Interactive Components of Digital MSMEs Ecosystem for Inclusive Digital Economy in Indonesia

Abstract

The study examined the interactive components of digital micro and small medium enterprise (MSMEs) ecosystem for inclusive digital economy, more specifically found ways to put the digital MSMEs ecosystem to work for accelerating the MSMEs digitalization. The multiple cases studies’ findings and discussion supported the model building. The model of digital MSMEs ecosystem was formulated as the surrounding interactive components of ecosystem, enabling digital MSMEs to realize and accelerate toward the digital economy. The novelty of model represented the reality of digital MSMEs ecosystem in Indonesia. There were three main constraints of digital MSMEs ecosystem to work: (i) human capital in digital talent, (ii) socio-technical adaptation, and (iii) government support for MSMEs going digital. Putting the digital MSMEs ecosystem to work needs three ecosystem resolutions: (i) building the MSMEs human capital in digital talent; (ii) acceleration of socio-technical adaptation to the digital application; and (iii) the sustainability of existing government support for MSMEs going digital to create inclusive digital economy. The recommendation for three digital MSMEs ecosystem resolutions needs to consider sectoral and regional characteristics in practices.

Introduction

Background and Objective

Micro and small medium enterprise (MSMEs) is an essential component of Indonesia’s economy. The MSMEs, including micro-business, build up 99% of total businesses in the country and significantly contribute to the creation of jobs (Capri, 2019). Until 2018, the MSMEs population had reached 64 million and created 117 million jobs (Ministry of Cooperation and SME, 2020). Majority of those SMEs are starting to experience a digital transformation journey in response to market demand (Deloitte, 2021). Although the digital ecosystem was booming, marked by the rapid growth of digital marketplaces (Tokopedia, Shopee, Bukalapak, Lazada, and Blibli), however, the adoption of digital technology by MSMEs is still low. Among 64 million MSMEs, only 8 million (12.5%) have onboarded into online businesses and used digital technology (Wantiknas, 2020a).

The digitalization of MSMEs has intensified since the COVID-19 pandemic. The MSMEs response to adapt with COVID-19 through digital transformation reflected the MSMEs organizational resilience (Klein & Todesco, 2021). Various responses emerged: stay with conventional business, switch to online selling, join existing business platforms, or create their own digital platforms to meet the digital demand. At least three categories of digital business have accelerated with the digital consumers’ influx, namely education, retail, and loans. The massive changes toward the digital economy have pushed the evolution of Indonesia’s digital ecosystem. Thus, it demanded the MSMEs adaptation efforts to survive and grab the digital opportunity. Onboarding into the digital transformation would become the key to resiliency during and post-pandemic era (Crupi et al., 2020).

The digitalization of MSMEs has been widely documented in the literature. The previous research results on MSMEs digitalization were generally related to (i) managing the digitalization process of SMEs from conventional to digital-based business transactions (Dahbi & Benmoussa, 2019; Kaarianen et al., 2020; Savrula et al., 2014; Sin et al., 2016; Szopa & Cyplik, 2020); (ii) the application of internet technology for commercial transactions, business processes, and production (Garzoni et al., 2020; Kabanda & Brown, 2017; Sarosa, 2012; Sen et al., 2016; Ulas, 2019); and (iii) SMEs going global through digital platforms (Ganne & Lundquist, 2019; Moertini, 2012; Ueasangkomsate, 2015).

Although plenty of academic sources on the digitalization of SMEs, however, by far, we could not find literature related to digital MSMEs ecosystem, such a knowledge gap would be filled by this study. This would become the novelty of this study. The digital MSMEs ecosystem here is defined as the surrounding interactive components, which enable digital MSMEs to realize and accelerate toward the digital economy (see literature review). The objective of study is to investigate the interactive components of digital MSMES ecosystem for inclusive digital economy viewed from a policy perspective, by which the results of the study will contribute to realize and accelerate MSMEs digitalization in Indonesia.

