Innovation for the Third Sector Economy: Enlightenment from Dematel method

Aries Heru Prasetyo, Anthony Kuo, Jersan Hu


Innovation is needed by all types of organization including those who are coming from the third sector economy. This study tried to develop firmly-paradigm in addressing the term innovation into co-operatives, non-profit organization and social enterprise. Starting with performing a comprehensive literature review, the study found six possible dimensions for innovation namely: (1) organizational capabilities, (2) knowledge management capabilities, (3) external orientation capabilities, (4) learning network capabilities, (5) strategic capabilities and (6) dynamic capabilities. Aiming to provide clear evidence on how each dimension contribute to innovation, the study used Dematel approach to deal with multi-criteria issues. Having collected questionnaires from 26 experts, the study emphasized that external orientation capabilities shares as the greatest influencer among dimensions for the three types of organizations. As point to that, having considered the causal relationship among dimension, this study promotes a new thought in performing innovation. Socio-economy must use the identified-dimension as systematic paradigm. Finally the paper portrayed the sequence through causal-relations analysis, thus providing clear guidance for future agenda.

Keywords: innovation, third sector economy, Dematel, external orientation capabilities

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