Innovation Strategies and Business Networks: A PLS-SEM Analysis in Rural Tourism Entrepreneurship

Abstract

This study examined how entrepreneurs in the tourism sector can develop competitive advantages in a highly competitive environment. The relationship between innovation strategies, business networks, and service innovation was investigated using a PLS-SEM analysis with a sample of 32 tourism enterprises in Ecuador, namely, Cotacachi, Otavalo, and Quiroga. A structured questionnaire was used to evaluate service innovation, strategic renewal, and the development of business networks. The results indicate that internal knowledge sharing, process optimization, and the creation of new services drive creative strategies. Simultaneously, innovation and strategic renewal are positively associated with participation in business networks. In addition, access to external financing was identified as a key factor in enhancing innovation. These findings underscore the importance of designing public policies that promote tourism innovation through comprehensive programs combining access to finance, strengthened business networks, and internal capacity training. This paper offers strategic insights into the competitiveness and sustainability of tourism enterprises in emerging economies.

1. Introduction

In the dynamic and competitive landscape of contemporary tourism, businesses face increasingly complex challenges that require constant adaptation and innovation. The latter has emerged as a key factor in sustainability and business growth in a sector characterized by rapid technological advancements, shifts in consumer habits, and the growing globalization of tourism services. Recent studies emphasize the significance of innovation for organizations in the tourism sector, particularly in complex socioeconomic environments. Innovation is a viable strategy for organizations to adapt and overcome adversities [1]. Research indicates that internal resources, such as human and organizational technological capital, as well as external resources derived from social interactions within the destination, play crucial roles in fostering innovation [2]. Innovations in tourism ventures tend to be incremental rather than radical, focusing on product improvements, new processes, better business practices, and marketing mechanisms [3].

Additionally, research has shown that an intra-entrepreneurial culture has a positive influence on innovation in tourism organizations, particularly in production and management processes [4]. These findings underscore the need for policies and programs that promote innovation and intrapreneurship to improve the competitiveness and sustainability of tourism organizations. Community-based tourism is emerging as an innovative alternative to mass tourism, focusing on sustainable local development and community participation [5,6]. However, research on the intersection of innovation and community-based tourism remains limited, indicating the need for further exploration in this area [7].

This study analyzed the relationship between innovation strategies, entrepreneurial networks, and the performance of tourism ventures. This study aimed to understand how rural tourism entrepreneurs can develop competitive advantages in an increasingly demanding market, considering the relevance of innovation strategies and business networks. In this context, the following research questions arise: (1) What is the importance of process optimization and the design of new services as key actions within strategies aimed at attracting new customers? (2) To what extent does knowledge sharing among employees facilitate the development of the tourism enterprise’s capacity to implement changes in its target market and business strategies? (3) How much effort is put into renewing strategies that impact service innovation in sustainable tourism ventures? (4) What is the relationship between entrepreneurial networks, innovation capacity, strategic renewal, and performance? (5) How does the type of financing used for tourism enterprises influence the implementation of innovative strategies?

These research questions are addressed through the hypotheses posed in the following section. These hypotheses aim to elucidate the internal mechanisms that drive innovation in a sector traditionally perceived as conservative, yet one that now demands radical transformation. This research’s findings can significantly contribute to the existing knowledge, fostering the analysis of the factors that promote innovation in tourism enterprises, especially in the context of rural communities. Although research on these topics is increasing, there is a lack of empirical evidence to confirm effective paths to implementation. New studies are needed to investigate the relationship between process optimization, new service design, and the capacity to implement creative customer attraction strategies.

Furthermore, additional studies are relevant to emphasize the importance of internal knowledge sharing among employees for strategic changes. Moreover, it is pertinent to know how entrepreneurial networks are related to the innovativeness of the business, and the numerous obstacles in accessing external sources of finance are a key challenge of rural tourism entrepreneurship. This research was designed to overcome the limitations of existing studies.

In the rural tourism sector, small businesses, including family-owned businesses and community-based tourism ventures, are crucial in empowering rural residents in developing countries. However, as studies such as [8,9] have pointed out, these businesses often lack the official support they need to thrive. They are typically created using business owners’ financial and personal resources, rather than relying on official budgets, such as bank loans. This underscores the urgent need for official support.

