Innovation as a Tool for Sustainable Development in Small and Medium Size Enterprises in Slovakia

Abstract

Background: In the current global market, innovations are one of the tools of sustainable development. Therefore, companies must change their attitudes toward innovation strategies in accordance with international and national environmental standards, laws, and market requirements. We often come across, in particular, the evaluation of economic factors of sustainability, which cannot capture the attitudes of companies to the solved issue of the perception of innovation as a tool of sustainable development. Therefore, the Kano model and cluster analysis are used to evaluate the attitudes of Slovak small and medium-sized enterprises towards innovation, and the aim of this paper is to evaluate innovation as a tool of sustainability in enterprises in Slovakia. Methods: This article’s main research method is the Kano model and cluster analysis. Conclusions: The findings of this paper reveal how small and medium-sized enterprises in Slovakia perceive innovation as a tool for sustainable development. Based on the results, we can state the positive attitude of small and medium-sized enterprises towards innovations supporting sustainable development, focusing on frugal innovations characterized by cost reduction, as well as innovation targeting functions, standards, laws, and performance optimization. They perceive these innovations as attractive and their implementation in corporate structures as a basic function for sustainable development through innovation.

1. Introduction

Sustainable development is a way of developing human society that reconciles economic and social progress with the full preservation of the environment for current and future generations. The preservation of the environment for future generations in the least altered form is one of the fundamental objectives of sustainable development. Since the Industrial Revolution, our civilization and economic development have been highly unregulated, which currently poses a danger to the lives of future generations. The implementation of sustainable development initiatives could mark the start of a quick, extensive, and global shift to an ecological economy that fosters growth through investments in natural resources and their preservation, on which society’s ability to live sustainably depends. At the same time, it marks the beginning of necessary reforms to the way that sustainable development is managed internationally. One way to achieve economic growth with added value is through the implementation of innovations in economic policy. The European Union responded to this global crisis related to sustainable development with its strategy, which aims to create an intelligent, sustainable, and inclusive economy in its countries [1]. The topic of innovation, sustainability, and the entire environmental agenda is a highly significant one and is included in innovation plans and strategies due to the state of the environment [2]. The Slovak Republic, along with every other EU member state, has developed its own national sustainable development strategy [1].

Currently, the rising usage of the environment results in its endangerment, resulting in a necessity to harmonize business activities and integrate activities with those aimed at conserving the environment. Slovakia’s environmental goals are being evaluated in terms of the concept of sustainable development, and the method for achieving these goals is green economics, using ecological innovations. It is a particular form of innovation that incorporates environmental responsibility, and its significance has increased in recent years [3]. Sustainability is dynamically developing and becoming a decisive part of the life of companies [4]. Companies change their behaviors due to opportunities presented by the adoption of environmental management practices as well as national and international regulations, consumer pressure, and other external factors [5].

Companies change their attitudes not only because they are forced by national and international standards and laws or consumer pressure but also because the adoption of environmental management strategies creates opportunities in the market [6]. Therefore, companies must develop such innovative practices to satisfy stakeholder expectations [7] and reorganize their activities by incorporating innovative concepts into their business processes [8]. Small and medium-sized companies have greater potential flexibility and closeness to the customer and an edge toward customization and innovation [9]. In recent years, the significance of managing specific business activities within the context of innovation as a tool for sustainable development has increased, which has both benefits and drawbacks for entrepreneurs.

Economic performance parameters, indices, etc., are increasingly used to assess sustainability and innovation—see research by Fiľa and Kučera [10], “The current state of innovation performance in Slovakia and Slovak SMEs. Productivity and innovation”, or by Jeck [11] “Ecological innovations in Slovakia: status, development and policies”. This thesis also evaluates the state of the environment in both Slovakia and the European Union through contextual factors and is based on standard metrics: eco-innovation-oriented R&D expenditure and patents, etc. However, this approach cannot capture the other dimensions of innovations for sustainability. The surveys carried out in the given issue are specific, such as the research “Innovation activities of gazelles in business services as a factor of sustainable growth in the Slovak Republic” [12], “Innovations and technologies in the context of sustainable development. Tools of environmental policy” [4] or “Ecological Innovation: Sustainable Development in Slovakia “ from the point of view of consumers and other. The existing studies do not present a broader view of the investigated issue of innovation as a tool for the sustainable development of small and medium-sized enterprises in Slovakia, and therefore, it can be perceived as a gap in the research. Therefore, the aim of the paper is to evaluate the attitudes of small and medium enterprises towards innovation as a tool of sustainability in Slovakia. The necessity to identify the strengths and weaknesses of this issue is derived from the change in user attitudes, which gives this research its significance. For the emphasis, the identification of the strengths and weaknesses can lead to efforts to transform these constraints into opportunities for businesses.

The research itself consists of several consecutive steps that are clearly demonstrated in the research roadmap, see Figure 1.

2. Research Subject and Problem

Introducing innovations (i), one of the tools for sustainable development can cause a dynamic shift from conventional practices to ecological ones to preserve the environment for future generations while also achieving economic growth. Businesses, therefore, need to operate in a favorable environment, enabling them to develop in an environmental direction. To mitigate this dynamic transition, the EU and Slovakia are working to put together various programs to encourage the introduction of innovations supporting sustainable development [13].

