The Role of Digital Literacy and Business Community in Driving MSME Growth through Process Digitalization
Abstract
Sustainable growth is both a challenge and a strategic goal for Micro, Small, and Medium Enterprises (MSMEs) amid technological disruption and global market dynamics. This study aims to analyze the influence of information technology literacy, business communities, business incubation, product creativity and innovation, and access to capital on the sustainable growth of MSMEs, with Digitalization of Processes as an intervening variable. The conceptual model used integrates the internal and external resource approaches of MSMEs within the framework of digital transformation.
This study employs an explanatory quantitative approach using Structural Equation Modeling based on Partial Least Squares (SEM-PLS) analysis techniques. The research sample consists of 125 MSMEs in Tambaksari District, Surabaya, selected through purposive sampling. Data was collected via a Likert-scale questionnaire and analyzed using SmartPLS 4.0 software.
The results indicate that process digitalization significantly influences the sustainable growth of SMEs. Information technology literacy and involvement in business communities indirectly influence growth through digitalization. Conversely, business incubation, product innovation, and access to capital do not show significant direct influences on growth. The model has an R² value of 71.5% for sustainable SME growth and 61.6% for process digitalization.
These findings emphasize that efforts to strengthen SMEs should focus on enhancing the digital capabilities of business actors and developing a collaborative ecosystem through business communities. Digitalization is not merely a tool but the primary driver of SME sustainability in the digital transformation era.
Keywords: MSMEs, Sustainable Growth, Process Digitalization, Information Technology Literacy, Business Community
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