Entrepreneurial Leadership and Innovation Capabilities for Startup Growth in Emerging Digital Markets
Corresponding Author(s) : Dwi Andayani
Startupreneur Business Digital (SABDA Journal),
Vol. 4 No. 2 (2025): Startupreneur Business Digital (SABDA)
Abstract
Digital startups in Indonesia are facing increasingly fierce competition and rapid technological change. These conditions require companies to have a high level of adaptability to survive and thrive. The background of this research is based on the importance of entrepreneurial leadership and innovation capability as two factors believed to support business sustainability and growth in the digital era. The purpose of this research is to analyze the extent to which these two factors contribute to the growth of digital startups in Indonesia, particularly in the context of emerging markets that face different challenges than developed countries. The research was conducted using a quantitative survey based method. The instrument used was a questionnaire with a Likert scale of 1–5, distributed to founders and managers of digital startups in Indonesia. The collected data were then analyzed using multiple linear regression to examine the relationship between entrepreneurial leadership, innovation capability, and digital startup growth. The results show that entrepreneurial leadership has a positive and significant influence in providing visionary strategic direction, improving decision-making capabilities, and fostering business resilience in the face of market uncertainty. Meanwhile, innovation capability has been shown to play a crucial role in strengthening competitive advantage through the creation of digital products and services relevant to consumer needs. The conclusion of this study confirms that the synergy between entrepreneurial leadership and innovation capability is a key factor in driving the growth of digital startups in Indonesia. However, this study is still limited by a relatively small number of respondents. Therefore, future research is recommended to expand the sample size and consider additional variables, such as the role of the digital ecosystem, access to funding, and sustainability strategies, to provide a more comprehensive picture.
Keywords
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References
J. G. Mews, “Creating competitive advantage from strategy through execution: leading modern approaches in project portfolio management,” SAM Advanced Management Journal, vol. 90, no. 2, pp. 194–203, 2025.
K. Ercantan, S¸ . Z. Eyupoglu, and ¨O. Ercantan, “The entrepreneurial leadership, innovative behaviour, and competitive advantage relationship in manufacturing companies: A key to manufactural development and sustainable business,” Sustainability, vol. 16, no. 6, p. 2407, 2024.
E. E. Agu, U. S. Nwabekee, T. I. Ijomah, and O. Y. Abdul-Azeez, “The role of strategic business leadership in driving product marketing success: Insights from emerging markets,” International Journal of Frontline Research in Science and Technology, vol. 3, no. 02, pp. 001–018, 2024.
G. Ssekyanzi, M. J. Ahmad, and K.-S. Choi, “Sustainable solutions for mitigating water scarcity in developing countries: a comprehensive review of innovative rainwater storage systems,” Water, vol. 16, no. 17, p. 2394, 2024.
S. Yin, L. Liu, and T. Mahmood, “New trends in sustainable development for industry 5.0: digital green innovation economy,” Green and Low-Carbon Economy, vol. 2, no. 4, pp. 269–276, 2024.
I. Gupta and R. Nagariya, “The impact of cost-efficient market entry strategies on the growth and sustainability of digital startups in emerging markets,” in Innovating Cost-Efficient and Scalable Business Models in the Digital Era. IGI Global Scientific Publishing, 2026, pp. 97–132.
M. S. Chughtai, F. Syed, S. Naseer, and N. Chinchilla, “Role of adaptive leadership in learning organizations to boost organizational innovations with change self-efficacy,” Current Psychology, vol. 43, no. 33, pp. 27 262–27 281, 2024.
A. I. Ibeh, O. B. Oso, O. I. Alli, and A. O. Babarinde, “Scaling healthcare startups in emerging markets: A platform strategy for growth and impact’,” International Journal of Advanced Multidisciplinary Research and Studies, vol. 5, no. 1, pp. 838–854, 2025.
G. Zhang and M. Ravishankar, “The role of capabilities in digital service development and delivery: the case of start-up organisations,” Information Technology & People, vol. 37, no. 3, pp. 1156–1184, 2024.
F. Edobor and A. Sambo-Magaji, “Digital entrepreneurship: Opportunities and challenges,” Technology for Societal Transformation: Exploring the Intersection of Information Technology and Societal Development, pp. 63–99, 2025.
