Digital Platform Capability and Strategic Agility: Uncovering Strategies to Strengthen Indonesian F&B SMEs Competitiveness

This study investigates the effect of digital transformation on the competitiveness of small and medium-sized enterprises (SMEs), highlighting the mediating role of innovation capability. Grounded in the Resource-Based View (RBV) and Dynamic Capabilities Theory, the research develops and empirically tests a structural model that links digital transformation, innovation capability, and SME competitiveness. A quantitative survey was administered to 400 SMEs operating in Khanh Hoa Province, Vietnam, and data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results reveal that digital transformation has a significant positive impact on both innovation capability and SME competitiveness. Furthermore, innovation capability exerts a positive influence on competitiveness and partially mediates the relationship between digital transformation and SME competitiveness. The findings emphasize that digital transformation alone is insufficient to enhance competitive performance unless firms simultaneously develop their innovation capabilities. This study contributes to the growing body of research on digitalization in emerging economies and provides practical insights for SME managers and policymakers aiming to foster digital readiness and innovation-driven competitiveness. Policy implications, limitations, and directions for future research are also discussed.

Purpose The purpose of this paper is to examine the role of creative destruction as mediation between the speed of innovation and competitiveness of food small and medium enterprises (SMEs). Creative destruction that is competence-based and market-based is usually done by incumbent enterprises to create barrier to entry and widen the distance with similar businesses, then the role of creative destruction as a mediation to strengthen the competitiveness is investigated. Design/methodology/approach To test this, data were collected from 161 SMEs that is the food SME population in Great Malang covering three areas namely Malang Municipality, Malang Regency and Batu Municipality. warp partial least square-structural equation modeling (WarpPLS-SEM) was applied because parameter estimation with WarpPLS-SEM is very efficient because it has greater statistical requirements than other covariant-based methods, which is more likely to deliver results that match the population condition (significant if that is in fact significant in the population). Findings The pace of innovation development is very important to improve the competitiveness of food SMEs. The idea of innovation is quickly realized and products that enter the market faster have a greater chance to improve competitiveness through profit and productivity. The pace of innovation development enhances the competitiveness of food SMEs. This study proves that competitiveness can be increased once the pace of innovation development is followed by creative destruction. Creative destruction in this case is done through increased competence and maintain the innovations that have been achieved by food SMEs. Increased business competence could be conducted through cost efficiency enhancing product quality and improving worker skill. It is conducted while maintaining the achieved innovation to strengthen the market network customer service and innovation in product packaging. The government’s role is proven not to strengthen the relationship of the pace of innovation development and competitiveness of food SMEs. The role of the government is reflected through credit facilities business licensing promotion marketing and training. These have been carried out by the government. Nevertheless, these activities do not generate widespread impact in strengthening the pace of innovation development to enhance the competitiveness of food SMEs. Research limitations/implications The main limitation of this study is that it analyzes processed foods and innovations in general. Future research should investigate one type of processed food based on the typology of innovation so as to provide more effective and efficient recommendations. Originality/value This is the first known analysis of innovation speed and creative destruction for SMEs of food sector.

In the context of emerging markets marked by volatility, uncertainty, and technological disruption, digital transformation has become a crucial enabler of strategic agility for Small and Medium Enterprises (SMEs). This study explores how digital capabilities contribute to strategic agility and, subsequently, to the competitive advantage of SMEs. A mixed-methods approach was employed, combining quantitative data from 300 SMEs across Indonesia, Vietnam, and Ghana with qualitative case studies from five selected firms. Quantitative analysis using Partial Least Squares Structural Equation Modeling (PLS-SEM) confirmed that digital capabilities significantly enhance both strategic agility and competitive advantage. Moreover, innovation culture and external collaboration were found to be significant moderating variables in these relationships. Qualitative findings support these results, revealing that digital maturity reflected in process reorientation, platform integration, and data-driven responsiveness enables SMEs to adapt and innovate under uncertainty. The findings provide actionable insights for policymakers and practitioners seeking to enhance SME resilience through inclusive digital strategies. This study contributes to the extension of dynamic capabilities theory by integrating cross market agility responses into the framework of digital transformation in emerging economies.

