The Role of Innovation and Information Technology Capabilities in Increasing the Competitive Advantage of MSMEs Coffee Shops in Jakarta

Abstract

MSMEs are the foundation of the Indonesian economy because they contribute greatly to absorbing Indonesia's workforce and GDP (Kemenkopukm, 2021). The number of MSMEs in Indonesia reaches 64.2 million with a GDP contribution of 61.07% or equivalent to Rp. 8,573.89 trillion. This proves that MSMEs are the backbone of the Indonesian economy and play an important role in generating the economy of the community at large (Izzatur Rochmaniyah, 2021). The economic condition of the population is a condition that describes human life that has economic score (Shah et al, 2020). As the backbone of the Indonesian economy, various efforts have been made by the government to increase the competitive advantage of MSMEs. One of the MSMEs that is of concern to the government is the MSME Coffee Shop because of its very fast growth. In the last 3 years, the number of coffee shops in Indonesia has tripled, from 1,083 outlets in 2016 to 3,000 outlets in 2019, and in 2020 it has increased by 15%, which is 3,450 coffee shops (Amri, 2020). The increase in the number of coffee shops has an impact on the high level of competition in the coffee shop industry so that every MSME Coffee Shop is required to have a competitive advantage over its competitors. According to Cakmak & Tas (2020), when faced with high competition, every MSME actor is required to have a competitive advantage so that they are able to offer more value to consumers than their competitors.Innovation capabilities and information technology capabilities are internal capabilities that play a strategic role in increasing the competitive advantage of SMEs in order to attract consumer buying interest in transactions (Rahmasari, 2021

Internal and External Factors Competitiveness of Sinia. Co Coffee Shop in Lampung Province

“…Social media applications are currently commonly used to promote various businesses in the creative economy and other fields. Furthermore, the development of technology and information supports future generations and supports more comprehensive marketing of a product, and information technology capabilities have a significant effect on the competitive advantages of coffee shop SMEs (Simamora & Sulistianingsih, 2022).…”