This research was conducted on small enterprises near the Cotacachi Cayapas National Park, one of Ecuador’s most important protected areas. Small tourism ventures have been established at the primary access point in the highland region, especially in the nearest towns of Otavalo, Cotacachi, and Quiroga. However, limited basic infrastructure in these rural areas continues to prevent the consolidation of tourism ventures.

This study confirms the mediating role of organizational learning skills in service innovation and organizational performance. Management is the key driver in this process, responsible for creating a proactive and creative organizational culture that values continuous learning. This culture, influenced by the environment, networks, and ongoing communication, promotes greater proactivity in decision making and encourages innovation among collaborators.

This study contributes to the literature by proposing an explanatory framework linking entrepreneurial networks, strategic renewal, and innovation in rural tourism ventures. Integrating resource-based and network theories offers actionable insights for policymakers and practitioners in underserved regions.

This article begins with the Introduction, followed by the Theoretical Framework and Hypotheses, Materials and Methods, Results, Discussion, and Conclusions. Lastly, it ends with an outline of its implications and paths for future research.

2. Theoretical Framework and Hypotheses

The factors driving innovation in tourism ventures are diverse and complex. The crisis generated by COVID-19, the need for new economic options in rural and urban areas, and changes in demand behavior have acted as catalysts for innovation [10,11,12]. These drivers are facilitated by the rapid development of information and communication technologies [13,14], which has given rise to digital economies [15], characterized by solutions based on chatbots, personalized multi-stakeholder systems, social networks, digital platforms, and data-processing technologies, mainly using artificial intelligence and machine learning [16,17].

Innovations should be applied within the framework of a strategic process [18] that, starting with planning, should lead to an adequate implementation. However, there are fewer studies related to strategy implementation than planning [19,20], which could mean that the results do not match what was initially expected because, for example, although innovations during the COVID-19 pandemic helped businesses survive and reinvent themselves, they have not been sufficient for long-term sustainability [21]. This, in turn, is because greater resilience, well-designed and practical labor market policies, and social protection systems that include investments in education and skills training are required. In line with the need to identify innovation indicators, the concept of absorptive capacity [22] refers to the ease of acquiring, assimilating, transforming, and exploiting external knowledge to take advantage of an innovation.

Similarly, leadership and organizational culture play crucial roles in fostering innovation in organizations. The “culture for open innovation dynamics” concept emphasizes the interplay between start-up entrepreneurship, intrapreneurship, and organizational entrepreneurship, which can lead to different aspects of innovation culture [23]. Furthermore, ambidextrous leadership in business partnerships can lead to better innovation outcomes, allowing organizations to pursue new opportunities while maintaining daily operations [24], hence highlighting the importance of leadership styles and organizational culture in facilitating innovation in various sectors.

2.1. Innovation Strategies and Business Networks

Firms across all industries are developing innovation as a vital strategy to guarantee their success in the global and competitive markets. Schumpeter’s theory of innovation (1934) points out that entrepreneurship and innovation are critical drivers of economic development. Moreover, the Oslo Manual, OECD, and Eurostat [25] emphasize that product, process, marketing, and organizational innovations are practical tools to enhance competitiveness.

Scholars have conducted extensive research on the factors influencing the innovation capability of organizations [26,27,28,29,30]. Therefore, innovation capability is vital to entrepreneurs aiming to compete with their larger competitors. Furthermore, innovation strategies are essential in fostering a competitive advantage and sustainability in rural tourism entrepreneurship. Theories such as the dynamic capabilities theory [31] provide frameworks for understanding how organizations can integrate internal and external competencies to address changing environments. This approach is vital for rural tourism entrepreneurship, which has to overcome a competitive market to create a unique tourism experience.

The role of business networks is explored through the lens of network theory [32], pointing out the vital role of social capital and relational ties in facilitating information flow, trust, and collaboration. In rural tourism entrepreneurship, where enterprises often work with limited resources, business networks serve as a conduit for knowledge exchange, gaining market insights, and contributing to organizational success.

These theories guide this study, and some key factor associations, namely, process optimization, sustainability in business processes, strategy renewal, and financing sources, are developed through this research.

2.2. Creative Strategies and Attracting New Customers

The tourism industry was significantly impacted by the COVID-19 pandemic [33,34,35], generating unprecedented challenges for all players in the sector [36,37,38]. This situation has evidenced the critical need to study and develop innovation in the tourism sector, considering its nature as a complex process that requires a systemic approach [39,40]. This approach should integrate the knowledge and experiences of the various actors in the tourism environment, encompassing aspects such as organizational innovation, product and process innovation, innovation strategies, technological innovation, and knowledge management [41,42,43,44].