The specific question of the study is how to put the digital MSMEs ecosystem to work for accelerating the MSMEs digitalization in Indonesia? The questions are the following: (i) What and how model of digital MSMEs ecosystem that works is? (ii) What constraints of digital MSMEs ecosystem to work are? (iii) What resolutions for putting the digital MSMEs ecosystem to work? (iv) What scientific and practical contributions of this digital MSMEs ecosystem study are?

Multiple Case Studies

This study was conducted through a multiple case studies approach by the following reasons: (i) the subject of study on ecosystem contains complexity and contextual conditions (Yin, 2014); (ii) the multiple case studies can strengthen the grounding of theory building (Eisenhardt, 1989); and (iii) the multiple case study results are likely to generate novel concepts. This research involved a total of 26 MSMEs’ cases from three regions in Indonesia, i.e., West Sumatra, West Java, and Yogyakarta. The region selection represented the distribution of MSMEs population by regions. The selected MSME firms satisfy three criteria: (i) meeting the MSME criteria stipulated by the government regulation, specifically in terms of total assets and sales turnover, (ii) encompassing the two sectors, namely, food and fashion sectors as the dominant sectors in three regions, and (iii) covering the different levels of digitalization, i.e., conventional, e-commerce, e-business, and industry 4.0.

The data collection method was semi-structured interviews and focus group discussions with MSME owners, pertaining to (i) the MSMEs profile and market performance, (ii) the digitalization level and the dynamics of the transformation process, and (iii) the enabler and inhibiting factors during the transformation process. Face to face interviews with MSMEs owner and entrepreneurs were conducted for 2 h on average, recorded, and the transcriptions were done. The collected data from multiple case studies was categorized into three regional profile data.

The Regional Profile Data

First, West Sumatra region. Nine MSMEs were studied comprising the food and fashion industry, furniture industry, and a local marketplace initiated by an academician from a local university and run by young entrepreneurs. The profile of MSMEs digitalization in West Sumatra is summarized in Appendix Table 4. General characteristic of West Sumatra’s MSMEs emphasizes more on individual competition rather than business collaboration.

Second, West Java region. Eight MSMEs were studied, mainly composing fashion commodities and one food commodity representing the MSMEs going digital in West Java. The profile of MSMEs digitalization in West Java is summarized in Appendix Table 5. General characteristic of West Java’s MSMEs is more adaptive to upgrade technology capability and increase in production capacity.

Third, Yogyakarta region. Nine MSMEs were studied, mainly from food commodities, one fashion commodity, and two crafts representing the MSMEs going digital in Yogyakarta. The profile of MSMEs digitalization in Yogyakarta is summarized in Appendix Table 6. General characteristic of Yogyakarta’s MSMEs is occasionally influenced by the social habits of “nrimo” (in local term), namely being satisfied with what has been obtained without having to struggle very hard to find what has not been obtained.

Data Analysis

The data from the case study were categorized into six components of the digital MSMEs ecosystem: (i) digital SMEs market, (ii) human capital, (iii) innovation, (iv) socio-technical adaptation, (v) digital financing, and (vi) government role. Furthermore, the findings were elaborated by sector and by region . The discussion on the findings was done by using the conceptual model of digital MSMEs ecosystem. Then, the conclusion was drawn from the discussion.

Literature Review

Ecosystem

An ecosystem is the interaction between components or actors in equilibrium within the as if borderless of the system and its ecology or environment. It is the interaction of whole components surrounding the ecosystem. The definition based on Golley (1993:167–205) on the history of ecosystem concept. The actors involved in ecosystem work at local, national, and global levels. There are several types of ecosystem, including industrial ecosystem, innovation ecosystem, business ecosystem, entrepreneurship ecosystem, digital ecosystem, and global ecosystem (Harland & Whitmore, 2007; Pilinkiene & Maciulis, 2014).

