Enhancing SME Performance: The Role of Predictive and Prescriptive Big Data Analytics Through Product and Process Innovation

Abstract

This study builds upon the theoretical foundation of the Resource-Based View Theory (RBVT), which posits that firm-specific resources and capabilities such as BDA can serve as sources of sustained competitive advantage. Specifically, this research aims to explore the role of BDA in fostering technological innovation and enhancing the performance of small and medium-sized enterprises (SMEs), which are vital contributors to economic development, especially in emerging economies. To empirically examine these relationships, we conducted a quantitative study involving a structured survey administered to 312 executives and managerial-level professionals working in various Chinese SMEs. The collected data were analysed using structural equation modelling (SEM) through AMOS software to validate the proposed conceptual framework and test the hypothesized relationships. The empirical findings reveal that both predictive and prescriptive forms of BDA have a significant positive impact on technological innovation, which encompasses both product and process innovation. In turn, these dimensions of technological innovation were found to have a strong positive effect on SME performance. Moreover, the results demonstrate that technological innovation acts as a mediating variable in the relationship between BDA and SME performance, suggesting that the influence of BDA on performance is channeled through innovation initiatives. These findings contribute to the existing body of knowledge by highlighting the strategic importance of big data capabilities in facilitating innovation and improving business outcomes among SMEs. From a practical standpoint, the results underscore the need for SME managers and policymakers to invest in advanced analytics infrastructure and foster a data-driven culture to achieve sustainable growth and competitive advantage. The study concludes with a comprehensive discussion of the theoretical and managerial implications, as well as recommendations for future research in this area.