This study aims to analyze the influence of dynamic capability and digital transformation on sustainable competitive advantage through the mediating role of strategic agility in Indonesian Small and Medium Enterprises (SMEs). The significant acceleration of digitalization in the post-COVID-19 era has created new competitive pressures compelling SMEs to continuously renew their capabilities and strategies. However, most previous studies have examined these variables partially without comprehensively exploring the mediating role of strategic agility, particularly within the Indonesian SME context. This study employs a quantitative approach with a survey design targeting 200 SME owners and managers selected through purposive sampling across South Sulawesi, Java, and Sumatra. Data were analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) via SmartPLS 3.0 software. Results indicate that dynamic capability has a positive and significant effect on strategic agility (β=0.412; t=5.847; p
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