The Role of Digital Innovation in Increasing the Competitiveness of Micro, Small, and Medium Enterprises (MSMEs)

Abstract

The development of information technology encourages business actors to undertake digital transformation to enhance competitiveness, including for Micro, Small, and Medium Enterprises (MSMEs). However, the reality is that most MSMEs in Indonesia still face obstacles in adopting digital innovations, primarily due to a lack of technical knowledge, limited access to infrastructure, and inadequate training. This research aims to explore the role of digital innovation in increasing the competitiveness of MSMEs and identify challenges and opportunities arising from the digitalization process. This study employs a qualitative approach, utilizing a case study method, with 15 MSMEs in the Greater Jakarta area. Data collection techniques are carried out through in-depth interviews, direct observation, and documentation. The study's results show that the use of social media, e-commerce platforms, and digital management systems can enhance market reach, operational efficiency, and customer relationships. However, the implementation process still faces significant obstacles, including a lack of technical training and digital gaps among business actors. This study concludes that the digitalization of MSMEs must be balanced with policy support, training, and infrastructure improvements to ensure the sustainable and comprehensive adoption of digital technology across all sectors of Indonesian MSMEs.