Adopting digital technology is more than just purchasing software or
building a web presence; it requires internal capabilities to generate
innovation and cultivate an adaptive entrepreneurial mindset. This insight
comes from a study by researchers at Universitas Negeri Makassar—Siti Nardiyah
Muhrami, Dwiyanti, and Nurul Haeriyah Ridwan—published in the International
Journal of Advanced Technology and Social Sciences (IJATSS). The research
focuses on the dynamics of Micro, Small, and Medium Enterprises (MSMEs) in
emerging economies, which frequently face efficiency and competitiveness
hurdles despite investing in digital tools. The urgency of this research is
high, as many government-driven MSME digitalization programs fail to deliver
measurable financial returns when not accompanied by internal organizational
capacity building.
The discrepancy in digitalization outcomes across the MSME sector forms
the context for this study. In emerging economies, MSMEs serve as the backbone
of the economy, driving employment and GDP growth. However, resource
constraints, technological skill gaps, and volatile market conditions make them
vulnerable. Although rapid advances in technology—such as artificial
intelligence (AI)—have pressured businesses to adapt, integrating technology
into daily operations requires a more nuanced approach than simple software
adoption.
To examine this phenomenon, the researchers conducted a qualitative
study using a Systematic Literature Review (SLR). The team systematically
selected and analyzed 35 peer-reviewed articles published between 2020 and 2025
from Scopus, Web of Science, and Google Scholar. Using thematic analysis, the
study integrated three core business frameworks: the Resource-Based View (RBV),
Dynamic Capabilities Theory (DCT), and the Technology-Organization-Environment
(TOE) framework.
The findings indicate that integrating strategic capabilities influences
business performance far more than standalone technology adoption. Key findings
from the research include:
- Digital
Capability as a Foundation:
Proficiency in IT infrastructure, digital marketing, and data usage
creates a solid operational base, though digital adoption alone does not
directly boost financial performance unless transformed into added value.
- Mediating
Role of Innovation Capability: Innovation capability serves as a critical bridge (mediator),
enabling firms that convert digital resources into new products,
processes, or business models to achieve sustained performance gains.
- Entrepreneurial
Orientation as an Accelerator: A proactive posture, willingness to take calculated risks, and
drive for innovativeness (entrepreneurial orientation) act as
catalysts that amplify the impact of digital and innovation capabilities.
- Contextual
Barriers in Emerging Economies: Successful digital transformation is frequently hindered by
digital competency gaps, inadequate local infrastructure, financial
constraints, and organizational resistance to change.
These findings carry significant implications for public policymakers,
business leaders, and MSME support organizations. For businesses, the study
highlights that investments in software or social media yield optimal results
only when paired with product innovation training and an adaptive work culture.
For governments and policymakers, support initiatives should move beyond
technology subsidies or free applications to focus on innovation management
training, data analytics, and broader entrepreneurial ecosystem development.
As emphasized by the researchers, long-term MSME sustainability in the
digital era depends on internal organizational synergy. "Sustainable MSME
performance depends on the strategic integration of organizational capabilities
rather than technology adoption alone," stated Siti Nardiyah Muhrami and
her team from Universitas Negeri Makassar.
Author Profile
Siti Nardiyah Muhrami, S.E., M.Si., is an academic and researcher at
Universitas Negeri Makassar specializing in business management, MSME
digitalization strategies, and entrepreneurial behavior in emerging economies.
In this study, she collaborated with fellow researchers Dwiyanti and Nurul
Haeriyah Ridwan from Universitas Negeri Makassar.
Research Source
- Article
Title: Digital
Capability, Innovation Capability, and Entrepreneurial Orientation Shaping
Business Performance of MSMEs in Emerging Economies
- Journal: International Journal of Advanced
Technology and Social Sciences (IJATSS), Vol. 4, No. 7, 2026, pp.
759–778
- Authors: Siti Nardiyah Muhrami, Dwiyanti, Nurul
Haeriyah Ridwan (Universitas Negeri Makassar)
- DOI: https://doi.org/10.59890/ijatss.v4i7.287
- https://aprmultitechpublisher.my.id/index.php/ijatss
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