A. Jufri and I. Hadiwibowo, “The impact of strategic agility on msmes innovation driven by digital entrepreneurial leadership,” in E3S Web of Conferences, vol. 622. EDP Sciences, 2025, p. 04001.
W. A. Addy, A. O. Ajayi-Nifise, B. G. Bello, S. T. Tula, O. Odeyemi, and T. Falaiye, “Entrepreneurial leadership in high-tech industries: A review of key traits and success strategies,” GSC Advanced Research and Reviews, vol. 18, no. 2, pp. 286–296, 2024.
E. S´anchez-Garc´ıa, J. Mart´ınez-Falc´o, B. Marco-Lajara, and I. Gigauri, “Building the future through digital entrepreneurship and innovation,” European Journal of Innovation Management, vol. 28, no. 7, pp. 2873–2908, 2025.
O. P. Oyeyemi, A. J. Kess-Momoh, G. B. Omotoye, B. G. Bello, S. T. Tula, and A. I. Daraojimba, “Entrepreneurship in the digital age: A comprehensive review of start-up success factors and technological impact,” International Journal of Science and Research Archive, vol. 11, no. 1, pp. 182–191, 2024.
O. Prokopenko, M. J¨arvis, T. Bielialov, V. Omelyanenko, and T. Malheiro, “The future of entrepreneurship: Bridging the innovation skills gap through digital learning,” in International Conference Innovation in Engineering. Springer, 2024, pp. 206–230.
C.-L. Chang and E. Octoyuda, “Driving digital transformation: how transformational leadership bridges learning agility and digital technology adoption in msmes,” Emerging Science Journal, vol. 8, no. 4, pp. 1583–1596, 2024.
E. Y. Putra, Y. Masnita, H. L. Yusran, and R. Anggraini, “Leveraging digital transformation leadership and customer agility to enhance sme performance in the riau islands, indonesia,” International Journal of Business Ecosystem & Strategy (2687-2293), vol. 7, no. 2, pp. 219–231, 2025.
J. M. Gonzalez-Varona, A. L´opez-Paredes, D. Poza, and F. Acebes, “Building and development of an organizational competence for digital transformation in smes,” arXiv preprint arXiv:2406.01615, 2024.
S. Amit, R. Levermore, S. S. Noor, and A. A. Kafy, “Multidimensional analysis of entrepreneurial leadership and spatial innovation for sustainable startup success in emerging markets,” Business Strategy & Development, vol. 7, no. 3, p. e70005, 2024.
I. S. Al Koliby, N. A. B. Mehat, A. K. Al-Swidi, and M. A. Al-Hakimi, “Unveiling the linkages between entrepreneurial culture, innovation capability, digital marketing capability and sustainable competitive performance of manufacturing smes: evidence from emerging countries,” The Bottom Line, vol. 37, no. 4, pp. 473–500, 2024.
T. S. Taleb, N. Hashim, and N. Zakaria, “Entrepreneurial leadership and entrepreneurial success: The mediating role of entrepreneurial opportunity recognition and innovation capability,” Sustainability, vol. 15, no. 7, p. 5776, 2023.
G. Nicola and R. Setiawan, “Creating competitive advantage through digital innovation: Insights from startupreneurs in e-commerce,” Startupreneur Business Digital (SABDA Journal), vol. 3, no. 2, pp. 131– 140, 2024.
R. Somasundaram, S. Varalakshmi, H. Sanadi, R. Saini, S. Chinnusamy et al., “Entrepreneurship in emerging markets and intrapreneurship within organizations: Driving innovation,” in Real-World Tools and Scenarios for Entrepreneurship Exploration. IGI Global, 2025, pp. 291–322.
F. O. Usman, A. J. Kess-Momoh, C. V. Ibeh, A. E. Elufioye, V. I. Ilojianya, O. P. Oyeyemi et al., “Entrepreneurial innovations and trends: A global review: Examining emerging trends, challenges, and opportunities in the field of entrepreneurship, with a focus on how technology and globalization are shaping new business ventures,” International Journal of Science and Research Archive, vol. 11, no. 1, pp. 552– 569, 2024.