Ecosystem Perspective

The ecosystem can be seen from four interrelated perspectives: (i) industrial ecology perspective based on industrial ecosystems, the company as the main actor to realize industrial system sustainability; (ii) business ecosystem perspective based on organizational theory, collaborative private companies as main actors to realize common objectives; (iii) platform ecosystem perspective that departs from management theory, with companies and consumers as the main actors to collaborate in the platform; and (iv) multi-actor network perspective is based on social network theory, government agencies, private companies, and consumers as main actors to establish multi actors’ relationships (Tsujimoto et al., 2018). Understanding these interrelated perspectives and interactive actors, ecosystem research requires a cross-disciplinary team (Major, 1969).

Ecosystem Models

The model can be differentiated by (i) customer participation model. Under the customer-driven business ecosystem, the view of customers has changed from a passive buyer to an active participant, who behaves as partner-producer or partner-value creation in the ecosystem (Joo & Shin, 2018); (ii) business value chain model. The values-driven business ecosystem consists of four elements of the value chain, namely end-user value, business value, collaborative value, and social value where a reliable business model as the goal of a company (Leviakangas & Oorni, 2020); (iii) business environment model. This ecosystem is composed of four interrelated components: actors, main business ecosystem, the business sector, and socio-economic dimension of technology. Actors and their activities are lower layer components that are conditioned by components in the upper layers (Moller et al., 2020); (iv) digital economy model. The digital economy ecosystem constitutes four interdependent sub-ecosystems: the business ecosystem, the consumer ecosystem, the ecosystem of talent and innovation, and the ecosystem of digital platforms and communications (Karpunina et al., 2020).

Model of Digital MSMEs Ecosystem

The model of sector’s digital economy ecosystem, focusing on MSMEs sector, was constructed. The model represents the relevance problems on how the Indonesian MSMEs ecosystem going digital. The initial model was viewed from multi perspectives, it was developed from extensive literature review, and originally consisting of five interrelated components, namely economy, socio-technical system, governance, human resources, and innovation by digital. Each component consists of several elements that interact with each other in the complex ecosystem. All actors in every component and element of the ecosystem have an equally important position as an enabler in realizing the SME digital economy. The iteration process was carried out to refine the initial model based on information cross-check (triangulation) with the owners of MSMEs under studies. The cross-check was also complemented by feedbacks from several workshops with relevant stakeholders, namely MSMEs business association, central and local government institutions dealing with MSMEs, financial institutions, and digital providers. The construction of final model reflecting the Indonesian MSMEs reality is viewed from a policy perspective composing of six components. For the steps of iteration process, it is depicted in Appendix Fig. 2.

The digital MSMEs ecosystem here is defined as the surrounding interactive components of ecosystem, enabling digital MSMEs to realize and accelerate toward the digital economy. The model comprises six components as a continuing process of building a digital MSMEs ecosystem. Putting the model to work is creating a digital MSMEs market as the main objective, through continuously positive feedback interaction between six components, controlled by the regular government role. The model uses policy perspective, where the government role is central. Other possible components beyond the six components of model are excluded. See Fig. 1.

Fig. 1.

Model of digital MSMEs ecosystem for inclusive digital economy (constructed by authors)

Digital MSMEs Market

The acceleration of digital transformation for MSMEs should be under the role of government as (i) enabler to facilitate MSMEs for an inclusive digital economy development and (ii) controller to oversee institutions dealing with the inclusive digital economy (Bachtiar et al., 2020). Digital transformation should elevate SMEs moving up from local, national to global market players. The MSMEs’ lack of knowledge about the marketplace and the ability to look over the market opportunities in digital media needs an integrated training system by mixing mentorship, access to financing and marketing (Ningsih et al., 2019). It becomes the basis for MSMEs moving up to global e-commerce, where upgrading the SME capabilities that underlie global e-commerce development are (i) marketing-based capabilities including the ability to develop a new market offering, ability to reach and process customer knowledge, and skill development; and (ii) digital business capability (Tolstoy et al., 2020).