The business environment needs to be encouraged to adopt the respective implementation (iv) of these innovations. These kinds of innovation lead to green business promotion based on ecological innovation (ii) as a tool for sustainable development, which would be successful if it helps to eliminate unfavorable effects on environmental protection.

Ecological innovations are both new products (v) and processes (vi) that provide value to the customer and the company while also having a significant reduction of the negative impact on the environment [13]. In the European context, according to the European Commission, green innovation refers to any form of innovation that leads to significant and demonstrable progress towards the goals of sustainable development through reducing the impact on the environment or achieving more efficient and responsible use of natural resources, including energy [14]. Businesses should be supported to adopt innovations that help sustainable development and to adopt a different approach to their business strategy (iii) because their business activity mitigates negative impacts on the environment. According to new classical theories, the rate of contribution of technological innovation determines the viability of the economy [15].

Innovation has emerged as a major force and driver behind sustainable development as a result of the differences among limited natural resources, climate change, and other environmental issues, as well as risks to economic progress, performance, and efficiency, as increasing labor productivity through innovation (vii), increase in turnover through innovation (viii), increasing the company’s market share through innovation (xi), increasing profits through innovation (xii), cost reduction through innovation (xiii), high costs for the implementation of innovations (xv) or profitability of investments in innovations and the innovation (xvi). In this case, innovation can represent a way of balancing the interest in the natural environment and economic growth. Reconciling the economic and environmental performance of enterprises will represent the improvement of the environment (ix) and the increase of competitiveness (x) through ecological innovations. Therefore, eco-innovations offer a chance to achieve sustainability through efficient use of natural resources, eliminating environmental shocks, environmental impacts, and market pressure without delaying economic growth [16,17,18,19,20].

Considering the aforementioned, the main research issue is the perception of innovation by small and medium-sized enterprises in Slovakia as a tool for developing sustainability. The main research issue led to the establishment of three research objectives, followed by research hypotheses arising from them, see

Table 1. The determination of research objectives and hypotheses.

The Research Issue: Perception of Innovation as a Tool for the Developing of Sustainability by Small and Medium-Sized Enterprises in Slovakia.
Research objective 1	To find out whether small and medium-sized enterprises in Slovakia consider innovation as a tool for developing sustainability	Hypothesis 1: Innovations are a tool for developing the sustainability of small and medium-sized enterprises in Slovakia.
Research objective 2	To find out whether small and medium-sized enterprises in Slovakia implement innovations for compliance with standards (law) related to sustainable development.	Hypothesis 2: Small and medium-sized enterprises in Slovakia will implement innovations for compliance with standards (law) related to sustainable development.
Research objective 3	To find out whether small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development.	Hypothesis 3: Small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development.

.

Research objective 1: To find out whether small and medium-sized enterprises in Slovakia consider innovation as a tool for the development of sustainability.

The importance of innovations for sustainability is a clear quality of its development. As reported by Sachs et al. [21], the intention of sustainability is based on the group of stakeholders, participants, and workforce (xix) and appears mainly through the exchange of information (xxi), knowledge and resources (xviii) at social levels within the framework of the cooperation of interested subject participants (xx). The usefulness and relevance of providing information for interested participants lead them to make prudent decisions and steps within the implementation process, with a focus, for example, on the profitability of investments in innovations and the innovation process (xvi) and innovation risk (xvii) [22,23,24,25,26]. To succeed in the next decade, stakeholders will need to demonstrate foresight as they navigate the rapidly changing environment of organizational forms and demands not only of the market but also of individual skills that lead to the success of small and medium-sized organizations to improve intra-business practices and business growth [27,28] and sustainable development.

Based on the above, we can understand the implementation of innovations as a tool for sustainable development as a desire for a better and sustainable environment, not only social but also business. However, the definition is not sufficient to apply to the phenomenal character of sustainability intention. It is especially important when the intention of sustainability is not just an idea but develops through the interaction of interested subject participants [22,23,29,30].

Based on the above, we assume:

Hypothesis 1:

Innovations are a tool for developing the sustainability of small and medium-sized enterprises in Slovakia.

Research objective 2: To find out whether small and medium-sized enterprises in Slovakia implement innovations for compliance with standards (law) related to sustainable development.

The EU, as a primary participant in environmental standards (xiv.), has developed them over several decades, and these standards belong to the strictest in the world. Environmental policy guides the EU’s economy to be more environmentally friendly, protect natural resources, and preserve people’s health. Sustainable development is the overarching goal of the EU, which advocates for a “high level of protection and improvement of environmental quality,” and it is a common vision by 2050 [31].

Based on the OECD environmental performance assessment [32], the Slovak Republic is among the EU countries with the most severe penalties for non-compliance with laws in this area. However, such strict environmental rules can be considered harmful to the productivity and competitiveness of companies, as it leads to an increase in costs for companies (xv.) [7,8].

Based on the above, we assume:

Hypothesis 2:

Small and medium-sized enterprises in Slovakia will implement innovations for compliance with standards (law) related to sustainable development.

Research objective 3: To find out whether small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development.

