Micro, Small, and Medium Enterprises’ Readiness for Digital Transformation in Indonesia

Abstract

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.

The Role of Partnerships and Business Networks in the Growth of MSMEs in the Digital Age

“…Through these networks, MSMEs gain access to broader collaboration opportunities, a deeper understanding of market trends, and the potential to build long-term relationships with mutually supportive stakeholders. In a complex business ecosystem, business networks play a central role in providing support, resources, and insights that enable MSMEs to adapt to change, compete effectively, and grow in an ever-changing environment (Anatan & Nur, 2023). As such, business networks become an invaluable foundation for MSMEs in exploring the opportunities offered by the digital age, creating a framework that enables sustainable growth and success in an increasingly connected global marketplace.…”

UNVEILING THE LINK: DOES DIGITAL MARKETING ADOPTION FUEL SUSTAINABLE GROWTH FOR SMEs IN INDONESIA?

“…In light of these considerations, it is imperative to investigate and comprehend the intentions of SMEs regarding adopting digital marketing, given the potential benefits it offers, particularly for marketing purposes. Furthermore, there is a shortage of empirical studies on the behavioural intentions towards digital marketing adoption among SMEs, particularly in developing economies like Indonesia, indicating an area that warrants further exploration and research (Anatan & Nur, 2023;Andika et al, 2021). Due to this identified knowledge gap, the present research explores the relationship between digital marketing adoption and sustainable growth among SMEs in developing economies.…”

“…Studies have shown that SMEs encounter obstacles like resource constraints, financial limitations, restricted marketing approaches, and inadequate capabilities, which hinder their adoption of digital technologies as a strategic tool for achieving sustainable growth (Indrawati et al, 2020;Tambunan, 2019). Furthermore, scholars have emphasized that the inability of SMEs in developing countries to compete with larger enterprises stems from their failure to adopt and integrate digital technologies into their business marketing strategies (Akpan et al, 2022;Anatan & Nur, 2023;Ansong & Boateng, 2019). Alqasa & Afaneh (2022) argued that SMEs face challenges related to limited market reach and a smaller customer base.…”

“…Despite the recognized importance of digital marketing tools in contemporary business transformation, many SMEs in Indonesia exhibit hesitancy and lag behind large businesses in adopting digital technologies for their business activities (Andika et al, 2021). The current underutilization of digital marketing capabilities by small businesses in Indonesia reflects a scepticism towards these strategies despite the increasing demands of today's discerning consumers (Anatan & Nur, 2023;Andika et al, 2021;Indrawati et al, 2020).…”

Analysis of the Interconnection between Digital Skills of Human Resources in SMEs and the Success of Digital Business Strategy Implementation

“…However, the emerging challenges cannot be ignored. The adoption of digital technology requires MSMEs to acquire new skills in managing systems, analyzing data, and adapting to rapid changes in the business environment [2]. These new skills are crucial in ensuring the success and sustainability of businesses in this digital era.…”