The Impact of Human Capital and Knowledge Creation on Sustaining Competitive Advantage and Innovation in Medium-Sized Companies in Bali

This investigation explores the impacts of human capital and knowledge creation on sustaining innovation and competitive advantages among medium-sized companies in Bali, Indonesia.Data collection was conducted through an online questionnaire, distributed to 286 managerial personnel, with 187 complete responses received.Structural Equation Modeling-Partial Least Squares (SEM-PLS) analysis, utilizing WarpsPLS 7.0, was employed to analyze the data.The findings reveal significant relationships in several areas: human capital substantially influences knowledge creation; both human capital and knowledge creation exert a positive and significant impact on innovation and competitive advantages.Notably, innovation was found to significantly enhance competitive advantages.However, the mediating role of innovation in the relationship between human capital and competitive advantages, as well as between knowledge creation and competitive advantages, was minimal.In contrast, knowledge creation effectively mediated the impact of human capital on competitive advantages.These results underscore the pivotal role of human capital and knowledge creation in fostering innovation that supports the sustained competitive advantages of companies.This study contributes to the understanding of strategic resource management within the context of Indonesian business, highlighting the integral role of innovation in leveraging human and knowledge-based resources for competitive positioning.