importance of social networks for the SME’s innovation potential in Industry

Social network usage is a prerequisite for the functioning of companies and their com- petitiveness. The level, focus of their usage, and link with the company process are important. This research focuses on SMEs, how they use social networks, and how this affects their innovation potential. The study aims to determine the importance of social networks for SME’s competitiveness and long-term stability. To achieve this goal, 359 European SMEs were studied (2017–2019), two research questions and seven hypotheses were developed. Pearson’s correlation and stepwise regression were used, and the obtained results were verified by experimental testing. The research results showed that companies using social media as a main component of their business, are active at using modern technologies and are declaring the importance of social networks to develop innovation potential. Fastness and reliability of communication are crucial for business operations in the company. Social networks offer many opportunities and connections between strategic planning, controlling management, and performance level. All SMEs mostly use Facebook, and this does not depend on size, age or industry. The research results lead to the understanding that social networks and controlling- oriented management support SME business activities and their innovation potential and long-term stability in a hyper-competitive environment. way, the interdependence of the external and internal environment, using social networks. The results of this study suggest a solution that can seem complex and resource-intensive to apply, but social networks have greatly simplified and streamlined this research. Furthermore, the key areas and factors in SMEs’ competitiveness and stability for the innovation potential of Industry 4.0 in terms of the use of social networks are defined.


INTRODUCTION
In the current hyper-competitive environment, the emerging technology of Industry 4.0, innovation, strong competition of large and multinational enterprises, and the interconnectedness of these entities and areas significantly impact the SMEs sector. The controlling-oriented management system and usage of social networks offer SMEs a way to strengthen their position and competitiveness in the hyper-competitive environment.
This study's originality lies in the search for solutions to the desired usage of social networks to increase SMEs' competitiveness, based on interconnection and, in a certain way, the interdependence of the external and internal environment, using social networks.
The results of this study suggest a solution that can seem complex and resource-intensive to apply, but social networks have greatly simplified and streamlined this research. Furthermore, the key areas and factors in SMEs' competitiveness and stability for the innovation potential of Industry 4.0 in terms of the use of social networks are defined.

Small and medium enterprises (SMEs)
SMEs are an important part of the economy. SME's financial stability and management of business value growth are essential in increasing SMEs' competitiveness, the cohesion of the European Union, and its economy. According to Belás . SMEs are seen as holders of knowledge. Other authors also describe and agree on SMEs as an essential factor for economic. Klučnikov and Belás (2016) state that SMEs act as the main aspect of the economy. Gama and Geraldes (2012) comment that around 99 percent of the SME's economic activities are in the European Union. SMEs play a crucial role for the national and European economies; they are a significant employer, a bearer of innovation, and an important stabilizing economic element (Tomášková & Havlíček, 2018, p. 38).
The importance of SMEs for the development of national and multinational economies is undeniable. On the other hand, the question is, what will be the development of SME stability concerning large and multinational enterprises. SMEs have several advantages over large companies. Lavia and Hiebl (2014) see their flexibility as one of the key advantages of SMEs, and state that SMEs have a simpler internal organization and can be more flexible and implement more quickly new changes and challenges.
In the context of the current globalized, highly competitive, and changing environment of SMEs, Hrašková and Bartošová (2014) state that developing the competitiveness and financial stability of SMEs are key areas of interest for governments, national authorities, and researchers, the situation, when SMEs create opportunities and challenges, is similarly perceived by Mareš and Dlasková (2016, p. 79). Developing an approach to the use of modern tools, their use for the steady growth of SMEs' value, the use of online tools, and controlling tools leads to maintaining SMEs' stability and competitiveness in the following periods. Písař and Havlíček (2018) also look at this issue similarly.
For effective management with the help of modern tools and the growth of SMEs' value, it is necessary to define a business management system based on social networks, which will connect the external and internal environment. A system will be effective not only for the analysis based on historical data but also in comparison with present results, but these results will also help plan and achieve the company's future value. The active and maximum use of social networks can fulfill this important role and function.

Social networks
The internet, social networks, and technologies now dominate the world, and one can hardly imagine the present without these tools. These are an integral part of working and personal time (Veber, 2018, p. 52 Social networks are important and can be said to be a natural part of modern times.
The research aims to determine the importance of social networks for SME's competitiveness and long-term stability.

