A REVIEW ON MSME'S READINESS IN FACING INDONESIA'S DIGITAL-BASED ECONOMIC TRANSFORMATION (original) (raw)
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Micro, Small, and Medium Enterprises’ Readiness for Digital Transformation in Indonesia
Economies, 2023
Journal Link: https://www.mdpi.com/2227-7099/11/6/156/pdf Publication: Economies, Vol 11, 1-21 Authors: Dr. Lina Anatan; Nur, MT Corresponding Author: Dr. Lina Anatan (lina.anatan@eco.maranatha.edu) The Fourth Industrial Revolution (IR4) and the COVID-19 pandemic have become triggers for micro, small, and medium enterprises (MSMEs) to conduct digital transformation even though there are many problems that need to be resolved, particularly those related to the readiness of MSMEs in facing digitalization. This study aims to investigate Indonesian MSMEs and identify problems and types of knowledge transfer activities. By involving 101 MSMEs selected using convenience sampling and collected through an online survey, the hypotheses testing shows that the perception of higher drivers for IR4 promoting IR4 readiness is supported, while the perception of higher barriers to IR4 decreasing IR4 readiness is not supported. The problems faced by MSMEs in Indonesia are related to financial, human resources, marketing, operational, administrative, and organizational management. To solve these problems and enhance the readiness for digitalization, knowledge transfer activities from universities to MSMEs are needed. This study provides a theoretical contribution to the strategic management literature to fill the lack of studies on MSMEs’ e-readiness in developing countries and a practical contribution to assist decision-makers in formulating strategies to support MSMEs in facing IR4 and solving internal problems through knowledge transfer activities.
Indonesia’s MSEs on the Path to Digital Transformation
Advances in social science, education and humanities research, 2023
Micro and Small Enterprises (MSEs) have a strategic role in the national economy. In the current era, MSEs can take advantage of digital platforms in various aspects of their business, which include activities to get suppliers for production purposes, ease of access to capital to financial institutions, use of technology in financial management and promotion, and use of marketplaces in marketing activities. This research aims to identify and examine aspects of digital transformation administered by MSEs in Indonesia. Thus, this research can support RIRN in the Social Humanities, Culture, and Education sector, a sub-study of Entrepreneurship, Cooperatives, and MSMEs. So that MSMEs can contribute to Indonesia's blue digital-based economic development. The data collection method in this research is qualitative research. The results of this study show that MSEs in Indonesia are at the pre-core and core stages, and some are at the adjacent and transform stages, but their numbers still need to be increased. The digital transformation aspect in this study includes four aspects, namely: financing aspect, marketing aspect, payment aspect, and financial transaction recording aspect. Among these four aspects, which most implemented by MSEs are marketing and payment aspects (more than 90% of respondents), while for financing and financial transactions aspects (around 37% of respondents).
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DIGITALIZATION OF MICRO, SMALL MEDIUM ENTERPRISES (MSMEs) IN EAST JAVA, INDONESIA
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This study attempts to provide an overview of the digitalization of MSMEs in East Java. It is a qualitative descriptive study in which the data were collected through surveys with simple random sampling method. Basically, 80 percent of MSMEs have integrated digital literacy, particularly in the context of product marketing, into their strategy, yet only 12 percent have carried out it professionally. In East Java, 70 percent of MSMEs emphasize digital marketing through social media platforms, i.e., Instagram and Facebook, while 30 percent prefer mixed method. This study also reveals that either using a single platform or multi platform, it statistically has insignificant effect on the ratio of online transactions. Nevertheless, there is a significant positive effect between the ratio of online transactions and the management quality of digital marketing.