The increased costs associated with the innovation process supporting sustainability represent barriers. Sustainability intention refers to desires and attitudes towards sustainability [32] to implement innovations in a wide range of sustainability functions with social values that exceed financial motivation (xxii.), along with patterns of tolerance of other factors such as bureaucracy (xxiii.), etc. This represents the so-called dynamic capabilities of the companies as “the ability of an organization to integrate, build and reconfigure internal and external competencies to address exceedingly changing environments” [33,34]. The intention is considered valuable because it pushes innovation for a net positive return to society and is thus a tool for sustainable development.

The indexes analysis of innovation, sustainability, and eco-innovation indicate that, in general, Slovakia is in the group of countries that are moderate innovators, with innovation performance below the European Union average. Eco-innovation generally positively influences the environmental, economic, and social growth of companies that gradually adopt sustainable development [11,18,35,36,37]. Small and medium-sized businesses in Slovakia cite a lack of funding sources as the biggest barrier to the development of innovative activities, according to Lesáková [37]. Low awareness about the influence of innovations on their economy and competitiveness was highlighted as a contributing factor to small and medium enterprises’ lack of innovation.

Based on the above, we assume:

Hypothesis 3:

Small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development.

3. Materials and Methods

This article’s main research method is the Kano model, which evaluates innovations as tools for sustainability in Slovak companies. Most of the research aimed at evaluating innovation and sustainability in Slovakia uses indices, economic performance indicators [6,11], or database surveys [12,33] for evaluation. Research aimed at the perception of this issue by the small and medium-sized companies in Slovakia is limited and carried out by the questionnaire survey. Questionnaire inquiry is one of the most used methods in the framework of research due to its anonymity and the least forced form of feedback for determining the attitudes, satisfaction, and perceptions of users. However, in addition to these and other advantages, questionnaire inquiry also has several disadvantages [38]. Trying to solve the inherent shortcomings of the traditional inquiry method, this research proposes the use of the Kano analytical model to investigate users’ satisfaction. As Jain and Singh [39] stated, human mentality and behavior are accompanied by uncertainty, and traditional questionnaires are always over-interpreted. The Kano model is designed to include not only quantitative but also qualitative measures. The priority of the researched innovation as a tool for sustainable development in Slovakia is justified using the Kano model; the purpose of the Kano model is to identify users’ attitudes according to the desires for analyzed parameters [40,41]. The Kano model is a two-dimensional quality model based on the concept of users’ quality. This model helps decision makers to know the level of satisfaction perceived by the respondent.

The Kano model is an approach to prioritizing features in companies’ strategies according to how likely they are to meet user needs and requirements. Based on the detected attitudes, the satisfaction function and its implementation costs can be taken into consideration, along with the function’s value for businesses.

Managers often use the Kano model to identify the potential function of innovations by grouping them into categories. These feature categories are used to identify innovations that do not satisfy the user’s requirements (contradictory—R, non-influential—I, or ambiguous—Q) to those that satisfy user requirements (must be met—M, attractive—A, or one-dimensional—O), according to [16]:

• M—Mandatory requirements or basic (threshold) features—these requirements must be met. They are very important from the point of view of user´s attitudes.
• O—One-dimensional requirements or performance features—are linearly dependent on fulfillment and user satisfaction.
• A—Attractive requirements or excitement features- user´s r satisfaction grows exponentially with the fulfillment of requirements.
• I—Indifferent requests do not affect user satisfaction.
• R—The exact opposite requirements present conflicting user´s attitudes.
• Q—Represents ambiguous requirements, where the user´s cannot express himself clearly.

We chose the Kano model as our primary research methodology because it distinguishes itself from other techniques by clearly classifying attitudes into distinct functions [16,42,43]. Based on the literature review, the Kano questionnaire was constructed using the following research factors, as they are identified in the Section 2:

i.

innovations

ii.

ecological innovations

iii.

the importance of innovations for the company’s strategy

iv.

implementation of innovations

v.

product innovation

vi.

process innovations

vii.

increasing labor productivity through innovation

viii.

increase in turnover through innovation

ix.

reducing environmental impacts through innovation

x.

growth of competitiveness through innovation

xi.

increasing the company’s market share through innovation

xii.

increasing profits through innovation

xiii.

cost reduction through innovation

xiv.

compliance with standards (laws) through innovations

xv.

high costs for the implementation of innovations

xvi.

profitability of investments in innovations and the innovation process

xvii.

innovation risk

xviii.

experience and know-how with the implementation of innovations and the innovation process

xix.

workforce in the implementation of innovations

xx.

cooperation in the implementation of innovations

xxi.

information for the implementation of innovations and their support

xxii.

financial means for innovation and the innovation process

xxiii.

bureaucracy

The significance of the generalization of the investigated research factors based on the research subject and problems is based on the application of sustainability practices of business subjects to posting their attitudes on the given issue. Similarly, significance includes ascertaining awareness of risks or barriers that occur during the implementation of innovations supporting sustainable development, which may represent negative externalities of sustainability [42]. The significance of the generalization of the issue supports unambiguous information for interested participants to accept ethical risk and create long-term net positive values not only for markets but also for society [22,23,42,43].

Following the guidelines of the Kano model, these research factors were subsequently included in the Kano questionnaire. As part of the Kano questionnaire, we asked users: “How positively do you perceive the following parameters as a tool for sustainable development?”, or “How negatively do you perceive the mentioned parameters as a tool for sustainable development?” Respondents were given the chance to express their opinions about the research parameters on a Likert scale (5 absolutely positive to 1 absolutely negative) twice (once in the form of a positively expressed question and once in the form of a negatively structured question). The Kano questionnaire was designed to assess how businesses in Slovakia perceive innovations in the corporate environment as a tool for sustainability.