A. Rispal, “Driving innovation and entrepreneurship: A challenging era,” in Resiliency Strategies for Long-Term Business Success. IGI Global, 2025, pp. 29–50.
A. M. I. A. A. Ogundimu, “Digital entrepreneurship in emerging markets: Investigating the role of technology in driving economic growth and development,” 2025.
A. W. A. Rahman, T. Widiyatmoko, and M. Rakhmansyah, “The influence of entrepreneurial mindset and innovation on startup growth in the digital era,” Startupreneur Business Digital (Sabda Journal), vol. 4, no. 1, pp. 73–80, 2025.
U. S. Yadav, S. Vyas, Kanchan, I. Ghosal, and A. K. yadav, “Impact of entrepreneurial leadership, social media, digital technology, entrepreneurial orientation and innovation on business performance in the handicraft sector: Talent management as mediating construct,” Journal of Innovation and Entrepreneur- ship, vol. 13, no. 1, p. 72, 2024.
M. Alabi, “The role of leadership in fostering a technology-driven entrepreneurial mindset,” 2025.
P. T. Roundy, “Leadership in startup communities: how incubator leaders develop a regional entrepreneurial ecosystem,” Journal of Management Development, vol. 40, no. 3, pp. 190–208, 2021.
H. Khuan, E. Andriani, and A. Y. Rukmana, “The role of technology in fostering innovation and growth in start-up businesses,” West Science Journal Economic and Entrepreneurship, vol. 1, no. 08, pp. 348–357, 2023.
G. A. Pangilinan, S. Audiah, M. R. Shauqy, and O. F. P. Wahyudi, “Entrepreneurial marketing mindset as a determining factor for digital startup success,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 1, pp. 34–46, 2025.
I. W. R. Junaedi and D. Waruwu, “The role of founders’ entrepreneurial mindset in shaping the journey of digital startups,” American Journal of Business Science Philosophy (AJBSP), vol. 1, no. 2, pp. p201–210, 2024.
H. Hokmabadi, S. M. Rezvani, and C. A. de Matos, “Business resilience for small and medium enterprises and startups by digital transformation and the role of marketing capabilities—a systematic review,” Systems, vol. 12, no. 6, p. 220, 2024.
F. Kartika, “The role of innovation in startup success: A comprehensive review,” Advances: Jurnal Ekonomi & Bisnis, vol. 2, no. 1, pp. 46–58, 2024.
I. Amsyar, E. Cristhopher, U. Rahardja, N. Lutfiani, and A. Rizky, “Application of building workers services in facing industrial revolution 4.0,” Aptisi Transactions on Technopreneurship (ATT), vol. 3, no. 1, pp. 32–41, 2021.
I. Maria et al., “Unlocking success: Human resource management for startupreneur,” Startupreneur Business Digital (SABDA Journal), vol. 3, no. 1, pp. 89–97, 2024.
A. Chandratreya, “From start-up to scale-up leadership dynamics in entrepreneurial ventures,” in Entrepreneurship Innovation and Education for Performance Improvement. IGI Global, 2024, pp. 454–486.
J. D’Souza, “Entrepreneurial leadership strategies for catalyzing innovation performance,” Ph.D. dissertation, Walden University, 2023.
M. S. Mehmood, Z. Jian, U. Akram, and A. Tariq, “Entrepreneurial leadership: The key to develop creativity in organizations,” Leadership & Organization Development Journal, vol. 42, no. 3, pp. 434– 452, 2021.
N. Hajli, I. Baydarova, and T. Nisar, “Digital entrepreneurial ecosystem: the role of the sharing economy in driving innovation,” Entrepreneurship & Regional Development, vol. 37, no. 5-6, pp. 785–815, 2025.
S. Lotz, B. Verhage, E. Masele, C. Malanda, F. Hassan, and S. Grobbelaar, “The role of disruptive innovation in start-ups and transforming small business operations in the digital era,” South African Journal of Industrial Engineering, vol. 35, no. 4, pp. 104–115, 2024.
J. Siswanto, V. A. Goeltom, I. N. Hikam, E. A. Lisangan, and A. Fitriani, “Market trend analysis and data based decision making in increasing business competitiveness,” Sundara Advanced Research on Artificial Intelligence, vol. 1, no. 1, pp. 1–8, 2025.