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The transition to the industry 4.0 era has forced businesses worldwide, including Indonesia, to adapt to digital transformation. The problem faced by small and medium-sized businesses is the readiness to adopt digital technology. It is necessary to study the readiness of Small Medium Sized Enterprises (SMEs) to face changes so that information and needs from SMEs can be obtained to adapt to this new era. This paper aims to analyze SMEs’ technological readiness to carry out digital transformation in Indonesia. The research method is quantitative, involving 150 SMEs in Manado City. North Sulawesi Province, Indonesia online. Data analysis with multiple regression. The research findings reveal the readiness of SMEs to carry out digital technology transformation in Indonesia. The implication of this research is to serve as a guide for the government, universities, and the industrial world so that SMEs in Indonesia can successfully transform digital technology.
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This article aims to identify both internal and external factors that influence the Digital Transformation (DT) process of Micro, Small, and Medium-sized Enterprises (MSMEs) during the COVID-19 pandemic. The Covid-19 pandemic, which hits all countries including Indonesia, forces business entities, including MSMEs, to digitally transform their business process. The government’s policies on physical distancing and Large-Scale Social Restriction in several regions greatly impacts MSMEs’ activities i.e. decreasing demands or sales up to 60%. The government’s support for improving the telecommunications infrastructure and a digital ecosystem plays an essential role in accelerating DT. Besides, the government’s initiative to establish business centers can also promote DT of the MSMEs. Moreover, this article describes the challenges faced by MSMEs in carrying out DT during the pandemic. This article applied a conceptual approach to explore the influential factors, both internal and extern...
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MSME acceleration in Indonesia has an essential role in enhancing the national economy and contributing significantly to Indonesia's GDP. However, in its implementation, there are still several obstacles, including limited connections to digital technology, digital skills, and management. This research investigates the influence of the digital economy and capabilities on business performance through value creation on West Java MSME business actors or enterprises. The research implemented quantitative methods through descriptive and verification analysis, with partial least squares-structural equation modeling (PLS-SEM) analysis techniques. The number of samples used was 127 respondents consisting of experts and practitioners (expert judgment). The sampling technique uses the online sampling method. The research results show that digital economic variables have a significant positive influence on MSME value creation, capability variables hold a direct positive influence on value creation, and also direct and indirect influences on MSME business performance. Value creation variables have a direct influence on business performance. The results of this research can be used to improve digital business in a way that is more appropriate for West Java MSME business actors.
Digital transformation refers to redefining the business process via digital technology. The innovation and digital revolution have remarkable effects on the global economy by affecting organisational relevancy in the marketplace. SMEs are considered as a nation's growth engine and seriously affected due to tech-adaptation challenges that arise at a fast pace such as COVID-19 outbreaks severely affected the SMEs businesses by the drop in demand and scarcity of resources all across the globe, including ASEAN region such as Malaysia, Indonesia, Singapore, Philippine, Thailand etc. Thus, to begin with digital transformation, enterprises must be aware of the factors influencing it as only few countries are lagging in digital transformation in the ASEAN region. This paper aims to highlight the factors influencing the digital transformation of SMEs focusing on internal and external factors. The Innovation and Technology Adoption Theory was selected as the underpinning theory for this research, along with the holistic Technology-Organisation-Environment (TOE) Model as the chosen framework to reflect technology adoption theory. The present study raises some practical implications for policymakers, government and industries. It will help accelerate the rapid adaptation of digital technology for SMEs and directly affect the growth of SMEs. The present study singled out that organisational, technological and environmental factors provide a widespread view of digital transformation of SMEs.
Digital readiness of SMEs: An Insight from Indonesia
AFEBI Management and Business Review
In the era of industrial revolution 4.0, digital technology is constantly improving in many areas of industry, particularly in business. It forces every business, whether large corporations or small businesses, to make various adjustments in order to keep up with the advancement of digital technology. They should be aware of how far their improvement and readiness have advanced in the digital era. This paper measures the digital readiness of SMEs and categorizes them into the level of digital readiness. The research examined the level of digital readiness among businesses, particularly small and medium-sized enterprises (SMEs) in West Java. A survey of 113 SMEs in West Java was conducted to assess their digital readiness. This research used a descriptive survey research approach. The research method itself is carried out by using a cross sectional survey method. Five variables used in this research include people, process, strategy, technology, and integration. Findings indicated th...