As part of the questionnaire measurements, a sample of respondents was chosen. There were 217 respondents in the sample (managers, business owners, etc.). This number of respondents corresponds to a minimum sample of 168 respondents at a confidence level of 99%, a permissible margin of error of 10%, and a variance of 50% from the point of view of the number of small and medium-sized enterprises in Slovakia, see Formula (1) calculation of sample respondents:

$$\mathrm{n}=\frac{\left({\mathrm{x}}^2\times \mathrm{p}\times \left(1-\mathrm{p}\right)\right)+{\mathrm{e}}^2}{{\mathrm{e}}^2+{\mathrm{z}}^2\times \mathrm{p}\times \frac{(1-\mathrm{p})}{\mathrm{N}}}=168\mathrm{r}\mathrm{e}\mathrm{s}\mathrm{p}\mathrm{o}\mathrm{n}\mathrm{d}\mathrm{e}\mathrm{n}\mathrm{t}\mathrm{s}$$

(1)

where:

• n—sample respondents
• N—the number of small and medium enterprises in Slovakia—634,309
• e—permissible margin of error—10%
• p—dispersion—50%
• z—level of reliability—99% [44,45].

The majority of the research sample consisted of experts (57.60% of all answers). 35.02% of the respondents were limited liability companies, 6.45% were joint-stock companies, and only 0.92% were cooperatives. According to the number of employees, companies with 0–9 employees made up the highest representation (74.19%); for more information. From the point of view of the sectoral structure of small and medium-sized enterprises in Slovakia, we inquired about the following sections of companies according to the Classification of economic activities SK NACE Rev. 2: Agriculture, forestry, and fishing—12.9%; Section C—Manufacturing—11.52%; Section F—Construction—17.51%; Section G—Wholesale and retail trade—17.97%; Section H–J—Transport, information, and communication—8.29%; Section I—Accommodation and catering sector—1.84%; Section K–N—Business services—23.96%, and Section P–S—other services 5.99%, see

Table 2. Descriptive statistics—Sample of respondents.

Factors n = 217	Specification	Multiplicity
		Absolute	Relative
Type business	Self-employed	125	57.60
	Limited liability companies	76	35.02
	Stock company	14	6.45
	Cooperative	2	0.93
Number of employees	0–9	161	74.19
	10–49	44	20.28
	50–249	12	5.53
	250 and more	0	0.00
NACE	Section A—Agriculture, forestry, and fishing (A 01–03) *	28	12.90
	Section C—Manufacturing (C.10–11; C.14–15; C.29; C.30; C.33) *	25	11.52
	Section F—Construction (F.41-F.43) *	38	17.51
	Section G—Wholesale and retail trade (G.45–46) *	39	17.97
	Section H–J—Transport, information, and communication (H.49–53; J.58–63) *	18	8.29
	Section I—Accommodation and catering sector (I.55–56) *	4	1.86
	Section K–N—Business services (K.64–66; L.68) *	52	23.96
	Section P–S—other services (S.94–96) *	13	5.99

* Investigated enterprises within SK NACE Rev. 2.

.

The selection was made randomly so that the sample of respondents was representative. We tried to maintain a similar structure of the sample as the representation of enterprises in Slovakia, according to the data of the register of organizations of the Statistical Office of the Slovak Republic [44]. In Slovakia, according to the report of the Slovak Business Agency, processed in accordance with the data of the register of organizations of the Statistical Office of the Slovak Republic, there are 55.21% of active entrepreneurs, 40.58% of companies and 4.19% of other business entities. From the point of view of the number of employees, there are the most companies in Slovakia with the number of employees 0–9, up to 97.1%. Companies with 10–49 employees represent 2.1%, companies with 50–249 employees represent 0.4%, and the rest are large enterprises with 250 or more employees. In the sectoral structure of small and medium-sized enterprises in Slovakia, the largest representation of companies operating in business services is 27.7% (section SK NACE K to N). The second most represented branch is construction, where 18.9% of active SMEs operate. This is followed by trade, in which 16.1% performed their main business activity. 13.4% of active small and medium enterprises did business in the industry sector. A lower representation of 8.8% is achieved by small and medium-sized enterprises in the sector of transport, information, and communication activities—section SK NACE H, J and also SMEs performing their main business activity in other services—SK NACE P to S—8.0%. In the sectoral structure of SMEs, it already has the lowest long-term representation of the agricultural sector (3.9%), together with the accommodation and catering sector (3.2%).

Subsequently, a study was conducted in Slovakia, and the information gathered revealed the respondents’ requirements for the examined factors in accordance with the Kano model,

Table 3. KANO model—table for cross-evaluation [16,18,39,40,43,44].

		The Dysfunctional Question
		Absolutely Positive	Positive	Neutral	Negative	Absolutely Negative
The Functional Question	Absolutely positive	Q	A	A	A	O
	Positive	R	I	I	I	M
	Neutral	R	I	I	I	M
	Negative	R	I	I	I	M
	Absolutely negative	R	R	R	R	Q

.

