The Comparative Impact of Conventional and Digital Innovations on Driving Corporate Sustainability: The Case of Venture Firms in South Korea

Abstract

While previous studies have focused on either conventional or digital innovations individually, few have empirically compared the relative impact of these two types of innovation on firm sustainability. Furthermore, few earlier studies have applied a dynamic capabilities perspective and a technology acceptance model (TAM) to understand how innovation strategies affect long-term competitiveness, particularly when targeting venture firms. In this vein, the aim of this study is to identify the factors that play an important role in the sustainability of venture firms and, in particular, to demonstrate which factor has a more positive effect between conventional innovation and digital innovation, which has recently been considered to be crucial. In this study, ‘corporate sustainability’ refers to the ability of venture firms to secure long-term growth potential and operational and resource efficiency, and the ability to maintain a continuous competitive advantage, even in a rapidly changing market environment. This is especially related to the ability of firms to adapt to change, maintain performance, and create new opportunities through innovation using digital technology. Based on the secondary data jointly surveyed by the ‘Korean Ministry of Small- and Medium-sized Enterprises and Startups’ and the ‘Korea Venture Business Association (KOVA)’, a regression analysis of 3000 data collected in 2022 was conducted. According to the result, both conventional and digital innovations are vital factors, but we found that digital-business-model innovation had a stronger impact for venture firm sustainability. This result provides valuable implications for improving the competitiveness and maintaining the sustainability of venture firms.

1. Introduction

With the advent of the Industry 4.0 era, firms have been adopting innovative strategies to increase sustainability. In particular, venture firms are trying to strengthen their competitiveness through digital-business-model innovation while maintaining their existing technology level. In this environment, research on corporate sustainability has important academic and practical significance, and suggests a strategic direction for a venture firm’s long-term success. The ‘venture firms’ included in this study refer to firms certified by the Ministry of Small- and Medium-Sized Enterprises (SMEs) and Startups and the Korea Venture Business Association (KOVA) in accordance with the ‘Special Measures Act on the Promotion of Venture Businesses’. In addition, they comprise new enterprises or SMEs with technological prowess, innovation, and growth potential, and unlike general SMEs, they pursue high risk and high returns, and operate in a dynamic market environment.

Existing studies have dealt with the impact of conventional corporate capabilities and technology levels on corporate sustainability [1,2]. In addition, previous studies have generally demonstrated the positive effects of digital innovation on corporate performance and sustainability [3,4]. Specifically, it is emphasized that digital-business-model innovation functions as a major factor in promoting corporate sustainability in the era of Industry 4.0 [5]. For reference, in this study, corporate sustainability primarily refers to long-term economic sustainability, which includes factors such as growth potential, operational efficiency, and resilience. We focus on these economic aspects, particularly in the context of ventures. However, we acknowledge that digital innovation can indirectly contribute to environmental sustainability by enabling resource-efficient processes and reducing operational waste.

Meanwhile, existing studies tend to deal with conventional, e.g., in [6], and digital innovations, e.g., in [7,8], individually, and a comprehensive analysis of the relative impact of both types of innovation on corporate sustainability is lacking. This undermines an integrated understanding of how firms can improve sustainability through two-way innovation strategies. Moreover, to our best knowledge, there are no studies that have attempted to apply this empirical attempt to venture firms. Thus, this paper aims to compare and analyze the impact of conventional and digital innovations on venture firms’ corporate sustainability to fill this gap. To better understand how firms pursue innovation under the challenges of Industry 4.0, this study employs the dynamic capability theory as an overarching theoretical lens. This theory emphasizes the ability of firms to sense opportunities, seize them, and reconfigure resources, and is particularly suitable for analyzing how venture firms achieve sustainability through conventional and digital innovation. Based on this theoretical perspective, this study examines not only whether each type of innovation is effective, but also why and how it contributes to long-term competitiveness.

