Innovation as a resilience-building strategy in micro-, small-, and medium-sized enterprises: An interpretative phenomenological analysis

Micro-, small-, and medium-sized enterprises (MSMEs) are pivotal to economic growth yet remain susceptible to crises due to resource constraints and market volatility. Building on the resource-based view (RBV) and dynamic capabilities (DC), we investigate how MSMEs cultivate resilience through innovation, strategic agility, and resource adaptability. Employing an interpretative phenomenological analysis (IPA) via semi-structured interviews with MSME owners and managers across various industries, we delve into the resilience strategies of MSMEs. Our findings highlight four essential resilience mechanisms—adaptive capacity, resource reconfiguration, learning integration, and strategic flexibility—that empower MSMEs to optimize resources, embrace digital transformation, and maintain operations. Furthermore, we identify the crucial role of service, process, marketing, and organizational innovation in enhancing adaptability and competitiveness. Additionally, we offer practical insights for policymakers, managers, and business leaders, emphasizing the necessity for targeted interventions to fortify MSMEs resilience in volatile environments.