Exploring the Impact of Smart Governance and Business Capability on Business Collaboration and the Implication on Sustainable Performance of Micro Business in Belitung

Abstract

Purpose: Geopark development generates several investment opportunities in various sectors, including micro-enterprises. However, there is still a phenomenon of unsustainable performance problems in micro-enterprises in the Belitung Islands, in sales and productivity. This research aims to examine the influence of smart governance and business capabilities on the sustainable performance of micro-enterprises in Belitung, both directly and indirectly through business collaboration. Design/methodology/data analysis: This study used a quantitative research design. The population in this study were all micro-businesses in the Belitung Islands. The sample size was 200 respondents concerning the analytical technique used in hypothesis testing, namely structural equation modeling. Respondents in this study are small business actors in the Belitung Islands who have implemented smart technology. Findings: The results of hypothesis testing show that: smart governance has a significant effect on business collaboration, business capabilities have a significant effect on building business collaboration, smart governance has no effect on sustainable performance, business capabilities have a significant effect on sustainable performance, business collaboration has a significant effect on sustainable performance, smart governance has an effect on sustainable performance through business collaboration, and business capabilities have an effect on sustainable performance through business collaboration. Originality/value: The results of this study indicate the important role of business capability in building business collaboration of micro-business actors in Belitung which has implications for improving sustainable performance. Practical implications: The managerial implication of these findings is that efforts to improve sustainable performance for micro businesses in Belitung can be done by prioritizing the development of business capabilities capable of building business collaboration, with an emphasis on encouraging increased customer trust.