Innovation aims to seek unique strategies to improve a company’s market performance, i.e., to make it more competitive and improve its results [45,46,47]. Several studies have demonstrated a direct relationship between innovation and competitiveness [48], which is enhanced when innovation is integrated into organizational structures [48].

Organizational innovation is a fundamental skill that operates through reciprocity and complementarity with technological, product, and process innovations [49]. The results obtained through this type of innovation positively influence companies and tourism destinations, positively reinforcing innovative capacity [44]. In the specific case of tourism ventures, structural capital components, such as knowledge management and organizational culture, significantly influence innovativeness and performance [50]. Some researchers [13] emphasize that innovation is the successful incorporation of creative ideas, which translates into an increased ability to design and execute innovative strategies to attract new customers. This leads us to the first hypothesis:

Hypothesis 1 (H1).

There is a statistically significant association between process optimization, new service design, and the implementation of creative customer attraction strategies in rural tourism ventures.

2.3. Sustainability in Business Process: Learning and Knowledge Sharing

Sustainability in business process management is a key factor associated with business success [51]. Employees are considered one of the most essential factors in achieving sustainability [52]. The quality of the organization’s human potential plays a relevant role, as does its prosperity and sustainable development [53]. This perspective emphasizes the interconnectedness of managing processes (operations and systems), the people who execute them, and the organizational culture that underpins them, highlighting the need for a holistic approach to sustainability.

Organizations with more flexible and decentralized structures can implement innovations and respond to market changes. Organizations with more agile and empowered structures demonstrate a remarkable ability to implement new ideas, respond to market demands, and capitalize on emerging opportunities. Innovation, trust, and performance are key human factors in knowledge sharing and transfer in organizations, thus facilitating strategic adaptation [54].

Continuous training, encouraging a culture of knowledge sharing, and implementing strategic change are essential to foster organizational agility. By investing in the development of their employees and fostering a collaborative work environment, tourism ventures can accelerate the adoption of new technologies and management practices, thereby enhancing their ability to compete in an increasingly dynamic market. Organizations can develop innovative solutions and enhance operational efficiency by leveraging the skills and knowledge of their professionals and managers [55]. In this regard, the capacity for learning and knowledge sharing among organizational members becomes a strategic asset that enables tourism ventures to determine their target market and establish business strategies to adapt to disruptive changes and anticipate market trends. Hence, we arrive at the second hypothesis:

Hypothesis 2 (H2).

Employee knowledge sharing is associated with strategic adaptability in target market changes and business strategy modifications in rural tourism ventures.

2.4. Strategy Renewal

An organization’s ability to renew its strategies proactively and adaptively has emerged as a determining factor in ensuring its competitiveness in an increasingly dynamic and complex business environment. Numerous studies, including [56], corroborate this assertion by highlighting the importance of aligning technology with business strategy as a fundamental pillar of strategic renewal. This alignment boosts operational efficiency, facilitates adaptation to disruptive market changes, and contributes to an organization’s long-term sustainability. Furthermore, when considering the sustainability of businesses from an internal perspective, the need to create a competitive edge is well established [57]. The authors of [58] emphasize the crucial role of organizational and managerial innovation in business renewal, especially in the service sector. Organizations can generate sustainable competitive advantages, improve their performance, and respond effectively to customer demands [59]. In other words, innovation encompasses the creation of new products or services as well as the transformation of internal processes and the adoption of new strategic ways of working.

Additionally, innovation is a vital element of business growth strategies that aim to increase the existing market share and enter new markets [46,47,60]. Thus, innovation enables the implementation of strategies related to more productive transformation processes and customers’ positive perception of the quality of their products and services. Innovation is a crucial corporate strategy for organizations that can lead to a sustainable competitive advantage [61,62,63].

Moreover, marketing strategies in tourism ventures have significantly evolved, incorporating digital and experiential elements. The effective segmentation of target audiences and the development of differentiated value propositions are fundamental to the competitiveness of tourism ventures. Recent research highlights the significant impact of aligning marketing strategies with innovation capabilities on organizational performance. Strategic agility and innovativeness have a positive influence on organizational performance [64]; ambidextrous marketing capabilities, encompassing both exploration and exploitation, enhance innovation performance through market-based innovation [65]. Therefore, the third hypothesis suggests the following:

Hypothesis 3 (H3).