To reiterate, the purpose of this study is to compare and analyze the impact of conventional and digital innovations on corporate sustainability. Through this, we intend to provide an empirical basis for venture firms to select innovation strategies suitable for the Industry 4.0 era. Specific research questions include the following: First, how do conventional corporate capabilities and technologies affect corporate sustainability? Second, does digital-business-model innovation affect corporate sustainability? Third, what is the comparative impact of conventional and digital innovations?

This study can make the following academic and practical contributions by analyzing the comparative impact of conventional and digital innovations: First, we will extend the theoretical framework by uncovering the comprehensive impact of the two types of innovation not simultaneously addressed in previous studies [9,10]. Second, we will provide practical guidance on which innovation strategies venture firms should choose to improve sustainability. This will enable venture firms to develop more efficient and sustainable innovation strategies.

2. Theories and the Literature Review

2.1. Dynamic Capability Theory and Technology Acceptance Models

Dynamic capability theory is a theory that describes the capabilities a firm needs to maintain a sustainable competitive advantage in a rapidly changing environment. According to the theory, firms must continuously reorganize, integrate, and re-position existing resources and capabilities to adapt to new opportunities and respond to changes. Dynamic capabilities can be divided into three main components: sensing capability, seizing capability, and transforming capability. Sensing capability is the ability to recognize environmental changes and capture new opportunities. The ability to seize is the ability to take advantage of this opportunity to coordinate strategic resources and capabilities. In contrast, the ability to transform is the ability to change the organizational structure and processes [11]. These capabilities enable firms to maintain a sustainable competitive advantage and successfully survive and grow in a changing market environment.

Dynamic capability theory can be seen as an extension of a resource-based view. While a resource-based view argues that a firm’s unique resources and capabilities are the source of a competitive advantage, dynamic capability theory highlights how these resources and capabilities can be adapted and reconstructed to changing environments. For instance, if a firm wants to succeed in a fast-changing technological environment, it will not only leverage its existing resources effectively, but also need the ability to quickly introduce new technologies and integrate them within their organizations [10]. As such, dynamic capability theory emphasizes the adaptability and innovation capabilities needed for a firm to maintain a sustainable competitive advantage, and these capabilities allow firms to respond flexibly to market changes and drive long-term growth.

The technology acceptance model (TAM) is a theory that helps users understand how to accept and use new technologies. The model sheds light on two key factors (i.e., the perceived usefulness and perceived ease of use) that determine the user’s acceptance of the technology. Perceived usefulness refers to the degree to which users believe that the technology will improve their performance, whereas perceived ease of use means the degree to which the technology feels easy to use [12]. These two factors affect users’ attitudes and behavioral intentions, which play an important role in actual technology acceptance.

The TAM is widely used in information systems and technological innovation research, and its effectiveness has been demonstrated in various contexts. For example, when a firm introduces a new software system, ‘how users perceive the usefulness and usability of the system’ can act as an important predictor of system success [13]. In addition, the TAM suggests that early user training and support are critical when introducing new technologies. Education and support programs to help users positively recognize the usefulness and ease of use of technology promote technology acceptance, which can eventually contribute to improving organizational performance.

2.2. Conventional Innovation

Conventional innovation has played a key role in strengthening corporate competitiveness and boosting sustainability for a long time. Conventional innovation is primarily through improvements to existing products and processes, and this is an important factor for firms to maintain and strengthen their position in the market. This section examines the key theoretical backgrounds, and the impact of conventional innovation on corporate performance.

Conventional innovation is primarily an incremental innovation based on the skills and capabilities that a firm already has [14]. Conventional innovation aims to improve product performance or increase production efficiency. For instance, such activities include improving existing manufacturing processes to augment productivity or reform the quality of existing products.

Conventional innovations have been studied in various theoretical frameworks. In particular, the resource-based view [10] emphasizes the importance of conventional innovation in that the resources and capabilities that a firm possesses provide a competitive advantage. According to the resource-based view, firms can leverage their unique resources and capabilities to gain a sustainable competitive advantage, and conventional innovation is understood to be the process of optimizing these resources and capabilities.