Thus, the following attitudes toward innovation as a sustainable strategy in Slovak companies were determined for the studied factors as follows: attractive or excitement (A), mandatory or basic (M), reverse (R), one-dimensional or performance (O), questionable (Q) or indifferent (I) requirements or features.

According to the Kano model, the total strength of the parameter was subsequently determined according to Equation (2) using [16]:

$$\mathrm{T}\mathrm{o}\mathrm{t}\mathrm{a}\mathrm{l}\mathrm{S}\mathrm{t}\mathrm{r}\mathrm{e}\mathrm{n}\mathrm{g}\mathrm{t}\mathrm{h}=\frac{\mathrm{A}+\mathrm{M}+\mathrm{O}}{\mathrm{A}+\mathrm{M}+\mathrm{O}+\mathrm{I}+\mathrm{Q}+\mathrm{R}}$$

(2)

For statistical testing of established hypotheses (according to the relevant literature), it is necessary to create two hypotheses:

-

tested, which we formulated as null—H₀

-

and the alternative, which we label H₁, see

Table 4. Research hypotheses.

Research Questions/Hypotheses		Null and Alternative Statistical Hypotheses		Investigated Research Parameters Corresponding to the Hypothesis
H1	Innovations are a tool for developing the sustainability of small and medium-sized enterprises in Slovakia	H0	Innovations are not a tool for developing the sustainability of small and medium-sized enterprises in Slovakia	i.	innovations
		H1	Innovations are a tool for developing the sustainability of small and medium-sized enterprises in Slovakia
H2	Small and medium-sized enterprises in Slovakia will implement innovations for compliance with standards (law) related to sustainable development	H0	Small and medium-sized enterprises in Slovakia will not implement innovations for compliance with standards (law) related to sustainable development	xiv.	compliance with standards (laws) through innovations
		H1	Small and medium-sized enterprises in Slovakia will implement innovations for compliance with standards (law) related to sustainable development
H3	Small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development	H0	Small and medium-sized enterprises in Slovakia do not encounter various barriers when introducing innovations as a tool for sustainable development	parameters identified by the Kano model as opposite requirements
		H1	Small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development

.

The null hypothesis H₀ is formulated negatively, and the alternative hypothesis H₁ is formulated as the invalidity of H₀, i.e., that the observed effect did not arise by chance.

The p-value was calculated to determine the significance value of the investigated parameters. The p-value is a numerical value used for statistical hypothesis testing. The p-value is a number between 0 and 1, where a p-value less than the significance level α means the null hypothesis is rejected and the hypothesis H₁ is accepted. An alpha value of 0.05 is commonly used. If p < α − 0.05, the H₀ hypothesis is rejected, and the H₁ hypothesis is accepted at the 95% significance level. If p < α − 0.01, the H₀ hypothesis is rejected, and the H₁ hypothesis is accepted at the 99% significance level [46,47].

A cluster analysis of the data was then performed to classify the researched parameters empirically. Using cluster analysis, we will identify similar objects in empirical data. By cluster analysis, we found out whether the studied parameters are similar so that they can be assigned to groups or clusters. An analysis of this kind produces a typology of the investigated parameters [47,48,49]. The output of the process of clustering object distances is a dendrogram presenting a graphical grouping of related objects in clusters. The Ward method was used within the algorithms of agglomerative clustering [17]. It connects clusters in which the increment of the total intragroup sum of squares of deviations of individual values from the cluster averages is minimal, which is important to interpret the whole analysis.

Statistical testing of the data was carried out using the SPSS Statistics software 20.

4. Results

The established research technique was used to determine how Slovak companies regarded innovation as a sustainable tool. The findings of a study on innovation as a sustainable tool in Slovak companies are presented in

Table 5. Perceptions of innovation supporting sustainability development.

