Journal of Indonesian Applied Economics
Vol. 14 No. 1 (2026): February - June 2026

ECONOMIC EMPOWERMENT OF MSMEs THROUGH SUSTAINABLE DIGITAL TRANSFORMATION AND ASSISTED INCUBATION MODELS: A QUALITATIVE SYSTEM DYNAMICS APPROACH

Selasi, Dini (Unknown)
Lathifaturahmah (Unknown)
Vidiati, Cory (Unknown)
Munajim, Ahmad (Unknown)
Faturrizky, Izzul (Unknown)



Article Info

Publish Date
10 Mar 2026

Abstract

Purpose This research aims to enhance the long-term contribution of Micro, Small, and Medium Enterprises (MSMEs) to economic development by optimizing digital marketing strategies supported through sustainable institutional assistance. Design/methodology/approach Using a qualitative system dynamics approach, this study provides a systemic analysis to understand constraints in the digital transformation process that affect MSME scalability. Data were collected through observations, interviews, surveys, and focus group discussions (FGDs), and analyzed using system dynamics techniques. Findings Findings indicate a strong reliance on accessible but basic digital tools such as WhatsApp (100%) for marketing, while adoption of advanced platforms like SEO and SEM remains limited. TikTok Marketplace is used by only 57.89% of participants, indicating underutilization of digital opportunities. Although some MSMEs have participated in training programs, they remain hindered by limited resources, lack of innovation culture, and minimal motivation to scale up. Research limitations/implications This study focuses on 141 screened MSMEs in Cirebon Regency with a final group of 50 assisted participants, which limits generalizability across all economic sectors. Originality/value As a solution, this study proposes the development of an integrated monitoring system aligned with stakeholder platforms, enabling continuous assessment of MSME capacity and progress. This model strengthens the role of MSMEs in inclusive and sustainable economic transformation.

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Journal Info

Abbrev

jiae

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Indonesian Applied Economics (JIAE) is an online journal sponsored by the Faculty of Economics and Bussiness, Universitas Brawijaya. The purpose of this journal is to enhance the study of economic issues on all aspects of applied economics and ...