Model of Entrepreneurship and Digital Technology in Responding to Green and Non‐Green Innovation: Case Study of Batik SMEs in Indonesia

ABSTRACT Batik small‐medium enterprises (SMEs) in Indonesia are recognized for their economic potential in the creative industry sector. Nevertheless, their waste poses significant environmental concerns. Entrepreneurship, digital technology, innovation, and green innovation are understood to potentially enhance SMEs performance and contribute to environmental sustainability. However, empirical research exploring their interrelationship in practice, particularly among batik SMEs, remains scarce. This study aims to examine and construct an interrelationship model of entrepreneurship, digital technology, innovation, and green innovation from the cases of batik SMEs. Using eight case studies of batik SMEs in Cirebon and Pekalongan cities of Indonesia, this research finds that entrepreneurship through digital technology can support innovations, while digital technology can facilitate entrepreneurial activities. Entrepreneurship also promotes the implementation of green innovations supported by other factors, while digital technology enhances green innovations capability. The elaboration of the interrelationship and the role of other factors are detailed in this paper.