Cleaner Production for Small and Medium Enterprises: An Open Innovation Perspective

Small and medium enterprises (SMEs) in the industrial district have their own advantages because they can share information, knowledge, and facilities in a communal way. However, the implementation of cleaner production in SMEs requires a process of innovation that is environmentally friendly. Open innovation enables organizations like SMEs to innovate better by adopting knowledge from outside of the organization. Cleaner production is a major factor to attain sustainability because it is part of the steps for sustainability process. Innovation is required in the adoption process of cleaner production to reach sustainability; not to mention it has a role in cleaner production activity. This research model consists of two second-order variables, i.e., open innovation climate, and open innovation. Based on hypothesis testing on modern SMEs, open innovation has a positive influence on cleaner production; and open innovation climate has a positive influence on open innovation modern SMEs; environmental dynamism and environmental competitiveness do not have a positive effect in moderating open innovation climate and open innovation. On the other hand, all hypotheses on traditional SMEs are confirmed to have a positive influence or/and positive effect; open innovation has a positive influence on cleaner production; open innovation climate also has a positive influence on open innovation; environmental dynamism and environmental competitiveness have positive effects in moderating open innovation climate and open innovation.