Digital Transformation in Indonesian MSMEs: Adoption, Impact, and Future Directions

Abstract

This research explores the digital transformation of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia, focusing on the patterns of adoption, the impact on operational performance, and the future prospects of digital technologies in this sector. The study employs a descriptive literature analysis to synthesize findings from various sources, including peer-reviewed journals, industry reports, and government publications. Results indicate that while there is a growing trend towards digital adoption among Indonesian MSMEs, several barriers hinder effective integration, such as cost, lack of digital literacy, and infrastructural deficiencies. The study highlights the significant benefits of digital transformation, including increased market access and operational efficiency, alongside the challenges that need strategic interventions. The findings emphasize the need for comprehensive policies and tailored training programs to facilitate digital adoption in MSMEs. Future research directions include empirical studies to further investigate the impacts of specific digital strategies and the development of a supportive digital ecosystem for all Indonesian MSMEs.