A statistically significant association exists between strategic renewal efforts and service innovation in sustainable tourism ventures.

2.5. Business Networks

Innovation has been recognized as a key factor for the competitiveness and sustainability of organizations in the tourism sector, particularly in emerging economies, where financial and structural challenges demand creative and adaptive approaches [42,66]. From a systemic perspective, innovation in tourism integrates firms’ internal knowledge with the leveraging of external business networks, thus enabling both incremental and disruptive solutions [40].

Knowledge management, stakeholder participation, and network collaboration emerge as critical drivers of sustainable innovations in tourism [67]. This approach requires transforming products, services, and business models to adapt to a dynamic environment where technological development and sustainability are key [68]. Organizations play a crucial role in creating flexible networks and shared identities, which enable the development of collaborative innovations through cooperative behavior, co-creation, collaborative networks, and knowledge transfer [69,70,71,72]. This collaborative perspective can be strengthened by virtual reality tourism and other technological advances that facilitate new interactions and value creation [73].

In the service sector, innovation and resilience serve as key dynamic skills that address changing business landscapes, where digital tools and external networks play important roles in driving service innovation [74]. This leads us to the fourth and fifth hypotheses:

Hypothesis 4 (H4).

Entrepreneurial network diversity and strength are associated with innovation capacity in rural tourism ventures.

Hypothesis 5 (H5).

Strategic renewal implementation is associated with entrepreneurial network density and diversity.

2.6. Financing

One of the main challenges innovative organizations face is their struggle to attract investment due to the increased risks associated with lending in this sector [75]. Organizations face numerous obstacles in accessing external sources of finance, particularly when compared with larger corporations. These include the inability of small innovative enterprises to provide a 100% guarantee on their obligations independently, the lack of a well-established system for guaranteeing and insuring their investment activities, a lack of economic training among their staff, leading to weaker investment projects, and the prohibitively high cost of consulting services for business operations and investment project preparation, which are often beyond the reach of small enterprises [75].

Bank loans are organizations’ primary source of external financing [76]. However, banks’ reluctance to lend to small businesses is often due to the complexity of considering many innovation and investment projects at a high cost of development operations. This complexity underscores the challenges of organizational financing. Banks also tend to avoid lending to newly organized small tourist enterprises, which require collateral with a guarantee from a third party that can vouch for them with their property [75].

Conversely, organizations typically request modest loan amounts, resulting in a significant disparity between the costs associated with due diligence and the profits banks can generate from the loan. This imbalance, coupled with the volatility of organizations’ profits and heightened bankruptcy risk, underscores the financial challenges faced by these enterprises [77,78].

Moreover, short-term debt is more costly for borrowers, as it may expose them to high rollover risk and covenant violations, thereby exacerbating credit and liquidity shocks that the business may experience [79]. Thus, firms with a large proportion of short-term debt in their debt maturity structure represent a greater refinancing risk, which may, in turn, hurt their future investments and growth prospects [80]. This leads us to the sixth and seventh hypotheses:

Hypothesis 6 (H6).

External financing is associated with higher innovation strategy implementation capacity than self-financing or family loans in rural tourism ventures.

Hypothesis 7 (H7).

Ventures with external financing exhibit higher innovation capacity than those relying on self-funding or sales revenues, mediated by access to non-redundant resources.

This study adopted an integrated approach that connects organizational innovation, strategic renewal, and network collaboration, considering how these dimensions influence the performance of tourism ventures. Figure 1 illustrates the theoretical relationships between the key constructs.

The solid arrows represent direct effects (H1–H5 and H7). The dashed arrows indicate the moderating effects of financing sources on innovation-related paths (H6). Organizational performance was excluded from this study as it had not been empirically tested. While the hypotheses proposed (H1–H7) are grounded in established theoretical frameworks—such as absorptive capacity, network theory, and dynamic capabilities—it is critical to emphasize that our approach for methodological design examines predictive associations, not causal relationships.

