance through Entrepreneurial Orientation: The Roles of Empowerment, Entrepreneurial Competence, and Technology Support

Sep 2026 · Natural Resources for Human Health · 0 citations · 33 references

Abstract

This study examines how SME empowerment, entrepreneurial competence, and technology support shape SME performance through entrepreneurial orientation in Baubau City, Indonesia. A quantitative explanatory, cross-sectional design was employed. Data were collected from 100 SME owners using a five-point Likert questionnaire with proportional representation of business categories and districts, subject to eligibility criteria, and analyzed using partial least squares structural equation modeling (PLS-SEM) in SmartPLS 4. The measurement model demonstrated satisfactory convergent validity and reliability. The structural model explained 44.5% of the variance in entrepreneurial orientation and 51.7% of the variance in SME performance. Empowerment had a strong positive effect on entrepreneurial orientation (β=0.535, p<0.001), while entrepreneurial competence also had a positive effect (β=0.199, p=0.028). Technology support did not significantly predict entrepreneurial orientation (β=0.055, p=0.570). SME performance was positively associated with empowerment (β=0.283, p=0.001), entrepreneurial competence (β=0.202, p=0.006), technology support (β=0.163, p=0.031), and entrepreneurial orientation (β=0.294, p<0.001). Entrepreneurial orientation mediated the empowerment–performance relationship (β=0.158, p=0.002), but did not mediate the competence–performance or technology–performance relationships. The findings indicate that entrepreneurial orientation is a selective strategic conversion mechanism: empowerment improves performance partly by strengthening proactive, innovative, and risk-oriented behavior, whereas competence and technology primarily contribute through direct pathways. The study advances an integrative strategic performance perspective for SMEs in an emerging, island-based regional economy.

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