<p class="AbstractText">Micro, small and medium-sized enterprises (SMEs) are considered to be the engine of the European economy. In EU SMEs make up more than 99% of all companies and provide around 75 million jobs. They are a key source of job creation and stimulation of entrepreneurial spirit and innovation and are therefore essential for fostering competitiveness and maintaining employment in the EU. Yet SMEs often have problems in raising funds to finance fixed investments and inventory and working capital. SMEs mostly use internal sources while the most important external sources of SMEs are bank loans, which are not easily accessible. Hence, one of the priorities of the European Commission is stimulating SMEs through EU funds and programs in order to enable SMEs development and finally to contribute to economic growth. SMEs sector also dominates the economic structure of Croatian economy and they have similar financing problems. However, Croatia in period 2014 – 2020 have at disposal a total amount of 10.676 billion of euros from European structural and investment funds, of which 8.397 billion are aimed for cohesion policy objectives and 470 million euros are aimed for the development and competitiveness of SMEs. Besides, EU programs COSME and HORIZON 2020 are intended to provide direct support to SMEs and to create a favorable environment for their development. However, even though the number of successful project applications for small and medium-sized enterprises in the total share of Croatian project applications is relatively high, fund absorption has not reached satisfactory levels. Using the sample of Split-Dalmatia County’s SMEs, this study finds out reasons for low absorption capacity from SMEs point of view: SMEs are interested in funds from European Union, but are not sufficiently familiar with their availability i.e. funds at their disposal, especially programs COSME and HORIZON 2020; SMEs state that they know how to apply for EU funds but considered the procedure as complicated and demanding regarding documentation, and that the needed knowledge and know-how for proposal is beyond their scope; SMEs are not satisfied with the cooperation with state institutions, especially Ministry of Regional Development and EU funds and Croatian Chamber of Economy. We point out four main conclusions: (1) SMEs are not enough aware of EU financing possibilities; (2) additional promotion of EU programs directly to SMEs is required; (3) additional education of SMEs regarding project proposal and documentation is needed and (4) more proactive policy of state institutions and cooperation with local authorities is expected. Finally, greater awareness and professional help might be a key in strengthening the SMEs, whose entrepreneurial spirit and innovation process is a prerequisite for economic growth and development.</p>

This paper examines how small and medium-sized enterprises (SMEs) in an emerging market context convert social commerce engagement into competitive performance. While social commerce is often framed as a democratizing force that lowers market entry barriers for small businesses, its actual impact on business competitiveness remains uneven. Using empirical data from 201 SME owners actively operating on TikTok Shop and Instagram Shop, this study investigates the role of internal structural readiness, specifically transactive memory systems, task specialization, and coordination in shaping performance outcomes. Partial Least Squares Structural Equation Modelling (PLS-SEM) was employed to analyze the relationship between digital engagement and competitive advantage. The results show that social commerce investment alone does not significantly enhance market penetration or sales performance unless supported by internal mechanisms that allow SMEs to manage digital complexity collectively. These findings shift the conversation from adoption-centric models toward organizational capacity and knowledge integration as key enablers of digital competitiveness. By extending the Resource-Advantage Theory of Competition, this study highlights how internal knowledge structures and team adaptability determine the extent to which digital resources can be transformed into market value. The paper contributes to the growing literature on digital transformation among SMEs by offering a structural perspective on performance readiness in the social commerce domain. It also offers managerial implications for SMEs seeking to strengthen internal capabilities, as well as for platform providers and policymakers aiming to build more inclusive digital ecosystems in emerging economies. In doing so, this research addresses both theoretical and practical gaps in understanding the micro-foundations of SME competitiveness in knowledge-driven digital markets.

This study investigates the factors influencing the competitiveness of small and medium-sized enterprises (SMEs) in Sabah, focusing on the roles of human resources, infrastructure, and implementation. Addressing these issues is crucial to facilitate digital transformation among SMEs in Sabah and promote more inclusive economic development. Using a quantitative approach and Partial Least Squares Structural Equation Modeling (PLS-SEM), data were collected from SMEs across various districts in Sabah. The findings reveal that both infrastructure and implementation have significant and positive effects on competitiveness, supporting established theories that emphasize the importance of tangible assets and strategic execution in enhancing firm performance. However, contrary to much of the existing literature, human resources demonstrated a significant but negative relationship with competitiveness. This suggests that within the Sabah context, challenges such as limited skills, insufficient training, or misaligned HR strategies may be hindering SMEs' ability to leverage human capital effectively. The study contributes to the literature by offering context-specific insights into SME development in a geographically and economically diverse region, and it highlights the need for more targeted policies to strengthen human resource capabilities to support sustainable competitiveness.