Conventional innovation has a positive impact on corporate performance. This is mainly attributed to increased productivity, reduced costs, and improved product quality. Several studies report that conventional innovation plays a crucial role in enhancing a firm’s financial performance and market performance [12,15]. For example, the authors in [12] argue that a firm’s resource recombination improves market performance through conventional innovation.

To sum up, conventional innovation plays a central role in strengthening corporate competitiveness and increasing sustainability. The significance of conventional innovation can be understood through theoretical frameworks such as the resource-based view, and such an innovation has a positive impact on corporate performance. Continuous research on conventional innovation will present the strategic direction necessary for firms to secure a sustainable competitive advantage in a changing market environment. Conventional innovation has traditionally been associated with performance improvement or efficiency enhancement, but studies [2] have emphasized that it also plays an important role in improving long-term sustainability. By improving production efficiency, product quality, and cost efficiency, firms can strengthen their market position and gradually adapt to environmental changes, which are all key elements of sustainable growth [2,11]. In particular, firms that continuously improve their internal capabilities through traditional innovation can better respond to external shocks, maintain competitiveness, and increase their long-term survival potential [12].

2.3. Digital Innovation

Digital innovation, along with the development of information and communication technology (ICT), is emerging as a vital factor in firms’ innovation strategies. Digital innovation transforms existing business models, creates new market opportunities, and contributes to reinforcing the competitiveness of firms. Similarly to the previous section, this section also examines the definition of digital innovation, its key theoretical background, and its impact on corporate performance.

Digital innovation refers to the process of transforming existing products, services, or business models using digital technology. This aims to create new value and enables firms to secure a competitive advantage in the market through digital technology [7]. For instance, this includes innovations using big data analysis, artificial intelligence, and cloud computing.

Digital innovation can find a theoretical basis mainly in the dynamic capability theory [16] and the TAM [17]. According to the dynamic capability theory, firms must continually reallocate and innovate resources to adapt to changing environments and take advantage of new opportunities. Digital innovation serves as a primary means of strengthening these dynamic capabilities. In addition, the TAM explains how easily users can accept and utilize new technologies, and it emphasizes that technology acceptance acts as a determinant in the successful introduction of digital innovation.

Digital innovation has a number of positive effects on the performance of a firm. This is primarily driven by increased operational efficiency, increased customer satisfaction, and the creation of new business opportunities [18,19]. Ref. [20] points out that digital business strategies function as a vehicle to boost corporate performance. Moreover, ref. [19] documents that digital innovation contributes to consolidating the organization’s competitiveness.

Digital innovation is not simply the use of digital tools in traditional innovation processes. Digital innovation is an independent type of innovation that fundamentally changes business models and organizational capabilities through digital technologies [18]. Furthermore, digital innovation plays a key role in promoting corporate sustainability by improving resource efficiency, ensuring real-time responsiveness, and establishing more flexible and environmentally friendly business processes [21].

In conclusion, digital innovation is a decisive factor in maintaining and strengthening the competitiveness of modern companies. The importance of digital innovation can be understood through theoretical frameworks such as the dynamic capability theory and technology acceptance models, and digital innovation has a positive impact on corporate performance. Empirical research on digital innovation will show firms a way to achieve a sustainable competitive advantage in the digital age.

3. Hypotheses

3.1. Conventional Corporate Capabilities

Firms gain a competitive advantage through their unique resources and capabilities, which drive long-term growth. The resource-based view [10] insists that a firm’s unique resources and capabilities offer a competitive advantage. This plays a pivotal role in helping businesses achieve sustainable performance in the marketplace. Conventional corporate capabilities consist of various factors such as human resources, organizational culture, and production capacity, and these factors have a considerable effect on a firm’s long-term sustainability [20]. Human resources are the skilled personnel and leadership capabilities, which have a significant impact on the innovation and sustainability of a firm [22]. Organizational culture strengthens sustainability by increasing cooperation and efficiency within the enterprise [23]. A high production capacity allows firms to respond quickly to market demand and secure a competitive advantage through efficient resource allocation [24].

