Sani Rusminah, Nanto Purnomo

The Impact Of Digital Transformation On The Competitiveness Of SMEs Centers In Lamongan Regency With Innovation As a Mediation Variable

Introduction

The impact of digital transformation on the competitiveness of smes centers in lamongan regency with innovation as a mediation variable. Understand how digital transformation significantly boosts SME competitiveness in Lamongan Regency, with innovation mediating this crucial impact. Essential for business growth.

Abstract

Tightness competition business scale national and also international , encouraging actors business besides adopting digital is also necessary For do innovation . However , the process of digitalizing MSMEs also has complexity , challenges and risks that need to be be noticed with good . The role of innovation is very important in entering the market in the digital age. Research objectives This For analyze influence digital transformation towards Power compete , analyze influence digital transformation towards innovation , analyzing influence innovation to Power competition as well as analyze influence digital transformation towards Power competition mediated by innovation . The methods used in study This is method quantitative with taking sample using purposive sampling with obtained 150 respondents , then For analyze influence between variable use tool SEM-PLS analysis . Research results This show mark p-value influence digital transformation towards Power competition as big as 0.005 where < 0.05, so reject H0 means there is influence significant between digital transformation towards Power competitiveness . p- value influence Digital transformation towards Innovation as big as 0.000 where < 0.05, so reject H0 means there is influence significant between Digital transformation towards Innovation . p-value influence Innovation on Competitiveness as big as 0.001 where < 0.05, so that reject H0 means there is influence significant between Innovation on Competitiveness . The p-value of the influence No direct as big as 0.030 < 0.05, so reject H0 means Innovation significant mediate connection between Digital Transformation towards Competitiveness.

Review

This study presents a timely and relevant investigation into the intricate relationship between digital transformation, innovation, and competitiveness among SMEs in Lamongan Regency, Indonesia. Amidst an increasingly competitive global and national business landscape, the paper adeptly highlights the critical need for businesses to embrace digital adoption and continuous innovation. The research sets out clear objectives: to analyze the direct influences of digital transformation on both competitiveness and innovation, the impact of innovation on competitiveness, and critically, the mediating role of innovation in linking digital transformation to competitiveness. This focus addresses a significant area of contemporary business strategy, particularly for small and medium-sized enterprises navigating the complexities and challenges of the digital age. The methodology employed is a quantitative approach, utilizing purposive sampling to gather data from 150 respondents, with the relationships between variables analyzed through SEM-PLS. The findings robustly support all hypothesized relationships. Specifically, the results indicate a significant positive influence of digital transformation on competitiveness (p=0.005) and innovation (p=0.000). Furthermore, innovation is found to significantly enhance competitiveness (p=0.001). Crucially, the study confirms that innovation acts as a significant mediator in the relationship between digital transformation and competitiveness (p=0.030), underscoring its pivotal role in translating digital efforts into tangible competitive advantages. These clear and statistically significant results provide strong empirical evidence for the theoretical model proposed. Overall, the paper makes a valuable contribution by empirically validating the importance of digital transformation and innovation for SME competitiveness, especially within a specific regional context. Its strength lies in its clear hypothesis testing and the robust statistical analysis via SEM-PLS, which provides concrete evidence for the mediation effect. While the study's focus on Lamongan Regency offers specific insights for local policymakers and business owners, future research could benefit from exploring the generalizability of these findings to other regions or countries, potentially incorporating comparative analyses. Additionally, delving deeper into the specific complexities, challenges, and risks of digitalization for SMEs, as hinted in the abstract's introduction, through qualitative methods, could provide richer contextual understanding and more granular policy recommendations.

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