Institutional Capacity, Organizational Readiness, and Digital Transformation in Indigenous Village-Owned Enterprises: Evidence from Papua, Indonesia

Lidiah Tereda Iwo (Universitas Cenderawasih)
Syamsidar Sinaga (Universitas Cenderawasih)
Alfani Laura Harikedua (Universitas Cenderawasih)
Anita Rusianti (Universitas Cenderawasih)
Wilhelmina A I Arfusau (Universitas Cenderawasih)
Ruth Penina Somisu (Universitas Cenderawasih)
Pamince Tabuni (Universitas Cenderawasih)
Nenci Hasiani Manurung (Universitas Cenderawasih)
Aten Ugipa (Universitas Cenderawasih)

Journal of International Conference Proceedings
Vol 9, No 3 (2026): 2026 Thailand ICPM Proceeding

Digital transformation can strengthen rural enterprises, yet many Village-Owned Enterprises (BUMKAM) lack institutional readiness to implement it. This study examines how institutional capacity shapes digital transformation readiness and sustainable local economic development in indigenous dual-governance settings. A qualitative case study was conducted at BUMKAM Hena Ma Swoha in Tahima Soroma Village, Papua, Indonesia. Data from participatory observation, in-depth interviews, and focus group discussions with village officials, enterprise managers, customary leaders, and local MSME actors were analyzed thematically. Findings indicate that prolonged institutional dormancy, weak accountability, limited managerial capacity, and customary leadership arrangements undermined organizational readiness despite repeated public funding. The study concludes that digital transformation readiness depends not only on internal organizational capabilities but also on formal governance, accountability mechanisms, and customary institutions, highlighting practical pathways toward achieving sustainable local economic development.