Researchers, entrepreneurs, and governments all agree that Small and Medium-sized Enterprises (SMEs) play an important role in the world's economic development. This study sought to examine the effect of innovation on SMEs' competitiveness and performance in Cote d’Ivoire. Data for the study was obtained from 250 SMEs operating in Cote d’Ivoire through a structured questionnaire. The PLS-SEM was the main analytical tool used to analyse the research findings via SmartPLS 3 and SPSS 22. Findings from this study revealed that marketing innovation, product innovation, organisational and process innovations are the innovation dimensions that contribute to SMEs' performance and competitiveness in Cote d’Ivoire. Marketing innovation contributes more significantly to SMEs' performance; followed by product innovation; organizational innovation; and process innovation. Additionally, the study found a significant and positive relationship between competitive advantage and SMEs' performance. The study thus concluded that to remain competitive and profitable, SMEs operating in developing countries must embrace innovation and constantly seek ways to be innovative remain relevant in the industry.

The pivotal role of small and medium-sized enterprises (SMEs) in fostering economic growth cannot be overstated, with these entities encompassing approximately 80% of all businesses in Sri Lanka. In the Jaffna region, SMEs significantly contribute to local economic performance. However, there is limited research on the specific advantages of AI marketing for SMEs in this locale. This study aims to assess how the integration of AI technologies in marketing practices enhances the growth and competitive edge of SMEs. The study employs a qualitative research design, utilizing purposive sampling to select eight SME owners and managers as participants. The study population consists of SMEs in the Jaffna region that have the potential for digital transformation. In-depth interviews were conducted to gather rich, contextual data. The data analysis process involved thematic analysis. The findings reveal that there is a general lack of awareness and understanding of AI marketing among SMEs in Jaffna, with many businesses continuing to use traditional methods. Challenges include inadequate digital infrastructure, limited access to AI tools, and a shortage of skilled personnel. Despite these obstacles, there is growing interest in adopting AI marketing to improve operational efficiency and market competitiveness. The study offers key insights for policymakers, business leaders, and technology providers in Jaffna, emphasizing the need for greater AI marketing awareness, education, and investments in digital infrastructure. Targeted support for SMEs will enhance their competitiveness and drive regional economic development. In conclusion, this research offers a comprehensive assessment of AI marketing's impact on SMEs in Sri Lanka, particularly in the underexplored context of Jaffna. The findings suggest that with proper support and resources, AI marketing can play a critical role in enhancing the growth and competitiveness of SMEs, thereby fostering regional economic development.

