Will digital literacy moderate the relationship between digital capabilities and the performance of MSMEs in Indonesia?
Dodie Tricahyono (a), Ahmad Iman Sudrajat (b)

(a), (b) School Economics and Business Telkom University

Abstract

The digitization of MSMEs is a major government program that aims to transform and encourage MSMEs to enter digital platforms, in the region, nationally, and global platforms. The Indonesian government has targeted at least 30 million Micro, Small and Medium Enterprises (MSMEs) entrepreneurs to be digitized by the end of 2024. The digitization of MSMEs is not the same as digitalization in large companies because most of the assets, businesses, and capabilities are outside the company. Thus, it is still questionable whether the digitization of MSMEs will have a positive influence on organizational performance, especially financial performance.
This research aims to test whether the digital capabilities possessed by MSMEs can improve their performance. In addition, this study will test whether digital literacy has a moderating effect on the relationship of digital capabilities and MSMEs^ performance. Respondents to this study were 400 MSME owners/managers spread throughout Indonesia. The research will use SMART-PLS, as a data processing tool. It is hoped that the results of this study will provide a clear model for the emergence of an effective MSME digitization program.

Keywords: Digital capabilities, digital literacy, MSME performance, Indonesia

Topic: Digital Business Strategy