Human Capital’s Continuous Learning for Innovation

Major problems of human capital are (i) the owners/managers of MSMEs are not familiar with digital technology in MSMEs, and (ii) lack of skills and knowledge, both in management and business operation, lead to the generation of barriers to digital technology adoption (Martin et al., 2013). The differentiation of ICT adoption, skill, and use in MSMEs are determined by the age and education level of human capital (Kusumaningtyas & Suwarto, 2015). Digital transformation depends on MSME entrepreneurs’ capability (Li et al., 2018). A critical challenge faced by MSME’s leaders, as a consequence of the continuing digital technology revolution, is to optimally align business strategy with digital technology to fully leverage the potential offered by these technologies in pursuit of longevity and growth (Li et al., 2016). Human factor facilitates innovation in digitalized MSMEs through customer-orientated digital service capabilities enable value co-creation (Saunila et al., 2019). MSME leaders need to support continuous learning about the properties of digital technologies for innovation, which entailing the more flexible time, place, work tasks, and social interaction (Yanuardani, 2018).

Innovation Through Digital Ecosystem

MSMEs needed to be innovative to compete, but it is not sufficient. Product, process, and organizational innovations alone are no longer sufficient for MSMEs to survive and thrive. The greatest strength now is innovation through digital ecosystems: creating added value through partnerships. Currently, there is a new business model and the rules of the game are made together with partners and stakeholders, namely MSMEs, industry’s/MSMEs service partners, suppliers, customers, government, non-governmental organizations, and city governments. MSMEs can develop from a tiny company; then, they can grow into a platform through digitalization, creating an ecosystem. In the platform, all elements collaborate in interdependence and work together in competition to grow together. This business innovation-based digital ecosystem is characterized by high complexity, interdependence, cooperation, competition, and mutual evolution (Gay & Szostak, 2019).

Socio-Technical Adaptation Induced by Digital Technology Application

Digital technology application will increase the SMEs reputation from the eyes of their customers. The better the reputation of SMEs, the more they encourage SMEs to develop platforms. Creating a platform will encourage a collaborative economy, shifting from competition to coalitions between companies and forming a partnership in the business platform (Gay & Szostak, 2019). Digital technology application calls for digital transformation in society, where humans are re-shaping the way society works, including patterns for information and communication (Norqvist, 2018). Staying at home during COVID-19 has the effects for social habits to use online trading and buying retail e-commerce and SMEs, which is driven by institutional support and demand change (Dannenberg et al., 2020). Seeing from the socio-economic angle, digital technology application emphasizes the complementarity between technological transformation and social adaptiveness (Strohmaier et al., 2019). In the broader context, whether the focus is technology, economic, and society, the digital society implies technically growing reliance on electricity in supporting socio-economic development (Hasna, 2009).

Digital Financing to Promote MSMEs

The development of inclusive digital finance can significantly ease the financing constraints of MSMEs. Digital finance provides full play to the advantages of “low cost, fast speed and wide coverage” through scenes and data to reduce the financial service threshold and service cost, improve MSMEs’ financing environment, and serve inclusive financial subjects (Huang, 2019). Digitalization is a leading enabler of MSMEs finance, where SMEs can use software solutions and tools to transform their businesses digitally. Key technologies transform financial services and impact MSMEs finance. New digital financial products such as FinTechs, BigTech companies, and other financial institutions offer MSMEs and individuals. The digital MSMEs financial services as a response to pandemic include the following: (i) digital payments include payments initiated by debit or credit card, mobile phone, computer, tablet, or wearable digital device; (ii) digital lending advances in technology make it possible to digitalize different types of credit products and offer them to SMEs in a faster, more convenient, and sometimes cheaper way than through traditional methods (IBRD/World Bank, 2020).