HYPOTHESES, METHODOLOGY AND DATA
Research question Q1: How do social media impact SME's competitiveness and stability, what are the most important factors?
To answer the research question Q1, the following hypotheses were defined: H1: Industry 4.0 is an important factor, stimulating SMEs for the utilization and development of social networks as an important tool for business.
H2: SME's innovation potential is positively influenced by social networks.
H3: Social networks improve SME's communications skills, supporting communications reliability, and the fastness of information accessibility.
H4: SME's strategic planning and controlling management performance are supported by social networks.
H5: Social networks in business will have minimum moderate Pearson's linear correlation dependency with ROE, and social networks will positively influence SME's competitiveness and stability.
Research question Q2: How do social networks influence current SME's business practices and what one can expect shortly?
To answer the research question Q2, the following hypotheses were defined: H6: Social networks and their importance for SMEs are increasing in the current hyper-competitive business environment.
H7: Facebook is the most important social network channel for SMEs.

Data sources
For the research, it will be essential to determine the research sample, whereby they were selected randomly so that the research sample has a predictive ability and an even representation of SMEs to research the given issue. 741 European SMEs were selected and asked for research cooperation. For research, only those companies with complete research data were taken. The final research sample had n = 359. The research questionnaire collected empirical and sociological data. Empirical data were collected using official SME data valid for the researched period and official financial statements and others. The research was undertaken from 2017 to 2019, and it is continuing.
The Likert scale was used for collecting and evaluating sociological data. It was published in 1932 by R. Likert. The Likert scale should usually (not necessarily) use five degrees. An example of Likert scale may be 'I agree', 'I rather agree', 'Half-way', 'I rather disagree', 'I disagree', but may be expressed otherwise. The advantage of this scale is that it evaluates respondents' attitudes and weight (Hayes, 1998, p. 112). Research preparation, research sample identification, procedure methodology will be determined based on Gavora (2010, p. 261).
For this research, Paper Aided Personal Interview was chosen (PAPI). The interviewer visits the respondent and assists in answering the questions. According to Barbu and Alexandru (2011), PAPI questionnaire research can be successfully carried out for management research purposes nationally and globally.
A prerequisite for the research is that the data will be obtained from interviews with the owners, managers, top management, employees, and other persons so that the obtained data are cross-sectional.

Reliability analysis -Cronbach's alpha
For the research similar to this article, the method of calculating Cronbach's alpha is often used. According to Cronbach (1951), Cronbach's alpha takes values in the interval of 0-1. Generally, a Cronbach's alpha value of 0.7 or higher is interpreted as high reliability of the data sample examined. Cronbach's alpha is given as follows: Y is the j scatter of the score, and ( ) var Y is the total score of the test. Cronbach's α and its value evaluate the plausibility of the data and determine to what extent the conclusions based on these data can be reliable.

Variables
Variables are defined according to Písař and Bílkova (2019), in the initial stage of research.
Social networks -rating scale: 0 = not used, 1 = random use without feedback, 2 = medium level, use at least once every three months, efficiency control mechanisms is missing, 3 = high levelthe enterprise is working intensively on the use of social networks, 4 = optimized level -the company uses high-level techniques for social networks usage, and there is a process that continuously stimulates the company in social networks usage development.

Return on Equity (ROE) -return on equity capital ROE = EAT/equity capital.
Controlling -evaluation of the execution and implementation of controlling management activities in the short term. The level is evaluated based on the Capability Maturity Model Integration (CMM) methodology. Rating scale: 0 = absent or insufficient, 1 = low level, 2 = medium level, 3 = excellent level with continuous improvement.
Innovation plan -level of usage and implementation of the innovative plan in the examined business, with an emphasis on assessing the innovations' success and the feedback for the innovative plan development. Rating scale: 0 = none or insufficient, 1 = low level, inceptive state, ran-dom innovations without feedback, 2 = medium level, innovations are driven essentially, lacking the control process of innovation malfunctions, 3 = high level -enterprise is working hard on the innovative plan and has some results, 4 = optimized level -the enterprise has an innovative plan at a high level, and there is a process that constantly stimulates the enterprise to innovative behavior.
Strategic plan -rating scale: 0 = absent or insufficient, 1 = low level, 2 = medium level, 3 = excellent level involves automated ideas for innovative attitude and long-term objectives achievement. Communication -rating scale: 1 -initial, communication is random, mostly oral, 2 -basically managed, communication is oriented to operational tasks, basic electronic communication is used, 3 -managed, regular communication, electronic communication, chat, basic cloud solutions, 4 -quantitatively managed -communication is solved within the organizational structure of the company, information is subject to security, information transmission is focused on quality and speed of its transmission, basics of automated information and data transmission, 5 -optimizing -strives for continuous improvement and development.

