The Role of Innovation in Enhancing MSME Competitiveness in the Digital Era: A Case Study of MSMEs in Indonesia

Taufik Akbar (Politeknik Negeri Jakarta)
Hafniza Amir (Politeknik Negeri Jakarta)

Journal of Business Administration and Entrepreneurship Innovation
Vol. 1 No. 1 (2024): Journal of Business Administration and Entrepreneurship Innovation

The digital era has introduced both opportunities and challenges for Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Innovation, particularly in the realms of product and process improvements, has emerged as a crucial factor in enabling MSMEs to remain competitive. This study explores how innovation drives competitiveness in MSMEs, focusing on the impact of digital transformation on their business practices. Using a qualitative approach, data were collected through interviews with 25 MSME owners from various sectors and analyzed using NVivo software. The findings reveal that innovation, particularly through digital adoption, significantly enhances MSME competitiveness by improving efficiency, customer engagement, and market reach. The study concludes that MSMEs need to embrace continuous innovation to survive and thrive in the rapidly changing digital landscape.