The positive influence of conventional corporate capabilities on corporate sustainability has been shown by several studies. For instance, ref. [12] argues that a firm’s resource recombination functions as a catalyst for sustainability. This study exhibits that market performance can be improved when companies effectively recombine resources that they possess. Ref. [15] reports that the relationships between corporate capabilities and market performance and financial performance are significantly positive. In particular, this study empirically demonstrated that conventional corporate capabilities have a key effect on corporate innovation and financial performance. These studies confirm that conventional corporate capabilities lead to corporate sustainability. Thus, these explanations can also be applied to venture firms.

Hypothesis 1.

There is a positive relationship between venture firms’ conventional capabilities and corporate sustainability.

3.2. Conventional Level of Technology

Technology levels are decisive factors in helping firms gain a competitive edge in the market. Technological advantage strengthens a firm’s sustainability by enhancing product quality, increasing productivity, and reducing costs [25]. Moreover, the level of technology is also closely related to a firm’s ability to innovate. The conventional technology level consists of product technology, process technology, and technical capabilities. Product technology is a technology that improves product performance and quality, and is a useful tool for securing a competitive advantage in the market [26]. Process technology is a technology that increases the efficiency of the production process, contributing to cost reduction and productivity improvement [27]. Technical competence is a firm’s technical competence, which has a significant influence on innovation and sustainability [28].

The positive effect of conventional technology levels on corporate sustainability has been documented by empirical studies. For example, ref. [29] demonstrated the impact of innovation in product architecture on corporate performance, and argued that the technology level was the key to the firm’s sustainability. In addition, ref. [29] proved empirically the close relationship between them, not just the argument. Likewise, ref. [30] points out that strengthening a firm’s competitiveness is impossible without technological innovation. This study also empirically discovered the strong impact of technical capabilities on corporate sustainability. A series of these papers imply that conventional technology levels can have a considerable effect on venture firms’ sustainability. Therefore, hypothesis 2 is as follows:

Hypothesis 2.

There is a positive relationship between venture firms’ conventional levels of technology and corporate sustainability.

3.3. Core Product’s Relevance to Industry 4.0

Industry 4.0 seeks to innovate both the manufacturing and the service industries through the convergence of digital technologies. It aims to automate processes and maximize efficiency by utilizing various digital technologies such as the IoT, big data, and AI [31]. Ensuring that core products are compatible with these digital technologies is essential to augmenting corporate competitiveness and enhancing sustainability. The Industry 4.0 suitability of core products consists of digital integration, automation, and data utilization. Digital integration refers to the ability of a product to be monitored and controlled in real time through the IoT and big data [32]. Automation means the degree to which the production process can be automated [33], whereas data utilization includes the ability to effectively utilize data obtained from the use of the product to improve its (i.e., the product’s) performance [34].

There have been several attempts to find out the impact of the Industry 4.0 suitability of core products on corporate sustainability. Through the attempt, ref. [35] indicated that Industry 4.0 technology improves corporate productivity and promotes sustainable growth. Ref. [36] also reported that Industry 4.0 suitability can be a conduit for strengthening a firm’s competitiveness. In a similar vein, ref. [35] pointed out that Industry 4.0 technology greatly escalates the operational efficiency of firms and provides a sustainable competitive advantage. Ref. [31] stated that Industry 4.0 technology is the key to enhancing corporate sustainability.

In particular, rather than focusing solely on product innovation, ref. [16] emphasizes the importance of integrating Industry 4.0 technologies into the firm’s broader capabilities. This includes not only the development of smart products but also the transformation of internal processes, data-driven decision-making, and digitally enabled value creation. Such capability-based integration is more likely to yield a sustainable competitive advantage. Based on the explanations given by these previous studies, hypothesis 3 is as follows:

Hypothesis 3.

