Determinants of Digital Innovation in Micro and Small Industries

Martini Martini, Doddy Setiawan, Retno Tanding Suryandari, Rayenda Khresna Brahmana, Andi Asrihapsari

    Research output: Contribution to journalArticlepeer-review

    5 Citations (Scopus)
    48 Downloads (Pure)

    Abstract

    Micro and small industries (MSIs) must utilize digital technology if they hope to meet obstacles and endure in a market that is always evolving owing to technological advancements. This study aims to examine the capacity of business factors, marketing factors, constraint factors, credit factors, entrepreneur factors, and firm factors as determinants of digital innovation proxied by internet adoption and internet usage levels (for communication and information, for promotion, for buying and selling, and for fintech). This study uses a sample size of 90,295 MSIs and secondary data from the MSIs survey in 2019. As analytical tools, logit and ordinary least square (OLS) were employed. The findings demonstrate that business factors, marketing factors, constraint factors, credit factors, entrepreneur factors, and MSIs’ firm factors are substantial and continuously affect digital innovation, and primarily its influence is as a motivator. These results will hopefully offer insights for the government as consideration regarding policies on how to encourage MSIs’ digital innovation, and for MSIs themselves as references when they are about to make digital innovation decisions.

    Original languageEnglish
    Article number172
    Number of pages17
    JournalEconomies
    Volume11
    Issue number6
    Early online date17 Jun 2023
    DOIs
    Publication statusPublished - 20 Jun 2023

    Bibliographical note

    Copyright: © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/)

    Funder

    The authors acknowledge financial support from Universitas Sebelas Maret, International Collaboration Research Grant, Grant nu: 228/UN27.22/PT.01.03/2023.

    Publisher Copyright:
    © 2023 by the authors.

    Keywords

    • business factors
    • digital innovation
    • internet adoption
    • internet usage levels
    • micro small industries

    ASJC Scopus subject areas

    • Development
    • Economics, Econometrics and Finance (miscellaneous)

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