Pearson's correlation analysis
The research collected the data from various management areas, enterprise financial performance, and stability of the company, and many others. To determine important factors -variables, it is necessary to use a tool to evaluate the interdependence between these variables. The solution offers Pearson's correlation coefficient, which evaluates the linear dependence of var-

Statistical analysis model
Research data were analyzed using regression and correlation analysis methods to prove the dependence of variables and model definition.
The following procedure is by Písař and Bílková (2019) additive model. A more detailed way of analyzing the data is following Darlington and Hayes (2017). The analysis results will serve the goal of the achievement and acceptance or rejection of the hypotheses.

Experimental testing
If at least the moderately important relationship between the variables researched will be proven, a research sample will be randomly generated for previous analysis experimental research. These SMEs will be tested using the research finding and its implementation and testing again, focusing on reaching the research objectives.

EMPIRICAL RESULTS
The data of this research were analyzed using an IBM statistical program SPSS ver. 25. A detailed description of procedures was performed according to the software manual.

Verifying the consistency and reliability of the examined sample
The analyzed sample n = 359 was tested for the tested variables' complexity with the statistical program SPSS ver. 25. The calculation of this indicator achieved a value of 0.898 for n = 7 variables. Cronbach's alpha value of 0.7 or more means high reliability and consistency of the analyzed sample. Based on this result, the examined data can be presented as highly reliable and consistent.

Stepwise regression and forward selection model
Dependent on variable -social networks, the procedure by stepwise regression and forward selection is used, computing with all variables immediately. The procedure is following Darlington and Hayes (2017).
The analysis procedure continued by entered and removed variables to the model. Closer results are in Table 2.
The next step of model computing is selective regression hyperplanes (Table 3). Note: ** Correlation is significant at the 0.01 level (2-tailed). *** Communication.  These results follow the results by Písař and Bilkova (2019). Table 4 shows that the overall F-test model with six explanatory variables is also significant at the 5% significance level.

Analysis data interpretation
Statistical analysis results are significant at 1% and 5% levels. Cronbach's alpha computing results show that data reliability analyses are on a high level, and conclusions based on these data are relevant. Based on that, the research questions and hypotheses will be evaluated. Based on Pearson's correlation, the variable Industry 4.0 reached a moderate or very tight relationship with all tested variables (see Table 1 for details). These values are significant for the linear dependence of the variable tested. Based on the social networks model, Industry 4.0 has an important value of 0.254 at a model scale. The companies, which are using social media as a component of their business, are also active at using modern technologies. Hypothesis H1 should be declared as proved.
H2: SME's innovation potential is positively influenced by social networks.
The companies that are successful in innovation activities are also declaring the importance of social networks to develop innovation potential. Based on Pearson's correlation, the variable Innovation plan reached a moderate or very tight relationship with all tested variables (see Table 1   for details). These values are significant for the linear dependence of variables tested and proving the role of social media for SME's innovation activities. The value 0.203 of Innovation plan of the social media model declares its importance. Hypothesis H2 should be declared as proved.
H3: Social networks are improving SME communications skills, supporting communications reliability, and fastness of information accessibility.
Based on deep research of communication in SMEs, it was recognized that communication's fastness and reliability are crucial for business operations in the company. Communication and its importance were evaluated based on Pearson's correlation as a moderate or very tight relationship. The social networks model evaluates Communication on a 0.125 value. Communication is supported by using social networks. Hypothesis H3 should be declared as proved.
H4: SME's strategic planning and controlling management performance are supported by social networks.
The existence of strategic planning and a controlling management system in a company declares that the company can think in the long term. A company, which uses social networks, can analyze the current environment and search for opportunities. Social networks that offer many opportunities and connections between strategic planning, controlling management, and social networks are no surprise. Pearson's correlation coefficient shows a moderate or very tight relationship between variables researched, and the model of the social networks evaluates strategic plan (0.199) and controlling (0.077) levels. Hypothesis H4 should be declared as proved.
H5: Social networks in business will have minimum moderate Pearson's linear correlation dependency with ROE, and social networks will positively influence SME's competitiveness and stability.
Companies, which are using and supporting social networks as part of their business activities, have a higher ROE value. Partly because the digital envi-ronment is a new growing market place and by social networks, companies can increase their activities there. Pearson's correlation coefficient shows the moderate linear dependency between social networks and ROE (0.466). Hypothesis H5 should be declared as proved.
Q1: How social media are impacting SME competitiveness and stability, what are the most important factors?
Based on personal research, on statistical analysis, the results were experimentally tested on selected companies. The findings are as follows: • SME's age -the research showed that companies younger than five years are using social networks for current business operation (promotion, communication, marketing research, …) in 78%, companies aged between 5 and 10 years in 61% and older in 49%. The company that uses social networks is closely connected with top management and its support. Usually, if older people manage the company, 50 years plus have a lower need for social networks use and vice versa.
• Business core -SMEs operating a business closely connected to technologies like, for example, IT is usually accepting social networks like a natural part of the business. SMEs operating in the technology field are using social networks in 94% for their business operations. On the other hand, SMEs from agriculture, craftwork, animal husbandry, and some types of services are using social networks only in 21%.
• Industry 4.0 -SMEs operating a business by using Industry 4.0 or are coming to start with Industry 4.0 in 3 years are using social networks for business operation (hiring employees, promoting, marketing research, effective long-distance communication, ….) in 79 %.
• Innovation plan -based on the research, it was found that companies, which are using social networks, are also active in innovations. 86% of the companies, which are using social networks on a high level, are also active in innovation activities, have an innovation plan, and control management by continuously evaluating innovation results, focusing on achieving innovation goals.
Based on data analysis and results, experimental testing proves the consequences of using social networks, company stability, and competitiveness.