There is a positive relationship between the integration of Industry 4.0 technologies into a firm’s core capabilities and its long-term sustainability.

3.4. Digital-Business-Model Innovation

Digital-business-model innovation refers to the process of transforming existing business models through digital technology to create new value [18]. This is carried out by leveraging cutting-edge technologies such as big data analysis, artificial intelligence, and cloud computing [37]. Digital innovation increases operational efficiency, provides customized services, and creates new business opportunities. These innovations allow firms to manage resources more efficiently and respond quickly to the rapidly changing market environment [38]. In particular, digital-business-model innovation serves as a crucial vehicle for firms to enhance their sustainability [39]. This is essential for businesses to maintain long-term growth and fulfill their environmental and social responsibilities [40].

This is supported by several empirical studies showing that digital-business-model innovation has a positive influence on corporate sustainability. Ref. [25] has stated that digital business strategies are a critical component of promoting corporate performance. This study highlights that the adoption of digital technologies increases the operational efficiency of enterprises and leads to sustainable results through cost reduction and productivity improvement. In addition, ref. [19] documented that digital innovation contributes to strengthening the organization’s competitiveness. The authors explain that digital technology optimizes a firm’s internal and external processes and improves the customer experience, and functions as a short-cut to arriving at a strong competitive advantage in the market. Ref. [20] has exhibited that the introduction of human capital and digital technology can significantly improve a firm’s financial performance. This study demonstrated that digital-business-model innovation is correlated with a firm’s financial health, market performance, and long-term growth potential. These various studies confirm that digital-business-model innovation has a positive impact on a firm’s operational efficiency, customer satisfaction, and financial performance, which increases organizational sustainability. Hence, hypothesis 4 is as follows:

Hypothesis 4.

There is a positive relationship between venture firms’ digital-business-model innovation and corporate sustainability.

All of the hypotheses discussed above are presented in Figure 1.

4. Data and Methods

This study used a venture firm database collected by the ‘Ministry of SMEs and startup’ and the ‘Korea Venture Business Association (KOVA)’ in South Korea (hereinafter referred to as Korea). Quantitatively, Korea’s startup ecosystem has seen significant growth in recent years. The number of newly established SMEs increased from 65,000 in 2011 to 108,874 in 2020. In addition, the number of venture-certified firms exceeded 30,000 in 2020, up from 9798 in 2000. This exponential growth indicates that the startup environment in South Korea is expanding. Korea’s entrepreneurship index rose six places from 15th in 2019 to 9th out of 44 countries in the world ranking. This upward trajectory implies improved entrepreneurial activities and ecosystem performance in the country. Unicorn companies (e.g., Coupang), which are non-listed firms with an enterprise value exceeding KRW 1 trillion, verify the possibility of success in the Korean startup environment. This series of explanations proves that Korea is an appropriate context for achieving the purpose of this study.

Meanwhile, to reiterate, the dataset for this study was obtained from a survey conducted on ventures that were newly established in Korea in December 2022. The dataset, known as the 2022 New Venture Survey Database, includes a total of 3000 Korean ventures. Although the sample of this study includes firms with a relatively long history of establishment, it is important to note that the Korean venture business certification system does not use the age of establishment as a major criterion. In Korea, venture businesses are designated based on the firm’s innovation capacity, level of technological development, and investment performance, and these criteria are operated by the “Special Measures Act on the Promotion of Venture Businesses”. Therefore, the sample of this study includes both startups and mid-sized firms, all of which have received national certification as firms with innovation-oriented growth capacity. With respect to variable measurements, detailed descriptions are given in Appendix A.

5. Empirical Analyses, and Results

First of all, reliability was confirmed by calculating the Cronbach’s alpha value to see the internal consistency of each independent variable’s measurement items. The validity of the measurement items for each independent variable was verified, and the analysis results confirmed that the variables had high reliability (Cronbach’s alpha values ranging from 0.789 to 0.821 demonstrate sufficient internal consistency; please refer to Appendix A).