3. Materials and Methods

3.1. Sample and Data Collection

Rural tourism in Ecuador has faced difficulties since its inception, arising from the need to find alternative mechanisms for the subsistence and preservation of territories that were being devastated by extractive activities [81]. According to [82], external factors, such as a lack of investment in infrastructure and limited knowledge about the area, are also contributing factors. However, the primary obstacle is the fear of failure, which prevents ventures from gaining a foothold in a globally competitive market. Meanwhile, the high-quality standards imposed by the Ministry of Tourism of Ecuador (MINTUR) make it impossible for all existing ventures to qualify as community tourism centers (CTCs), alongside the limited basic infrastructure in rural areas of Ecuador, which continues to prevent tourism ventures from consolidating [81]. This study employed PLS-SEM analysis, focusing on the cantons of Cotacachi, Otavalo, and Quiroga in Ecuador’s Imbabura province. These regions were purposefully selected due to their proximity to the Cotacachi-Cayapas National Park, a biodiversity hotspot, where rural tourism serves as a critical economic lifeline for isolated communities [5,10]. Given the limited population of tourism enterprises in these rural areas and their prior participation in foundational studies, a convenience sampling strategy was implemented.

The final sample comprised 32 active tourism enterprises (representing 86% of eligible businesses in the target communities. This approach ensured geographical accessibility in remote highland terrain, methodological continuity with longitudinal research on Ecuadorian tourism resilience, and contextual representativeness of community-based tourism models [8] (Jaafar et al., 2011).

Despite its non-probabilistic nature, the sample captured heterogeneity across business types, comprising family-run hostels (59%), artisan cooperatives (25%), and eco-tour operators (16%), making it representative of this niche context. Data collection took place from June to August 2023 via face-to-face surveys conducted in Spanish, with a mean completion time of 42 min (SD = 11.3).

The research instrument consisted of a structured questionnaire of 26 questions (Appendix A). Participants were asked to rate each item on a five-point Likert scale from 1 to 5 and grouped into six main dimensions: demographic data of those involved in the venture, characteristics of the origin and financing, promotion strategies, service innovation, strategic renewal, and business networks.

Tourism and research methodology experts exhaustively reviewed the instrument to establish its validity. Additionally, a pilot test was conducted to make necessary adjustments to the questionnaire. To evaluate the internal consistency, we calculated McDonald’s omega (ω) for each construct, replacing Cronbach’s alpha due to its robustness for ordinal Likert-scale data [83]. Additionally, quality control was performed using a two-step procedure: first, common method bias (CMB) was assessed using Harman’s single-factor test [84] by loading all measurement items into an unrotated EFA; and second, assumption verification was conducted by testing normality (Shapiro–Wilk tests were used on latent variable scores), homoscedasticity (Breusch–Pagan tests were employed for regression residuals), and outliers (the Mahalanobis distance was used (p < 0.001)).

All statistical analyses were performed using RStudio (version 2024.09.0+375), the corresponding statistical packages, and JASP (version 0.19.1), ensuring rigor and precision in data processing.

3.2. Statistical Methodology

Given the cross-sectional design and exploratory nature of this study, partial least squares structural equation modeling (PLS-SEM) was selected due to its suitability for exploratory research with small sample sizes (n = 32) and non-normal data distributions. PLS-SEM is robust with small samples when prioritizing exploring complex relationships over causal inference [85]. This approach prioritizes predictive relevance (Q²) and effect sizes (f²) over strict model fit, aligning with the study’s focus on identifying practical associations in rural tourism entrepreneurship. This method is preferred over covariance-based SEM for the following: modeling complex relationships with small samples (N = 32), avoiding distributional assumptions, and testing associations rather than causal effects [85].

The analysis followed a two-stage approach. The first approach was a primary analysis, PLS-SEM, which was preferred since it provides merit for reliability (composite reliability > 0.7) and validity (AVE > 0.5; HTMT ratios < 0.85). Furthermore, the structural model evaluated path coefficients for hypotheses H1–H5 using bootstrapping (1000 subsamples). The model evaluation criteria were global model fit (SRMR < 0.08) [86]; explanatory power (R² values: 0.25 = weak, 0.50 = moderate, 0.75 = substantial); effect sizes (Cohen’s f²: 0.02 = small, 0.15 = medium, 0.35 = large); and predictive relevance (Q² > 0, blindfolding procedure).

The second approach was a group comparison PLS-MGA. This approach maintained latent variable structure, reduced the type I error risk with small subgroups, and directly compared path coefficients across groups. Moreover, groups were defined by financing type as follows: G1—own savings (n = 14); G2—external financing (n = 9); G3—family/friends loans (n = 6); and G4—sales revenues (n = 3). Therefore, PLS-MGA tested H6: differences in path coefficients (e.g., renewal → innovation) across financing groups; and H7: stronger innovation-related paths in G2 (external financing) vs. G1/G4.

