Digital Adaptation to Performance of SMEs in Surakarta City, Indonesia

Abstract

Micro, Small, and Medium Enterprises (MSMEs) experience very complex problems. One of them relates to efforts to maximize the performance of SMEs. Adoption of technology into offers for all sectors increases productivity. The application of digitalization to the MSME sector is expected to boost the performance of these MSMEs. This study aims to examine the effect of digital adaptation as measured by digital literacy and the use of financial technology (fintech) on the performance of MSMEs in Surakarta City. Data was collected by distributing questionnaires to food and beverage business owners in Surakarta City. The analysis uses multiple linear regression analysis techniques. The results of the study show that there is a partial effect, only the digital literacy variable influences the performance of MSMEs, and simultaneously digital adaptation affects the performance of MSMEs in Surakarta City. So that government stakeholders, SOEs or capital businesses, and business owners can increase digitalization efforts for MSMEs in Surakarta City.