Developing a Green Innovation Model to Improve SME Performance in Supporting the Tourism Ecosystem in East Sumba Regency

Tourism Micro, Small, and Medium Enterprises (MSMEs) in underdeveloped regions play a crucial role in driving local economic development and sustaining the tourism ecosystem. Yet, they face limitations in innovation capacity and organizational performance. This study aims to develop and test a green innovation model to improve MSME organizational performance and strengthen the tourism ecosystem in East Sumba Regency, Indonesia. This study employed a quantitative approach, collecting data through questionnaires from tourism MSMEs, which were analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The results indicate that green innovation, represented by product value, technology, networking, marketing, and market demand, has a positive and significant impact on organizational performance, which, in turn, acts as a key mediator in improving ecosystem performance, as reflected in productivity and resilience. These findings confirm that the impact of green innovation on the tourism ecosystem is indirect and dependent on strengthening the operational and financial performance of MSMEs. The novelty of this study lies in integrating the empirical PLS-SEM model with an implementation approach, including the development of training modules and the digitalization of learning, in the context of 3T regions (Frontier, Outermost, and Underdeveloped). Limitations in this study use data from a single time period; further research is recommended to use multi-period data to capture the dynamics of change better.