Following our hypotheses, PLS-SEM estimated the strength and significance of associations between constructs without assuming causal directionality [87]; causal inferences would require longitudinal or experimental data. The structural model (Figure 1) tested direct effects (H1–H5 and H7) and moderation effects (H6) using interaction terms in PLS-SEM. This finding was consistent with this study’s correlational design.

4. Results

Partial least squares structural equation modeling (PLS-SEM) provides valuable insights into the factors analyzed. In this study, we performed methodological quality control. Therefore, Harman’s single-factor test showed the first factor explained 38.2% of the total variance (<50% threshold), indicating no severe CMB. McDonald’s omega (ω) values were innovation: ω = 0.92 [95% CI: 0.88–0.95]; renewal: ω = 0.89 [0.84–0.92]; and networks: ω = 0.85 [0.79–0.90]. Thus, assumption verification was proactively addressed in this study as follows: normality, assessed using non-significant Shapiro–Wilk tests (p > 0.05) for all latent variables; homoscedasticity, evaluated with Breusch–Pagan tests for non-significant variables (χ² = 2.11–4.07; p > 0.05); and outliers, with no cases exceeding the Mahalanobis D² critical value (χ² = 16.27; df = 3; p < 0.001).

Furthermore, Spearman’s correlation analysis revealed significant relationships between innovations and strategic management items.

Table 1. Spearman correlations.

Item	P5	P6	P9	P11	P12	P15
P5	—
P6	0.903 ***	—
P9	0.641 ***	0.641 ***	—
P11	0.263	0.266	0.525 **	—
P12	0.481 **	0.477 **	0.559 ***	0.695 ***	—
P15	0.253	0.181	0.217	0.585 ***	0.647 ***	—

** p < 0.01, and *** p < 0.001. Source: the authors.

summarizes the most important results.

A strong positive correlation was found between process optimization (P5) and new service design (P6) (ρ = 0.903; p < 0.001), and both variables showed moderate correlations with the implementation of creative customer attraction strategies (P9) (ρ = 0.641; p < 0.001), thus supporting H1. Meanwhile, knowledge sharing among employees (P15) showed significant moderate correlations with both target market change (P11) (ρ = 0.585; p < 0.001) and the modification of business strategies (P12) (ρ = 0.647; p < 0.001), suggesting an essential link between internal knowledge management and the strategic adaptability of the venture, thus supporting H2.

Construct validity and reliability were rigorously assessed. Composite reliability (CR = 0.88–0.93) and average variance extracted (AVE = 0.61–0.79) exceeded thresholds (>0.70 for CR; >0.50 for AVE), confirming convergent validity [87]. Discriminant validity was established via HTMT ratios (0.32–0.74 < 0.85 threshold), ensuring no overlap between latent constructs. The structural model fit was as follows: SRMR = 0.076 (<0.08 threshold); goodness of fit (GoF) = 0.45 (significant effect per [88] Wetzels et al., 2009); R² (innovation) = 0.52 (moderate); R² (networks) = 0.28 (weak); and R² (innovation) = 0.37 (>0, predictive relevance). The structural model results (

Table 2. PLS-SEM path coefficients and effect sizes.

Hypothesis	Path	β	p-Value	Cohen’s f2	R2	Support
H3	Renewal → innovation	0.58	<0.001	0.41	0.52	Yes
H4	Networks → innovation	0.41	0.018	0.18	0.52	Yes
H5	Renewal → networks	0.53	0.002	0.39	0.28	Yes

Source: the authors.

) supported H3–H5.

PLS-MGA revealed significant differences in the renewal→innovation path across financing groups (

Table 3. PLS-MGA results for significant path differences by financing type.

Path	Groups Compared	Β (Group i)	Β (Group j)	Difference (βi–βj)	p-Value
Renewal → innovation	G2 (external) vs. G1 (own savings)	0.79	0.45	+0.34	0.008 **
Renewal → innovation	G2 (external) vs. G4 (sales revenues)	0.79	0.32	+0.47	0.001 ***

** p < 0.01, and *** p < 0.001. Source: the authors.

). As a result of the analyses, ventures with external financing (G2) showed substantially stronger renewal–innovation relationships than the following: own-savings-funded ventures (G1): Δβ = +0.34 and p = 0.008; sales-revenue-funded ventures (G4): Δβ = +0.47 and p = 0.001.