Table 1. Correlation matrix.

	Mean	S.D	1	2	3	4	5	6	7
Size	25.03	45.97	1
Age	14.13	8.24	0.28 **	1
Industry characteristics	0.25	0.44	0.01	−0.15 **	1
Conventional corporate capabilities	3.42	0.65	0.10 **	0.05 **	−0.06 **	1
Conventional level of technology	2.77	0.67	−0.08 **	−0.09 **	0.03	−0.31 **	1
Core product’s relevance to Industry 4.0	0.09	0.29	0.02	0.00	−0.03	0.03	0.00	1
Digital-business-model innovation	3.25	0.62	0.00	−0.01	0.00	−0.02	0.15 **	0.03	1
Sustainability	3.86	0.66	0.09	0.02	−0.00	−0.00	0.20 **	0.02	0.52 **

Notes: N = 3000; ** p < 0.01.

shows the mean value and standard deviation of each variable and the correlation between the variables. A correlation coefficient of 0.70 is generally referred to as the cutoff point accepted by statisticians [41], and Table 1 clearly displays the minimum presence of multicollinearity. In addition, in order to minutely check the issue, we calculated the variance inflation factor (VIF), and according to the result, we re-confirmed it is negligible (as a result of calculating the VIF values of the control and independent variables, the maximum value was 1.147, and no multicollinearity problem was found. Please see

Table 2. Regression results.

Variables	Model 1	Model 2	Model 3	Model 4	VIF
Size	0.004	−0.002	0.003	−0.004	1.108
Age	0.014	0.003	0.019	0.012	1.117
Industry characteristics	−0.001	0.004	−0.001	0.005	1.028
Conventional corporate capabilities		−0.071 **		−0.031	1.128
Conventional level of technology		0.221 ***		0.130 ***	1.147
Core product’s relevance to Industry 4.0			−0.003	−0.009	1.004
Digital-business-model innovation			0.534 ***	0.507 ***	1.033
Adjusted R2	−0.001	0.042	0.283	0.291
F	0.208	20.354 ***	196.474 ***	130.249 ***

Notes: N = 3000; ** p < 0.01, *** p < 0.001.

). Meanwhile, according to Table 1, the mean value of digital-business-model innovation (M = 3.25, SD = 0.62) is slightly lower than that of conventional corporate capabilities (M = 3.42, SD = 0.65), which suggests that venture firms are still based on conventional capabilities but are also actively introducing digital innovation. Interestingly, the mean value of sustainability (M = 3.86, SD = 0.66) is relatively high, indicating that most firms have a strong perception of their long-term viability. The standard deviation is also low, which means that the responses are relatively consistent across the entire sample.

Multiple regression analysis is used as an analysis method to identify key determinants that affect one dependent variable, and this analysis method was adopted because this is consistent with the purpose of this study, which tries to find factors influencing sustainability. In this vein, we employed OLS (Ordinary Least Squares) regressions. Table 2 exhibits the results of the regression analysis for four independent variables and three control variables. The F-values of most models were found to be statistically significant (In Model 1, only control variables were introduced. Model 2 has variables associated with conventional capabilities and conventional technologies, whereas Model 3 has factors related to digitally relevant components. Model 4 is a full model).

Regarding control variables, this study found that no variable significantly explained the sustainability of a firm. Although previous studies have suggested that variables such as the firm size or establishment year may have a certain influence, the fact that these variables were not statistically significant in this study suggests that increasing the size of a venture firm is likely to augment internal bureaucracy and inefficiency [38], and the sustainability of venture firms is more strongly influenced by strategic innovation factors than by structural characteristics.