Aim . The work aimed to develop a process-project methodology for managing and assessing digital transformation, adapted for small and medium-sized enterprises (SMEs) and aimed at increasing their competitiveness and sustainable development in the digital economy. Objectives . The work seeks to analyze conceptual approaches to business digitalization and identify their limitations when applied to SMEs; define strategic and tactical goals of digital transformation and align them with key business processes; develop a process-project management model for digitalization, including a system for assessing the maturity of processes and the effectiveness of individual digital initiatives; formulate practical recommendations for creating an organizational and methodological framework (Digital Competency Center) to support the transformation; as well as to substantiate the integration of the author’s method with digital maturity models (ADKAR, McKinsey DQ, Capgemini DMM) to develop a comprehensive digitalization management tool. Methods . We applied systems and process-project approaches, providing a holistic consideration of digital transformation as a multi-level and continuous process encompassing strategic, tactical, and operational management levels. A combination of methods was employed, including a comparative analysis of conceptual approaches to digitalization, a structural-functional method for identifying the relationships between processes and projects, and modeling to construct a process-project architecture for digital transformation. In order to assess performance, a twotier metrics system is proposed, focused on measuring the maturity of end-to-end business processes and the effectiveness of a number of digital initiatives. This enables not only to identify bottlenecks but also to formulate recommendations for improving the digital maturity and competitiveness of SMEs. Results . The process-project approach represents a balanced and effective methodological foundation for the digital transformation of SMEs, as it aligns strategic goals with tactical initiatives and avoids fragmentation of digitalization. The analysis revealed that the use of a process-based or project-based approach leads to limited effectiveness, since the former results in the risk of mechanical automation of inefficient processes, while the latter results in a silo effect and project inconsistency. The developed proprietary methodology, based on a two-tier assessment system (the maturity of end-to-end business processes and the effectiveness of digital initiatives), enables the identification of key growth points and ensures the integrity of digital transformation. The practical significance of the study consists in the proposal of an organizational mechanism in the form of a Digital Competence Center, which serves as an integrator and coordinator of digital projects, thereby contributing to the increased digital maturity, sustainability, and competitiveness of SMEs in the digital economy. Conclusions . The digital transformation of SMEs should not be viewed as a combination of isolated projects, but as a comprehensive and continuous process based on strategic goals and end-to-end business processes. A comparative analysis revealed that a process-project approach serves as the optimal methodological basis for digitalization, as it ensures a balance between improving operational efficiency and achieving long-term strategic development. The proposed methodology for assessing digital transformation, based on a two-tiered metrics system, enables objective measurement of process maturity and the effectiveness of digital initiatives, thereby facilitating the development of a holistic digital ecosystem of an enterprise. The practical value of this article consists in the development of recommendations for creating a Digital Competence Center that ensures the integration of projects and processes, as well as in the rationale for a combined approach using digital maturity models (ADKAR, McKinsey DQ, Capgemini DMM). The results confirm the need for a systemic, proactive, and data-centric approach, which contributes to the growth of digital maturity, competitiveness, and sustainable development of SMEs in the digital economy.

This study investigates the impact of behavioral factors—cognitive biases, emotional states, and personality traits—on financial decision-making within small and medium-sized enterprises (SMEs) in Northern Lebanon. Recognizing the central role of SME managers in shaping the financial strategies and competitive edge of their firms, the research examines how psychological factors influence decision-making in a challenging and often uncertain market environment. Drawing on behavioral finance theory, the study identifies specific cognitive biases such as overconfidence and loss aversion, which skew risk perception and lead to either excessive risktaking or an overly conservative approach. Emotional factors, including fear, enthusiasm, and stress, were found to significantly alter financial choices, with emotions often overshadowing rational decision-making. Additionally, personality traits such as extraversion, neuroticism, and conscientiousness were shown to influence managers’ willingness to take risks or prioritize stability. A quantitative methodology was employed, with data collected from 450 SME managers across diverse industries. The statistical analysis revealed strong correlations between these behavioral factors and financial outcomes, suggesting that cognitive and emotional influences play a substantial role in the financial health and competitiveness of SMEs. The study advocates for the introduction of behavioral training programs and emotional regulation techniques to help managers make more balanced, data-driven decisions. By integrating behavioral insights into financial management, SMEs can enhance their strategic decision-making processes, minimize the adverse effects of biases, and better position themselves for long-term success. The findings contribute to the growing body of research on behavioral finance in the SME context and highlight areas for future exploration, including cross-cultural studies and the impact of economic fluctuations on managerial behavior

Despite being a key driver of the national economy, Micro, Small, and Medium Enterprises (MSMEs) continue to face significant challenges in enhancing their performance. While prior research has examined various factors influencing MSMEs' performance, limited attention has been given to the role of strategic flexibility and competitive intensity. This study aims to investigate the impact of strategic flexibility on MSMEs' performance, with competitive intensity as a moderating factor. To achieve this, the study involved 80 MSMEs from Yogyakarta and Sleman in data collection. Subsequently, the data was examined by employing a Partial Least Squares Structural Equation Modeling (PLS-SEM), ensuring a comprehensive evaluation of the proposed relationships. The findings reveal that strategic flexibility plays a direct role in improving MSMEs' performance, regardless the level of competitive intensity. This insight offers valuable theoretical contributions while also providing practical managerial implications for MSME owners and managers, emphasizing the importance of cultivating strategic flexibility to sustain business growth in an increasingly dynamic market environment.

