Various challenges are faced by Indonesia’s micro-small-medium enterprises (MSMEs) to adopt digital transformation due to its lack of capital, human resources and internet penetration. However, restriction/lockdown policies and the fear of COVID-19 spread has changed economic activities and consumers’ lifestyle significantly, and a digital transformation has become urgent for MSMEs to reduce the severity of the economic downturn as well as to survive in the future.
We investigate if various digital transformations have made a necessary impact on MSMEs to survive the pandemic. We conducted a survey of MSMEs across Indonesia using a clustered convenience sampling to measure the digital adoption by MSMEs and their situation before and during the pandemic. Our findings show that, though they still suffer from the impacts of the pandemic, digital adoption has a positive significant effect toward the MSMEs’ performances (measured in the average monthly sales and the number of labours). Going digital enabled the MSMEs to reach a larger market and, therefore, increase their size.
Speaker: Inayati Dwiputri (Universitas Negeri Malang)
Discussant: Anna Falentina (Statistics Indonesia/BPS)
