MSME Empowerment Strategy to Increase Competitiveness in the Digital Era: Policy and Its Implementation

Abstract

This research examines the strategies for empowering Micro, Small, and Medium Enterprises (MSMEs) to increase their competitiveness in the digital era, focusing on the role of government policies and their implementation. The digital transformation of MSMEs has become a key factor in improving productivity and market reach, yet many face significant barriers, including limited access to digital infrastructure, lack of digital skills, and fragmented policy support. This study aims to analyze the effectiveness of current policies in supporting digital adoption among MSMEs and identify the gaps in policy execution. Using a mixed-methods approach, the research combines qualitative analysis of policy documents, government reports, and case studies, along with quantitative from MSMEs across various sectors. The findings indicate that while policies exist to support MSME digitalization, their impact is limited due to poor implementation, lack of coordination, and insufficient access to resources. Successful digital adoption was found to be more common among MSMEs involved in industry networks and those with access to financial support and digital literacy programs. The study concludes that a more integrated, tailored approach to policy-making is essential for overcoming the barriers MSMEs face in digital transformation. It recommends future research on the long-term effects of digitalization on MSME growth and the role of public-private partnerships in fostering successful digital adoption. This research contributes to the development of more effective strategies and policies to enhance MSME competitiveness in the digital economy.