No significant differences were found for other paths (networks → innovation, and renewal → networks). These results support H6 (the financing type influences the innovation capacity) and H7 (external financing enhances innovation).

5. Discussion

The methodological controls reinforce the robustness of the findings: there was no severe common method bias (Harman’s test: 38.2% < 50%), there was excellent composite reliability (McDonald’s ω > 0.85), and the statistical assumptions were met (i.e., normality, homoscedasticity, and no outliers).

The strong correlation between service innovation and creative customer attraction strategies confirmed H1. This aligns with [89], who identified that, in the tourism sector, an innovative mindset drives business success through innovativeness.

The significant correlation between knowledge sharing and strategic changes (H2) aligns with the findings of [54], who discovered that innovativeness, trust, and performance are key human factors influencing knowledge sharing and knowledge transfer in SMEs, thereby facilitating strategic adaptation. Similar results were reported by [55], who highlighted that internal learning capacity, based on the skills of professionals and managers, encourages innovation and has a positive influence on organizational performance.

The PLS-SEM model demonstrated an excellent fit (SRMR = 0.076; GoF = 0.45) and substantial explanatory power for innovation (R² = 0.52). The large effect sizes for renewal → innovation (f² = 0.41) and renewal → networks (f² = 0.39) highlight the central role of strategic renewal as a factor strongly associated with innovation and a network facilitator. The PLS-SEM results confirmed strategic renewal’s positive effect on innovation (β = 0.58; p < 0.001). This association suggests that ventures prioritizing the renewal of their business strategies are more likely to implement innovations in their services, supporting H3. These findings are consistent with [56], who concluded that technology and business strategies must be aligned with strategic renewal to achieve sustainability. The findings also align with [58], who emphasized the fundamental role of organizational and managerial innovation in fostering business renewal, especially in the service sector, so that sustainable growth is achieved by effectively implementing these innovations.

Similarly, business networks significantly drove innovation (β = 0.41; p = 0.018), allowing us to corroborate H4. This relationship suggests that the diversity and strength of entrepreneurial networks partially contribute to the development of innovative capacity. Nevertheless, although significant, it may not be a determining factor. These findings align with the conclusions of [90], who stated that, in tourism, innovation requires networks and cooperation systems because firms are mutually dependent. This finding also aligns with the results of [91], who concluded that for firms in the tourism sector, adopting innovation principles through external sources of knowledge and expertise can be effectively implemented via strategic partnerships and collaborations.

Our analysis also revealed a positive and significant correlation between the implementation of renewal strategies and the establishment of entrepreneurial networks (β = 0.53; p = 0.002), thus supporting H5. This association indicates that ventures that are more proactive in renewing their strategies tend to develop stronger entrepreneurial networks or vice versa. These results are consistent with the findings of [92], who concluded that in SMEs, dimensions such as coordination, relational skills, and internal communication improve organizational survival via strategic renewal, providing evidence of the importance of networking for an organization to adapt to market changes.

For financing effects, PLS-MGA showed that externally funded ventures exhibited stronger renewal → innovation paths than self-funded peers (Δβ = 0.34–0.47; p < 0.01), supporting H6 and H7. This highlights the catalytic role of external capital in innovation adoption [68]. This aligns with the results of [93], who studied the effects of operations financing strategies on firm innovation and the processes that influence these effects. They discovered that financing limitations are one of the mechanisms that most influence innovation. These findings are consistent with those of [75], who found that a lack of financial resources significantly hinders businesses in the tourism sector. This indicates that access to finance is crucial to fostering innovation capacity and overcoming lending barriers in this industry. These results reinforce the importance of access to diversified sources of financing as a catalyst for innovation in the tourism sector.

The positive association between external financing and innovation levels (H7) echoes findings in emerging-economy SMEs [94]. However, this correlational evidence does not imply that financing causes innovation; third factors, such as managerial capabilities, may jointly influence both variables.

6. Conclusions

This research provides evidence of the interrelationship between innovation, strategic renewal, and business networks in Ecuadorian tourism ventures. First, internal knowledge sharing facilitates the implementation of strategic changes, highlighting the importance of human capital in innovation processes. Additionally, process optimization and the design of new services are strongly correlated, suggesting that innovation in the tourism sector follows an integrated pattern of operational improvements and service development to achieve sustainability. Moreover, the type of financing accessed by the ventures significantly influences their innovation capacity. Ventures with external financing show higher innovation levels than those relying on savings or sales. Ultimately, business networks catalyze the implementation of innovative practices, underscoring the importance of fostering collaborative tourism ecosystems that facilitate the exchange of knowledge and resources.

