Improving the Escalation of Micro, Small, and Medium Enterprises (MSME) Based on Digital Economy Acceleration and Capability Through Value Creation on West Java SME Enterpriser
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Apr 30, 2024
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Abstract
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.
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References
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Skare, M., de Obesso, M. de las M., & Ribeiro-Navarrete, S. (2023). Digital transformation and European small and medium enterprises (SMEs): A comparative study using digital economy and society index data. International Journal of Information Management, 68, 102594.
Abdullah, N. H. N., Darsono, J. T., Respati, H., & Said, J. (2019). Improving accountability and sustainability through value creation and dynamic capabilities: An empirical study in public interest companies. Polish Journal of Management Studies, 19(2), 9–21.
Abdullah, Y., & Rosliyati, A. (2020). The product market strategy, value creation, and competitive advantages as a determinant factor of marketing performance. Int. J Sup. Chain. Mgt Vol, 9(3), 13.
Abdussalam, M. S. (2021). Kepala Dinas KUK Jawa Barat: Berkat UMKM Naik Kelas, 13,8 Persen Usaha Mikro Jadi Usaha Kecil. Https://Jabar.Tribunnews.Com/2021/11/29/Kepala-Dinas-Kuk-Jawa-Barat-Berkat-Umkm-Naik-Kelas-138-Persen-Usaha-Mikro-Jadi-Usaha-Kecil.
Chekfoung, T., Sunil, D., & Binita, G. (2020). Conceptualising capabilities and value co-creation in a digital business ecosystem (DBE): A systematic literature review. Journal of Information Systems Engineering and Management, 5(1).
Chen, Y. (2020). Improving market performance in the digital economy. China Economic Review, 62, 101482.
Dyduch, W., Chudziński, P., Cyfert, S., & Zastempowski, M. (2021). Dynamic capabilities, value creation and value capture: Evidence from SMEs under Covid-19 lockdown in Poland. Plos One, 16(6), e0252423.
Garrido-Moreno, A., García-Morales, V., King, S., & Lockett, N. (2020). Social Media use and value creation in the digital landscape: a dynamic-capabilities perspective. Journal of Service Management, 31(3), 313–343.
Ghosh, K., Dohan, M. S., Veldandi, H., & Garfield, M. (2023). Digital transformation in healthcare: Insights on value creation. Journal of Computer Information Systems, 63(2), 449–459.
Hair Jr, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R: A workbook. Springer Nature.
Jie, S., Harms, R., Groen, A. J., & Jones, P. (2023). Capabilities and performance of early internationalizing firms: A systematic literature review. Journal of Small Business Management, 61(3), 1143–1173.
Kamalrulzaman, N. I., Ahmad, A., Ariff, A. M., & Muda, M. S. (2021). Innovation capabilities and performance of Malaysian agricultural smes: The moderating role of strategic alliance. International Journal of Business and Society, 22(2), 675–695.
Kementerian Komunikasi dan Informatika. (2023). Retrieved November 12, 2023, from https://www.kominfo.go.id/content/detail/40915/transformasidigital-umkm-jadi-prioritas-penguatan-fondasi-ekonomi/0/berita
Kushatov, R. X., & Haydarov, J. B. (2021). The Digital Economy: Challenges and Prospects. JournalNX, 209–212.
Leppänen, P., George, G., & Alexy, O. (2023). When do novel business models lead to high performance? A configurational approach to value drivers, competitive strategy, and firm environment. Academy of Management Journal, 66(1), 164–194.
Matarazzo, M., Penco, L., Profumo, G., & Quaglia, R. (2021). Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective. Journal of Business Research, 123, 642–656.
Nadeem, W., Juntunen, M., Shirazi, F., & Hajli, N. (2020). Consumers’ value co-creation in sharing economy: The role of social support, consumers’ ethical perceptions and relationship quality. Technological Forecasting and Social Change, 151, 119786.
Niode, I. Y. (2022). The effect of management capability and entrepreneurial orientation on business performance through business strategy as an intervening variable. Jurnal Manajemen Dan Pemasaran Jasa, 15(2), 255–274.
Øverby, H., & Audestad, J. A. (2021). Introduction to digital economics: Foundations, business models and case studies. Springer Nature.
Ozdemir, O., Dogru, T., Kizildag, M., & Erkmen, E. (2023). A critical reflection on digitalization for the hospitality and tourism industry: value implications for stakeholders. International Journal of Contemporary Hospitality Management.
Peng, Y., & Tao, C. (2022). Can digital transformation promote enterprise performance?—From the perspective of public policy and innovation. Journal of Innovation & Knowledge, 7(3), 100198.
Perdana, A., Lee, H. H., Koh, S., & Arisandi, D. (2022). Data analytics in small and mid-size enterprises: Enablers and inhibitors for business value and firm performance. International Journal of Accounting Information Systems, 44, 100547.
Purwanti, I., Lailyningsih, D. R. N., & Suyanto, U. Y. (2022). Digital Marketing Capability and MSMEs Performance: Understanding the Moderating Role of Environmental Dynamism. Jurnal Manajemen Teori Dan Terapan, 15(3).
Reinartz, W., Wiegand, N., & Imschloss, M. (2019). The impact of digital transformation on the retailing value chain. International Journal of Research in Marketing, 36(3), 350–366.
Rianti, M., Azis, E., & Asnur, W. W. (2023). Sustainable Physical Resources to Value Co-Creation, Pareto Sales Network, and Marketing Performance. Journal of Indonesian Scholars for Social Research, 3(1), 44–55.
Sayed, E., & Mansour, K. (2023). Impact of Digital Transformation on Banks’ Profitability and Liquidity in Emerging Markets: Evidence from Egypt. IUP Journal of Bank Management, 22(1).
Shah, N., Zehri, A. W., Saraih, U. N., Abdelwahed, N. A. A., & Soomro, B. A. (2023). The role of digital technology and digital innovation towards firm performance in a digital economy. Kybernetes.
Sijabat, R. (2022). The Effects of Business Digitalization and Knowledge Management Practices on Business Performance: Findings from Indonesian Micro, Small, and Medium Enterprises. BISNIS & BIROKRASI: Jurnal Ilmu Administrasi Dan Organisasi, 29(2), 4.
Simanjuntak, M., Sinaga, A. M., & Simanjuntak, H. A. T. (2022). The Role of Value Co-Creation in E-Commerce to Improve MSME Marketing Performance. Proceeding International Conference on Information Technology, Multimedia, Architecture, Design, and E-Business, 2, 30–38.
Skare, M., de Obesso, M. de las M., & Ribeiro-Navarrete, S. (2023). Digital transformation and European small and medium enterprises (SMEs): A comparative study using digital economy and society index data. International Journal of Information Management, 68, 102594.