The independent variable of conventional corporate capabilities was not significantly correlated with the sustainability of venture firms, which rejects hypothesis 1. In contrast, conventional corporate technology has been statistically identified as an important factor for the sustainability of venture firms, which provides support for hypothesis 2. However, with respect to hypothesis 3, it was not confirmed. As expected, this study documented that the possession of digital-business-model innovation is a guarantee check for driving the sustainability of venture companies, which support hypothesis 4.

6. Discussions

Based on previous studies, potential reasons for the conventional corporate capabilities are because conventional corporate capabilities may not adapt quickly enough in a fast-changing digital economy. There may be limitations in rebalancing existing capabilities to meet new technology and market needs [20]. In addition, conventional capabilities alone make it difficult to secure sustainability in a competition-intensive market. New strategies such as digital innovation are often difficult to achieve with conventional capabilities (e.g., marketing capability) alone [16]. Moreover, there is a limit to relying solely on existing capabilities. Continuous innovation and new capacity development are essential for sustainability [10]. Another possible interpretation is that conventional capabilities are becoming less important in the venture environment, as digital technologies provide more efficient alternatives to conventional strengths [18,38]. Furthermore, ventures may be strategically specializing in specific niche areas, thereby reducing their reliance on generic conventional capabilities [42,43]. These dynamics may help to explain the insignificant effects of the conventional capabilities observed in this study.

With respect to the core product’s relevance to Industry 4.0, the reasons for the unexpected result are perhaps as follows: First, many ventures are struggling to integrate Industry 4.0 technology. This technological integration requires a lot of time and resources, and not all venture firms may be able to afford it [34]. Venture firms also need the adequate infrastructure to effectively utilize Industry 4.0 technology. However, many ventures generally do not have this infrastructure and may not benefit from technology [32]. Furthermore, although utilizing Industry 4.0 technology requires highly skilled personnel, many venture firms tend to have difficulty securing such a workforce [33]. Beyond these practical constraints, another possible reason is that product-level alignment with Industry 4.0 alone does not sufficiently reflect the organization’s overall readiness to improve sustainability. Even if there are no supporting digital capabilities, such as data-driven decision-making, digitized work processes, and digital competencies among employees, having products aligned with Industry 4.0 may not lead to tangible performance improvements [38,44]. This may explain why the relationship between Industry 4.0 variables and sustainability was not statistically significant in this study. This interpretation suggests that Industry 4.0 should be understood as a transformation process of the entire organization, encompassing strategic, infrastructural, and human capital, rather than simply the technical characteristics of products [18,21].

Although both a ‘conventional level of technology’ and ‘digital-business-model innovation’ were found to be statistically significant variables, a ‘conventional level of technology’ was discovered to have lesser influence, for the following reasons: First, digital innovation enables businesses to respond quickly to the turbulent and changing market environment. Digital technology maximizes the operational efficiency of enterprises through real-time data analysis, artificial intelligence, and cloud computing. It also provides customized services and creates new business opportunities [18]. These digital innovations play a pivotal role in increasing corporate sustainability. This finding is consistent with the finding in [45], demonstrating that digital leadership consecutively enhances firm innovation and sustainability, especially in dynamic environments. Second, conventional skill levels tend to rely on fixed resources and processes, which can make them less adaptable to change [16]. On the other hand, digital-business-model innovation has a flexible and scalable structure that allows firms to respond quickly to changes in the market and customer needs. Third, digital innovation enables businesses to manage resources more efficiently. For instance, cloud computing enables businesses to use the computing resources they need without having to build expensive physical infrastructure. This reduces costs and increases resource efficiency to enhance corporate sustainability [35]. Fourth, the pace of development of digital technology is very fast, which keeps venture firms continuously seeking innovation. In contrast, conventional technology has a relatively slow development speed, which yields difficulty in maintaining a competitive advantage in a fast-changing market [19]. Fifth, digital-business-model innovation plays a central role in enhancing the customer experience. Personalized services, real-time responsiveness, convenient accessibility, etc., increase customer satisfaction, and this has a positive impact on the long-term performance and sustainability of the venture firm [5].

