Implementation of System Dynamics to Increase Successful Utilization of E-Commerce with Marketing and Innovation Capability in MSMEs

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play an important role in the economic development of many cities around the world. The role of MSMEs can encourage equitable economic development which is one of the main pillars of the ASEAN Economic Community (AEC). But unfortunately, there are still many people who do not know how to market a new product and have a large market potential by using internet technology. The ongoing COVID-19 pandemic is causing changes in individual habits which also has the opportunity to permanently influence market developments in the coming years. Many people choose to shop online using e-commerce. The role of e-commerce is very influential in improving the performance of MSMEs. There are several variables in the successful use of e-commerce, including internal and external inhibiting and supporting variables. This study applies the system dynamics method to link the variables of success in the use of e-commerce with variables related to the performance of MSMEs. The results of this study are the success of the use of e-commerce is interrelated with marketing and innovation capability which has a positive effect on the performance of MSMEs. This research is expected to increase the success of using e-commerce in MSMEs, especially in Indonesia.

Transforming MSMEs through Innovation and Technology: Driving Growth and Sustainability in the Digital Age

“…Previous studies have revealed the benefits of transforming MSMEs through innovation and technology. Research by Fitri et al, (2022) showed that using e-commerce can improve market access and sales of MSMEs [2]. Maheshwari et al, (2021) found that implementing business management software helped improve operational efficiency and inventory management [3].…”