Properties n = 217		A		I		M		O		Q		R		Category Requirement	Total Strength	p-Value
		Multiplicity		Multiplicity		Multiplicity		Multiplicity		Multiplicity		Multiplicity
		Absolute	Relative	Absolute	Relative	Absolute	Relative	Absolute	Relative	Absolute	Relative	Absolute	Relative
Perception of innovation as tools sustainable	innovations	86	39.63	64	29.49	10	4.61	28	12.90	14	6.45	15	6.91	A	57.14	0.00384
	ecological innovations	7	3.23	99	45.62	6	2.76	0	0.00	16	7.37	89	41.01	I	5.99	0.00552
	the importance of innovations for the company’s strategy	10	4.61	129	59.45	14	6.45	24	11.06	2	0.92	38	17.51	I	22.12	0.00576
	implementation of innovations	18	8.29	61	28.11	127	58.53	8	3.69	3	1.38	0	0.00	M	70.51	0.00608
	product innovation	72	33.18	59	27.19	13	5.99	3	1.38	0	0.00	70	32.26	A	40.55	0.00419
	process innovations	34	15.67	76	35.02	10	4.61	4	1.84	4	1.84	89	41.01	R	22.12	0.00461
	increasing labor productivity through innovation	14	6.45	111	51.15	2	0.92	0	0.00	14	6.45	76	35.02	I	7.37	0.00564
	increase in turnover through innovation	6	2.76	175	80.65	8	3.69	6	2.76	0	0.00	22	10.14	I	9.22	0.00836
	reducing environmental impacts through innovation	36	16.59	153	70.51	6	2.76	6	2.76	2	0.92	14	6.45	I	22.12	0.00715
	growth of competitiveness through innovation	14	6.45	173	79.72	10	4.61	4	1.84	0	0.00	16	7.37	I	12.90	0.00822
	increasing the company’s market share through innovation	16	7.37	165	76.04	8	3.69	6	2.76	0	0.00	22	10.14	I	13.82	0.00777
	increasing profits through innovation	16	7.37	165	76.04	10	4.61	4	1.84	0	0.00	22	10.14	I	13.82	0.00777
	cost reduction through innovation	100	46.08	81	37.33	8	3.69	6	2.76	0	0.00	22	10.14	A	52.53	0.00527
	compliance with standards (laws) through innovations	11	5.07	74	34.10	85	39.17	1	0.46	0	0.00	46	21.20	M	44.70	0.00460
	high costs for the implementation of innovations	51	23.50	66	30.41	0	0.00	0	0.00	26	11.98	74	34.10	R	23.50	0.00396
	profitability of investments in innovations and the innovation process	35	16.13	79	36.41	0	0.00	0	0.00	14	6.45	89	41.01	R	16.13	0.00480
	innovation risk	32	14.75	74	34.10	0	0.00	0	0.00	18	8.29	93	42.86	R	14.75	0.00477
	experience and know-how with the implementation of innovations and the innovation process	19	8.76	85	39.17	0	0.00	0	0.00	4	1.84	109	50.23	R	8.76	0.00589
	workforce in the implementation of innovations	29	13.36	85	39.17	0	0.00	0	0.00	6	2.76	97	44.70	R	13.36	0.00537
	cooperation in the implementation of innovations	29	13.36	80	36.87	0	0.00	0	0.00	12	5.53	96	44.24	R	13.36	0.00511
	information for the implementation of innovations and their support	21	9.68	100	46.08	0	0.00	0	0.00	6	2.76	90	41.47	I	9.68	0.00566
	financial means for innovation and the innovation process	55	25.35	68	31.34	0	0.00	0	0.00	18	8.29	76	35.02	R	25.35	0.00420
	bureaucracy	45	20.74	90	41.47	0	0.00	0	0.00	12	5.53	70	32.26	I	20.74	0.00467

. In the framework of the development of sustainability, Slovak companies perceive the implementation of innovations to comply with standards or laws as basic or mandatory requirements. The innovations themselves, with an emphasis on product innovations and innovations aimed at reducing costs in production, are among the attractive requirements. They have a negative or contradictory perception of process innovations, high costs of investments in the implementation of innovations, increase in profit after the implementation of innovations, high innovation risk, knowledge, and know-how in the implementation of innovations, workforce within the innovation process, cooperation in innovations and, last but not least, financial resources on the implementation of innovations.

In order to create as much resemblance (within the group) and as much difference (between the separate groups) as possible, the investigated factors were grouped using the cluster analysis. The aim of this analysis was to minimize the variability of the variables within the cluster and, at the same time, maximize the variability between the clusters for the classification of the investigated factors into similar groups, Figure 2.

The evaluated factors were divided into two groups (clusters) according to the cluster analysis, where the maximum Euclidean distance between the clusters was identified at a value of 20,

Table 6. Clusters to research parameters.

Cluster 1	Cluster 2
innovations	high costs for the implementation of innovations
ecological innovations	profitability of investments in innovations and the innovation process
the importance of innovations for the company’s strategy	innovation risk
implementation of innovations	experience and know-how with the implementation of innovations and the innovation process
product innovation	workforce in the implementation of innovations
process innovations	cooperation in the implementation of innovations
increasing labor productivity through innovation	information for the implementation of innovations and their support
increase in turnover through innovation	financial means for innovation and the innovation process
reducing environmental impacts through innovation	bureaucracy
growth of competitiveness through innovation
increasing the company’s market share through innovation
increasing profits through innovation
cost reduction through innovation
compliance with standards (laws) through innovations

.

5. Discussion

The findings of this paper reveal how small and medium-sized enterprises in Slovakia perceive innovation as a tool for sustainable development.

Based on the cluster analysis, we grouped the identified attitudes of small and medium enterprises into two clusters. The first cluster consists of innovations, ecological innovations, the importance of innovations for the company’s strategy, implementation of innovations, product innovation, process innovations, increasing labor productivity through innovation, increase in turnover through innovation, reducing environmental impacts through innovation, growth of competitiveness through innovation, increasing the company’s market share through innovation, increasing profits through innovation, cost reduction through innovation and entering foreign markets through innovation. According to the Kano model’s findings, these are classified as being either basic (M—mandatory—must be fulfilled), attractive (A), or having no influence (I). We can conclude from the foregoing that this cluster consists of factors that entrepreneurs regard to be required as necessary in varied degrees of importance for the application of innovations as a tool of sustainable development (from M—basic to I—non-influential requirements). Entrepreneurs in Slovakia have a very positive perception of innovations as such within the framework of sustainable development (as attractive—A), which is confirmed by the results of research by Coronado et al. [26], who claim that innovations have a significant and positive impact on the attitude of society. Therefore, in light of the research findings for research question/hypothesis 1, we reject statistics hypothesis H₀ and accept hypothesis H₁, i.e., Innovations are a tool for developing the sustainability of small and medium-sized enterprises in Slovakia—the p-value < α = 0.00384 < 0.001, therefore we accept the hypothesis at the significance level of 99%. Other research parameters are equally statistically significant at the 99% significance level (their p-value < α = 0.01), as they are the tools of sustainable development.