Taken together, the negative or insignificant relationship between conventional corporate capabilities and sustainability may reflect a form of capability rigidity. In a dynamic venture environment, conventional strengths such as manufacturing or marketing may not necessarily match the demands for agility and innovation required to sustain long-term growth [16]. Furthermore, unless these conventional capabilities are reconfigured to incorporate digital elements, their impact alone may be limited and even counterproductive. These results support the theoretical premise that dynamic capabilities, rather than static capabilities, are the key to enabling sustainability under the pressures of the Industry 4.0 era [38].

7. Conclusions

This study comprised an empirical analysis to examine the factors affecting the sustainability of Korean venture firms. As a result of the analysis, both the ‘conventional level of technology’ and ‘digital-business-model innovation’ were important variables in their sustainability, but it was found that the influence of ‘digital-business-model innovation’ was relatively greater. This suggests that venture firms can utilize digital technology to adapt to the rapidly changing market environment and use resources efficiently.

This study provides a theoretical contribution by comprehensively analyzing the relative effects of conventional innovation and digital innovation that have not been simultaneously addressed in the existing literature. In particular, by highlighting the vital role that digital-business-model innovation plays in venture firms’ sustainability, this study demonstrates that digital innovation strategies are essential for securing a long-term competitive advantage for a company. These results are consistent with extant studies based on the dynamic capability theory and technology acceptance models, and they reaffirm that digital innovation is the primary means of strengthening corporate performance [16,17].

The results of this study offer practical implications for which innovation strategies venture firms should choose to increase their sustainability. Venture firms should maintain conventional capabilities and technologies, and they also need to actively introduce digital-business-model innovation to respond quickly to market changes and manage resources efficiently. Venture firms should increase operational efficiency by utilizing digital technologies, such as big data analysis, artificial intelligence, and cloud computing, and they can create new business opportunities by providing customized services.

This study is based on data on Korean venture firms, and thus, there may be research limitations in generalizing them to other countries or different types of businesses. Moreover, the data used in this study are cross-sectional and do not reflect changes and trends over time. Therefore, in future studies, longitudinal cross-sectional data need to be used for various countries and industries, and future research should examine in-depth the various factors affecting the sustainability of venture firms. Moreover, although the samples in this study are all officially certified ventures according to national standards, there may be considerable heterogeneity among them in terms of industry sectors, business models, or growth stages. This diversity may lead to unobserved variability in the analysis results, and in future studies, it may be helpful to approach controlling or classifying this heterogeneity through methods such as a stratified analysis or multi-level modeling. Additionally, in-depth research is required on the specific mechanisms of digital-business-model innovation and the factors that reinforce its performance.

Furthermore, one of the major limitations of this study is that corporate sustainability was measured using a single item. This item was included in a nationwide official survey jointly conducted by the Ministry of SMEs and Startups and the Korea Venture Business Association, and although it has institutional reliability, it reflects only the overall perception of sustainability—especially the perception that is biased toward the economic perspective. Sustainability is a multidimensional concept that involves economic, environmental, and social aspects, and it is difficult to fully capture its complexity through a single item. As such, interpretations relating to resource use should be treated as speculative. Therefore, in future research, we recommend the use of validated multi-item scales to provide a more sophisticated and comprehensive understanding of sustainability and its determinants. Finally, in this study, Industry 4.0 relevance was measured based on the digital characteristics of the firm’s core products. However, this approach is limited in scope as it only reflects some dimensions of Industry 4.0 readiness. A more holistic assessment should include firm-level digital capabilities, digital infrastructure, and process-level transformation. Future studies should include such comprehensive measurement indicators to more accurately capture the strategic and operational impact of Industry 4.0 capabilities on venture firms.

Overall, this study contributes to the theoretical development of innovation–sustainability (emphasis added) research by comparing conventional and digital approaches through an established theoretical framework. It also provides practical implications for decision-makers in venture firms and contributes to academic discussions on innovation strategies and sustainability in the venture context.