The objective of this study is to investigate relationship between organizational structure, innovation and performance in Micro, Small, and Medium Enterprises (MSMEs), with a particular focus on the mediating role of innovation. The research provides a novel lens by examining how distinct dimensions of organizational structure—formalization, flexibility, centralization, complexity, and specialization—interact with stages of innovation to influence multidimensional performance outcomes. This research explores how structural design aligns with environmental contingencies and drives innovation as a dynamic capability in MSMEs. The integration of these theories enables a nuanced understanding of organizational adaptability and performance within resource-constrained settings.The methodology adopted for this research comprises employing a quantitative cross-sectional design, data from 400 MSMEs was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that innovation significantly mediates the relationship between organizational structure and performance. Key structural dimensions such as flexibility and complexity demonstrate a pronounced impact on adaptive capacity and strategic agility in MSMEs. By integrating structural and innovation paradigms, this study provides actionable insights for policymakers and MSMEs leaders who aim to enhance competitiveness and sustainability in a rapidly evolving business landscape. This research adopts a holistic approach by considering the interactive effects of structural dimensions and staged innovation processes on MSMEs performance. This comprehensive perspective addresses critical gaps in understanding how structural design facilitates continuous innovation and sustainable performance

Purpose This study aims to examine the role of creative destruction and knowledge creation which is a mediation between the speed of innovation and the competitiveness of food small- and medium-sized enterprises (SMEs). Creative destruction and the creation of competency-based and market-based knowledge are usually carried out by companies in power to create barriers to entry and expand distance with similar businesses, so the role of creative destruction and knowledge creation as mediation to strengthen competitiveness is investigated. Design/methodology/approach The data in this study were collected from 161 UKM which are the population of food UKM in Malang, covering three regions, namely, Malang City, Malang Regency and Batu City. Warp Partial Least Square-Structural Equation Modeling (WarpPLS-SEM) has greater statistical requirements than other covariance-based methods, which are more likely to give results that are in accordance with the conditions of the population (significant if it is actually significant in the population) so that it is very efficient. Findings It is very important for the pace of innovation development to improve the competitiveness of food SMEs. Innovation ideas are quickly realized and products that enter the market faster have greater opportunities to increase competitiveness through profits and productivity. The pace of innovation development increases the competitiveness of food SMEs. This study proves that competitiveness can be increased once the pace of innovation development is followed by creative destruction and knowledge creation. In this case, creative destruction is done through increased competence and maintain the innovations that have been achieved by food SMEs. Increasing business competence can be done through cost efficiency, improving product quality and improving worker skills. This is done while maintaining innovation achieved to strengthen market networks, customer service and innovation in product packaging. The basis of organizational learning is knowledge creation; this point is missing in organizational learning theories. The focus here is on the creation of knowledge as a process, a missing factor in theories about learning organizations. Research limitations/implications This study has limitations that this study analyzes processed foods and innovations in general. Future research should investigate one type of processed food based on an innovation typology so that it can provide more effective and efficient recommendations. Originality/value To the best of the authors’ knowledge, this is the first known analysis of innovation speed and creative destruction for SMEs of food sector.