6.1. Theoretical Implications

Small businesses play a significant role in tourism in developing economies, and their contributions to employment generation and economic growth are essential. Tourism has considerable potential to alleviate poverty in developing countries, particularly in less developed economies.

This study makes a significant contribution to the existing body of literature on entrepreneurship by expanding the theoretical framework related to innovation strategies, business networks, and organizational performance. The theoretical implications of this study extend to the development of national and regional innovation policies. By analyzing the practical insights, entrepreneurs and policymakers can design policies to promote business networks and innovation strategies as key to economic growth.

6.2. Practical Implications

This study offers various practical implications beyond academic publications and provides insights that are particularly valuable for managers, stakeholders, and policymakers, who are integral to the entrepreneurship tourism sector. This study provides crucial insights into the importance of a creative mindset in driving business success through innovation. It emphasizes the need for entrepreneurs to cultivate a growth mindset, which is instrumental in enhancing the performance of their organizations. This study’s findings reaffirm the relevance of these insights to tourism entrepreneurs, underlining the value of their time spent understanding and implementing these strategies. Furthermore, the evidence presented in this study underscores the strategic importance of knowledge in business. For tourism entrepreneurs, this means focusing on organizational learning, customer relations, and strategic renewal to improve operational processes and decision making. Moreover, it highlights the role of employees’ learning culture and entrepreneurial skills in driving innovation, thereby emphasizing the need for ongoing training and coaching. The results demonstrate that entrepreneurial orientation has a strong driving effect on service innovation and organizational performance. Organizational learning capability facilitates innovation, positively influencing organizational performance. This study shows that organizations cannot be isolated in the current globalized context; their performance will depend on the relationships with the networks they are part of. Tourism management will be successful to the extent that managers of organizations establish strategies to strengthen networking, thereby improving their competitiveness and sustainable development.

Entrepreneurs should establish strategies that encourage collaboration between companies, thereby enhancing their innovative capacity. This study reveals that a lack of access to financing hinders innovation and poses a significant challenge for these small businesses. Tourism ventures in developing countries face substantial challenges due to the underdeveloped financial environment, which results in these organizations operating inefficiently and with limited innovation. This does not allow them to compete locally or on a broader scale, particularly with sizeable, consolidated tourism companies. Therefore, entrepreneurs need to be aware of their financing options at both the local and international levels. International financing options, such as grants, loans, or venture capital, can provide the necessary resources for small businesses to invest in innovation and compete effectively on a global scale. Moreover, the state needs to design and implement public policies related to financing opportunities that consider affordable interest rates and extended payment periods. This will encourage organizations to invest in innovation, offer better services, and generate new sources of employment, improving the population’s quality of life and the country’s overall development.

6.3. Limitations and Future Research

Future research could benefit from a longitudinal approach to examine how the relationships between innovation, strategic renewal, and business networks evolve. It would also be valuable to expand this study to other regions of Ecuador to validate the consistency of the findings in different socioeconomic and cultural contexts. The sample size limits generalization, but it is representative of 86% of the tourism businesses in the communities studied, and the results showed consistency (SRMR = 0.076, bootstrapping significant). Likewise, future studies should be conducted in other developing countries in the region to increase the sample size. It is also recommended that the specific mechanisms through which external financing facilitates innovation in the tourism sector be further analyzed. Additionally, it is essential to examine other factors that impact an organization’s ability to secure financial resources, investigate relevant regulations, and assess their impact on the management of tourism ventures. Although we controlled for CMB (Harman’s test <50%) and used robust reliability metrics (McDonald’s ω), we identified significant associations, but not causality, due to the cross-sectional design. While the sample covers 86% of eligible tourism ventures in Cotacachi, Otavalo, and Quiroga, findings should be interpreted cautiously, regional factors such as informal economies and community-based networks may limit transferability to urban or formalized business environments. Future research should prioritize three directions: replicating the model in diverse geographic and cultural contexts to strengthen external validity, systematically adopting longitudinal designs to track causal mechanisms over time, and integrating mixed-method approaches to triangulate findings and enhance robustness. Finally, understanding clients’ perspectives is crucial regarding how they perceive the value proposition they receive versus what they would like to have.