FACTORS OF THE ADAPTATION AND CHANGE SKILLS OF HUNGARIAN MICRO AND SMALL ENTERPRISES

Micro and small enterprises (MSEs) are essential contributors to the global economy, playing a key role in gross domestic product, private sector employment, and the external trade balance. Despite their significance, they have historically been under-researched, particularly in the context of innovation, where much of the focus tends to be on larger corporations. The innovation of MSEs is critical for their long-term competitiveness and sustainability, yet many studies fail to explore the specific factors that drive this innovativeness within these smaller firms. The objective of this research was to address this gap by conducting a comprehensive investigation into the factors that influence the adaptability and change capabilities of MSEs, both of which are crucial for fostering innovation. A bibliometric analysis, spanning nearly fifty years of academic literature, was undertaken to identify the key factors that impact the innovativeness of MSEs. This analysis led to the identification of ten significant factors, among which dynamic capabilities—defined as a firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments—stood out as the most prominent. Dynamic capabilities allow firms to not only respond to change but to anticipate and shape future trends, positioning them as key drivers of innovation within MSEs. In addition to the literature review, an empirical study was conducted using data from 207 Hungarian entrepreneurs. The statistical analysis of this data revealed a verifiable relationship between several of the identified factors and the innovativeness of these enterprises. Specifically, creativity, workplace autonomy, and dynamic capabilities were found to significantly influence both employee support for innovation and openness to innovative ideas. This suggests that fostering a work environment that encourages creativity and provides employees with a high degree of autonomy can enhance innovation within MSEs. In contrast, the factors of proactiveness and competitive aggressiveness did not demonstrate a conclusive relationship with either employee support for innovation or openness to innovation in the areas examined. The research also found that while some factors aligned with initial expectations, others only partially supported the original hypotheses. For instance, while dynamic capabilities, creativity, and autonomy were strongly linked to innovativeness, other factors such as organizational culture and leadership style had a more complex or indirect relationship with innovation outcomes. Overall, the results of this study are largely consistent with the international literature on the subject, particularly in emphasizing the pivotal role of dynamic capabilities in driving innovation within MSEs. These findings provide important insights for both researchers and practitioners, highlighting the importance of creating an organizational environment that nurtures creativity, grants employees autonomy, and strengthens dynamic capabilities. By focusing on these areas, MSEs can better position themselves to innovate and remain competitive in an increasingly dynamic and complex business landscape. This research contributes to the ongoing dialogue on innovation in small enterprises and underscores the importance of tailoring strategies to enhance the specific strengths of MSEs.