Small and medium-sized enterprises in Slovakia focus their innovation activities more on product innovations, which they view as fundamental (M- mandatory) and which, according to Kliuchnikova [50], they see as a tool for transforming and modernizing products to affect the company’s competitiveness on the market. Additionally, the introduction of new technologies allows the company to gain an advantage in the creation of new products that enable it to expand its operations internationally and thereby access new markets. At the same time, these innovations are less demanding than process innovations [50,51], which may be the reason why organizations have a contrary perception of process innovations (R). As attractive (A), companies in Slovakia mainly consider cost reduction through the implementation of innovations. Such innovations are also called frugal innovations. They are characterized by a significant reduction in costs, a focus on basic functions, and an optimized level of performance [14,52,53]. They are considered a way to meet the needs of the Bottom of The Pyramid [54,55]. Such an innovation strategy—satisfying needs at the Bottom of The Pyramid—is focused on active value propositions for its target customer groups by focusing on basic functions and thus minimizing material and financial resources in the entire value chain. These innovations are therefore aimed at implementing product innovations for the customer (product innovation—A, innovation—A, introducing innovation—M), while companies meet prescribed standards (laws) or even exceed them [5,55]. As stated by several authors, there is a positive connection between frugal innovations and sustainability, which confirms that innovations represent a key tool for sustainability in small and medium-sized enterprises in Slovakia. Therefore, we accept research question/hypothesis 2 and reject the statistical hypothesis H₀ and accept the hypothesis H₁, i.e., Small and medium-sized enterprises in Slovakia will implement innovations for compliance with standards (law) related to sustainable development, because the p-value < α (0.00460 < 0.001), therefore we accept the hypothesis at the significance level of 99%.

The second cluster consists of high costs for the implementation of innovations, the profitability of investments in innovations and the innovation process, innovation risk, experience and know-how with the implementation of innovations and the innovation process, workforce in the implementation of innovations, cooperation in the implementation of innovations, information for the implementation of innovations and their support, financial means for innovation and the innovation process and bureaucracy. Most of the factors in the second cluster are perceived as contradictory by small and medium enterprises in Slovakia. The results of experimental scenarios with practical managers [56] support our results, where innovation is perceived by managers in enterprises as linkages with stakeholders positively, while linkages associated with the implementation of innovations (competition, cooperation, information during innovations, etc.) perceive as a negative signal (opposite—R). Their absence, which entrepreneurs in Slovakia perceive as being problematic, can be used to characterize these aspects’ contrasting perceptions. Human capital in companies represents a set of skills, knowledge, abilities, and characteristics contained in people (know-how). It is crucial for the ability of companies to implement the innovation process [57]. Employees and know-how are the drivers of innovation at the corporate level, and relevantly motivated human capital supports the development of these innovations [57] at all levels within sustainable development. Our findings support those of the Slovak Business Agency [58], which identified the main barriers to the adoption of innovations in Slovakia’s small and medium-sized enterprises, including high costs of innovations (R), too high competition on the market, lack of cooperating partners (R), lack of qualified employees (R), difficulties in obtaining state subsidies or grants for innovations as a tool for sustainable development in Slovakia (lack of information—R and bureaucracy—R, lack of finance for innovations—R, etc.), as well as according to Lesáková [37], who also emphasizes lack of funding sources and low awareness as the biggest barrier to the development of innovative activities in Slovakia.

Despite the mentioned facts, it is positive that there remains a clear commitment among entrepreneurs to innovations supporting sustainable development (despite the fact that the economy is currently very affected by strong inflation, the invasion of Ukraine, etc.). Small and medium-sized enterprises in Slovakia are conscious of the crucial role of innovation within the entire environmental agenda and sustainable development [2] and are aware of environmental responsibility [3]. Many invest more in innovations aimed at creating innovative measures (M—mandatory requirements for compliance with standards or laws through the implementation of innovations, product innovation—A, innovation—A, the introduction of innovations—M). Therefore, enterprises mostly implement innovations in the scope of frugal innovations. However, this process remains the main critical point with a clearly visible discrepancy between the desire to innovate and their ability to do it effectively [50,58,59]—cluster 1—positive attitude towards innovation development versus cluster 2—conflicting attitudes—innovation barriers). Innovations in this difficult market situation can play a significant role in the development of the company and its competitiveness. Businesses in Slovakia view the introduction of innovations as one of the tools of sustainable development. According to James [13], the introduction of innovations in Slovakia and in other countries is, in fact, a driving force behind the development of sustainability, which aims to lessen the negative effects of the economy on the environment while also fostering economic growth. Since all investigated parameters have a p-value < α (significance level of 99%), we can also accept research question/hypothesis 3 and reject the statistical hypothesis H₀ and accept the hypothesis H₁, i.e., Small and medium-sized enterprises in Slovakia encounter various barriers when introducing innovations as a tool for sustainable development.