Experimental analyses data testing
The analysis result was experimentally tested to verify statistical results. This research was compounded from applying research knowledge and focused on a deeper understanding of social networks' importance for the SME's innovation potential in Industry 4.0. Based on that, the following research question and hypotheses were evaluated.
H6: Social networks and their importance for SMEs are increasing in the current hyper-competitive business environment.
The researched companies operating in social networks also had in total higher ROE values, approximately about 3.6 %. 67% of SMEs, which focus on using social networks, are active in export, and 74% are thinking about an expansion using Industry 4.0 technologies and social networks. Also, SME's innovation activities are mainly supported by social networks in 34 % of companies, and as a tool for marketing research and inspiration, the social networks for innovation activities are used in 74 %. Based on previous findings, the hypothesis H6 should be declared as proved.
H7: Facebook is the most important social network channel for SMEs.
Through the experimental testing, the research was also oriented on the most important social networks platform. It was recognized that the most used is Facebook with high distance, and then YouTube and Instagram were important for SME's business operations. Based on research results, hypothesis H7 should be proved.
Hypotheses H6 and H7 helped answer Q2: How the social networks influence current SME's business practices and what one can expect in the not too distant future?
Before answering this question, size, SME's age, top management age, and type of industry must also be important, and it is not possible to answer in general conclusions. On the other hand, big numbers' law is declaring clearly that Facebook is predominant as a social network tool. The research results show that all SMEs are mostly using Facebook and do not depend on size, age, or industry. The companies pronounced that they are using Facebook and will use this network in the future (77%).

DISCUSSION
In the same period as the authors of this paper, the AMSP's result is that 8 out of 10 companies consider innovation important; 3 out of 10 even considered it very important. Process innovation and product innovation are the most common types of implemented innovations (AMSP, 2018). The authors of this research agree that the companies, which are successful in innovation activities, also declare the importance of social networks for the development of innovation potential. The consequence of this is the growth of ROE values.

CONCLUSION
The research aimed to determine the importance of social networks for SME's competitiveness and long-term stability. Based on previous findings and experimental testing, the authors can declare that social networks are crucial factors for SME's innovation potential in Industry 4.0. The companies, which are using social media as a component of their business, are active at using modern technologies, are successful in innovation activities, and are also declaring the importance of social networks for the development of innovation potential. Fastness and reliability of communication are crucial for business operations in the company. The existence of strategic planning and controlling management system in a company declares that the company can think in the long term. The companies, which use social networks, can analyze the current environment and search for opportunities based on the relationship between strategic planning and controlling management, are also active in innovations, and have an innovation plan. By controlling management, they are continuously evaluating innovation results with the emphasis on achieving innovation goals. These companies have a higher value of ROE and are closely connected with top management and their support. Usually, if older people manage the company, it has a lower need for social networks use and vice versa. The SMEs operating a business closely connected to technologies, usually accept social networks like a natural part of the business.
The knowledge and findings obtained can be used for deeper research and application in business practice. Also, the research opened topics for deeper research. If companies want to know how to talk about them, it is clear that it is better to be in social networks than not to be. It is a good idea to learn more about potential and existing customers, their opinions, habits, or tastes. If a business says yes, social networks should not miss it. Their potential is far from being exploited.