From human capital to competitive advantage: Indigenous knowledge, adaptation, and innovation in entrepreneurial success

This study examines how Indigenous knowledge systems (IKS) contribute to entrepreneurial success through adaptation and innovation using the proposed Indigenous dynamic capabilities mediation model. Drawing on survey data from 124 entrepreneurs across seven regions and analyzed using Hayes’s PROCESS macro (Model 6), the research explores both direct and mediated effects while controlling for demographic factors. Results show that adaptation is the primary pathway linking IKS to entrepreneurial growth, underscoring the importance of resilience and operational flexibility. Innovation plays a smaller role in growth but is the key mediator of competitiveness, both directly and through sequential effects from adaptation to innovation. The study establishes IKS as a dynamic, generative resource that fuels human capital and capability development. Theoretically, it integrates human capital, Indigenous knowledge, and dynamic capabilities perspectives, while practically advocating staged support, prioritizing adaptation early and fostering innovation as ventures evolve.