Entrepreneurial Leadership and Its Influence on Small Firm Innovation Capability

Abstract

Entrepreneurial leadership plays a critical role in enhancing the innovation capability of small enterprises. Using a literature-based approach, this study examines how key elements of entrepreneurial leadership such as strategic vision, proactiveness, and risk-taking affect the development and implementation of innovation within small businesses. The findings reveal that entrepreneurial leadership contributes significantly to competitive advantage by fostering innovation in products, processes, and business models. Leaders who demonstrate entrepreneurial traits are more likely to establish an organizational culture that supports creativity, adaptive learning, and experimentation, which are essential for continuous innovation. Furthermore, innovation capability is not solely influenced by the individual characteristics of the leader but also by the structure of the organization, its internal culture, and the strength of its external networks. The study concludes that small enterprises require an adaptive leadership style that integrates both entrepreneurial and innovative dimensions as a long-term sustainability strategy. Embracing such a leadership model can enable small firms to navigate uncertainty and remain competitive in a dynamic business environment.