The introduction of rather frugal innovations in small and medium-sized enterprises in Slovakia is also confirmed by the results of Harini et al. [60], who point to the existence of a relationship between the performance of companies (from the point of view of marketing, branding, etc.) and innovations. According to European Statistics data [18,37], Slovakia has a low rate of innovation introduction and performs below average in terms of EU standards. The regulatory and political framework for innovation in Slovakia is very fragmented and insufficient to sustain and support an environmentally favorable business environment in Slovakia. According to a study by Jeck and others [12,18,37], regulation and pollution taxes are the most important factors in the introduction of ecological innovations in Slovak companies (M—mandatory requirements for compliance with standards or laws through the implementation of innovations). At the same time, it points to the fact that an equally important factor related to sustainability and innovation is the effort to reduce material and energy costs (A—attractive requirements for companies are cost reduction through innovation).

Companies focus on compliance with national and international standards and laws, not only because they are legally required to do so and have an obligation to do so (compliance with standards or laws through the implementation of innovations—M—mandatory requirements) but also because adopting environmental management strategies is under pressure from customers and cultural shifts that open up new market opportunities [5].

This type of innovation offers the possibility to accomplish sustainability by removing environmental shock and dynamic market pressure without slowing down economic growth [11,16,17,18,19,20,24,26,29] (identified as R—reverse requirements of companies in Slovakia) while also taking into account the effective use of natural resources. However, businesses face obstacles that must be reduced to the maximum extent feasible in order to foster an environment that will enable even small and medium-sized enterprises in Slovakia to grow in an environmentally friendly way. Innovations represent the main force of sustainable development [16,18,19,20,46], which also applies to the terms and conditions of small and medium-sized enterprises in Slovakia. They represent a way of balancing the interest in eliminating negative impacts on the environment and, at the same time, in the economic growth and development of businesses. Harmonization of these parameters (economic and environmental performance of enterprises) represents an improvement of the environment as well as an increase in competitiveness. This is happening through innovations in small and medium-sized enterprises in Slovakia within their possibilities by the implementation of frugal innovations.

The most significant barriers to innovation in small and medium-sized enterprises in Slovakia are the financial ones. Companies in Slovakia aim to recycle significantly and outsource production activities in an effort to reduce energy and material inputs (this indicates that companies prefer to buy finished technologies rather than do their own research and development of advancements) [16,18,34]. According to Hrabynskyi et al. [61], all EU member states face comparable barriers when introducing innovations as a tool for sustainable development, so it is imperative to remove these constraints (barriers) within the context of policies (European policy, international policy, or national policy).

This paper’s main contribution is a perspective on the current situation of innovation as a tool for the sustainable development of companies in Slovakia. The article also highlights the positive and negative aspects of the introduction of innovations within the innovation process of small and medium-sized businesses in Slovakia, leading to the improvement of the economic and environmental pillars of sustainability. Consequently, it is desirable that the identified limitations should be eliminated or transformed into opportunities.

6. Study Limitations and Recommendations for Future Work

Despite our efforts to incorporate all relevant data in the paper, some important documents may have been omitted unintentionally, which was the limitation of the study. The limit of the study is the data used to calculate and specify the sample of respondents for the year 2021, which may not correspond to the current situation in Slovakia, but data for more recent years are not yet available. The survey sample size was only 217 respondents, and her stratification makes it even smaller. Despite this limitation, the presented results can be considered representative with regard to the calculation of the respondent’s sample, its statistical significance derived from the share of small and medium-sized enterprises in Slovakia, as well as based on the analysis of requirements through the Kano model. From a methodological point of view, despite the effort to eliminate the limitations of classical research by using the Kano model, the Kano model also has its limits. As stated by Kwon and Lim. or Medzík et al. [62,63], when determining the quality characteristics, the quality level is determined by the highest frequency value. Therefore, even with the same quality factor, there is a limit to representing the difference between the relatively high-quality-level element and the low-quality-level element numerically. The study deals with limitations related to the application of the results. The stated results are rather general and, therefore, do not take into account various specificities. In order to confirm their subsequent validity, it is necessary to carry out deeper surveys, which are lacking in the given area under the conditions of Slovakia. Moreover, they do not bring concrete solutions to remove the identified obstacles, limiting the effort to introduce innovations to increase sustainability.

Due to the effort to generalize the investigated issue in this article, in the future, it will be possible to conduct research on specific sectors and various specifics of sustainability and compare them. Future research should also focus on the identified barriers to the introduction of innovations as a tool for sustainable development in small and medium-sized enterprises in Slovakia and the potential for their elimination.

7. Conclusions

A key strategy for attaining sustainability is innovation. Numerous environmental issues within the global economy are causing increasing pressure to change patterns of business behavior. Therefore, it is necessary to examine the attitudes of companies in the field of innovations that have a positive impact on sustainable development. We have discovered the following attitudes from the perspective of small and medium-sized businesses in Slovakia:

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companies have a positive attitude toward innovation as an important factor in sustainable development,

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companies focus on frugal innovations characterized by cost reduction, focusing on basic functions, standards, laws, and performance optimization,

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companies perceive a number of barriers when implementing innovations supporting sustainable development.

The results indicated the need to consider the role of political interventions to support the intrinsically motivating elements of the development of innovative activity for the sustainable development of companies. This would eliminate the identified barriers to innovation supporting sustainable development and would also support those areas of innovation that companies are not currently focusing on to a large extent.