Small and medium-sized enterprises (SMEs) constitute the backbone of Poland’s economy, generating more than two-thirds of national employment and contributing significantly to GDP growth, innovation capacity, and regional development. In the context of global economic turbulence, geopolitical instability, and the accelerated digital transformation of markets, the resilience of SMEs has become a decisive factor for national economic stability. Poland’s government has intensified efforts to design comprehensive policies tailored to strengthening SME competitiveness, reducing administrative burdens, and supporting digital, environmental, and financial adaptation. These state policies are not merely support instruments but strategic levers that shape the country’s long-term economic trajectory. Their effectiveness determines the ability of SMEs to absorb external shocks, innovate, expand internationally, and contribute to sustainable development. The objective of the study is to analyze the role of Poland’s state policy in reinforcing the economic position of SMEs and to determine how regulatory, financial, and digital support instruments enhance their resilience, competitiveness, and innovation capacity. The study also aims to identify gaps in current state interventions and outline directions for refining SME policy in alignment with European Union strategies and global economic trends. The research methodology includes a combination of comparative policy analysis, institutional assessment, and empirical data evaluation. National statistical data from Statistics Poland (GUS), reports of the Polish Agency for Enterprise Development (PARP), and EU-level documents such as the SME Strategy for a Sustainable and Digital Europe were analyzed to assess the structural conditions of SMEs. A review of scholarly literature allowed for the identification of theoretical approaches to SME support, including institutional economics, innovation systems theory, and public governance models. Empirical insights were supplemented through qualitative assessments of national programs such as the Polish Deal (Polski Ład), digitalization grants, tax relief mechanisms, and sector-specific support for manufacturing, agriculture, and technology-based SMEs. The triangulation of data strengthens the validity of conclusions and allows for the identification of systemic patterns of policy–enterprise interaction. The study reveals that Poland’s SME policy has significantly expanded over the past decade, focusing on five key areas: financial support, deregulation, innovation incentives, digital transformation, and export expansion. Financial programs, including low-interest loans, loan guarantees, and EU co-financed grants, have improved liquidity and investment capacity for SMEs, particularly during the COVID-19 and post-pandemic recovery periods. Deregulation reforms have reduced administrative burdens, shortened business registration processes, and improved tax procedures, increasing operational efficiency. Innovation and digitalization programs—such as subsidies for Industry 4.0 technologies, online tools, and cybersecurity—have accelerated SME productivity and technological adoption. Export support initiatives have strengthened Poland’s presence in global markets by offering trade missions, internationalization vouchers, and access to EU single-market tools. Despite these achievements, several challenges persist, including uneven digital readiness among micro-enterprises, bureaucratic complexity in grant procedures, and regional disparities in SME development. However, the evidence demonstrates that comprehensive state policy has contributed to strengthening national economic resilience and improving SME competitiveness. State policy aimed at supporting SMEs plays a crucial role in shaping Poland’s economic stability. By improving financial accessibility, stimulating innovation, advancing digital competencies, and supporting international expansion, the government effectively strengthens the foundation of the national economy. The study confirms that SMEs benefiting from state support demonstrate higher levels of resilience, adaptability, and long-term growth potential. Nonetheless, policy improvements remain necessary, especially in simplifying administrative procedures, enhancing digital inclusion, and ensuring equitable regional access to support programs. Further research should explore the long-term effects of specific policy instruments on SME competitiveness and economic resilience. Comparative analyses between Poland and other EU member states could identify best practices in SME governance. Future studies should also consider the role of green transformation policies, artificial intelligence adoption, and public–private partnerships in enhancing SME sustainability and global competitiveness.

The COVID-19 pandemic imposed unprecedented operational disruptions on small and medium-sized enterprises (SMEs), with youth-led businesses emerging as one of the most vulnerable segments due to limited capital reserves, constrained digital infrastructure, and dependence on in-person transactions. Lockdowns, mobility restrictions, and shifts in consumer demand patterns accelerated the imperative for digital transformation, positioning artificial intelligence (AI) as a strategic enabler of business continuity, market adaptation, and resilience. This study investigates the role of AI-enabled tools—specifically customer interaction systems, predictive analytics, social media marketing automation, eCommerce enablement, and personalization—in supporting the survival and competitive positioning of youth-led SMEs during the pandemic. Findings reveal that AI-driven customer interaction tools maintained service continuity and reduced operational costs by up to 40%, with youth-led SMEs exhibiting greater adaptability in deploying low-code AI due to higher digital fluency. Cross-regional comparisons underscore disparities in adoption depth, shaped by infrastructural readiness, data quality, AI literacy, and regulatory frameworks. While developed economies leveraged advanced digital ecosystems for comprehensive AI integration, SMEs in developing regions often adopted modular, low-code solutions to circumvent skill and infrastructure constraints. The study also identifies persistent ethical and governance challenges—such as algorithmic bias, privacy risks, and uneven access—that were deprioritized in favor of immediate operational survival. These findings contribute to the growing body of literature on AI-enabled SME resilience by highlighting the unique absorptive capacities of youth-led enterprises, the synergistic effects of integrating multiple AI applications, and the contextual factors mediating adoption outcomes. The paper concludes by proposing a conceptual framework for future research, emphasizing the need for longitudinal, cross-sectoral, and policy-oriented studies to examine AI’s long-term impact on SME competitiveness in post-crisis economies.