Government Role for Digital MSMEs

There are various roles the state can act in developing the digital economy. The general roles are as follows: (i) setting new policies for the digital age and aligning digital initiatives with national development strategy, (ii) investing in human and organizational complements and institutional learning across all sectors to secure digital dividends and inclusion, (iii) supporting R&D and innovation and playing an entrepreneurial role in researching and testing promising new digital platforms and technologies, and (iv) extending the backbone telecommunications infrastructure and securing access to an inclusive and affordable internet. The specific roles of nurturing a digital transformation ecosystem are as follows: (i) promote the effective supply and use of ICT in all sectors of the economy, especially ICT use and linkage for export orientation, (ii) upgrade skilled human in digital literacy, digital application, and data entrepreneurship, (iii) provide grassroots and demand-driven innovation funds, which support the use of ICT for socially driven and bottom-up innovation to improve the local SMEs performance and local people, (iv) provide affordable access to the Internet and ICT tools and promote societal trust in the use of ICT tools, and (v) facilitate access to digital financing for building an inclusive digital economy (Hanna, 2018).

Multiple Case Studies’ Results

Component of Digital MSMEs Ecosystem at Firms Level

The six components of digital MSMEs ecosystem at firms level are depicted in Table 1.

Table 1.

Component of MSMEs ecosystem at fims level

MSMEs		Component of ecosystem
No	Firm	Digital MSMEs market	Human capital	Innovation	Socio-technical adaptation	Digital financing	Government role
1	ZS	Overseas	Average workers’ digital skill	Create simply new product variances	Follow digital training	Combine cash and bank transfer	Digital training, exhibition
2	BM	Overseas, increase by digital	Average worker’s digital skill	Improve product quality	Reluctance to learn digital	Combine cash and bank transfer	No training attended
3	TL	National, stable by digital	Moderate workers’ digital skill	Improve product features	Use digital application	Combine cash and bank transfer	Exhibition, promotion support
4	AF	Province, increase by digital	High workers’ digital skill	Create simply new product variances	Use digital application	Combine cash and bank transfer	No training attended
5	DC	National, increase by digital	Moderate workers’ digital skill	Create simply new product variances	Use digital application	Combine cash and bank transfer	No training attended
6	KM	National, stable by digital	Moderate workers’ digital skil	Create simply new product variances	Use digital application	Combine cash and bank transfer	Training and mentoring, funding support
7	LE	Local	Low workers’ digital skill	Create simply new product variances	reluctance to learn digital	Cash only	Business management training
8	CH	National	High workers’ digital skill	Improve production process	Use digital application	Cash only and bank transfer	Overseas exhibition, export information
9	KE	Local	Moderate workers’ digital skill	Improve product quality	Promote digital application	Combine cash-online transaction	Entrepreneurship training
10	SR	National	Average workers’ digital skill	Improve production process	Use digital application	Combine cash and bank transfer	Technical training
11	SO	National, stable by digital	Moderate workers’ digital skill	Improve product features	Use digital application	Combine cash-online transaction	Technical training
12	KB	National	Average workers’ digital skill	Create simply new product variance	Reluctance to learn	Cash only	No training attended
13	RC	National, stable by digital	Moderate workers’ digital skill	Improve product features	Use digital application	Combine cash and bank transfer	Technical training, exhibition
14	SH	National, stable by digital	Moderate workers’ digital skill	Improve production process	Use digital application	Combine cash and bank transfer	Exhibition
15	OS	National	Average workers’ digital skill	Create simply new product variances	Reluctance to learn digital	Cash only	No training attended
16	MT	National	High workers’ digital skill	Improve product features and distribution	Use digital application	Combine cash-online transaction	No training attended
17	WK	National	High workers’ digital skill	Improve product features and distribution	Use digital application	Combine cash-online transaction	Technical training, mentoring
18	GJ	National, increase by digital	Moderate workers’ digital skill	Improve product features, quality, and production	Use digital application	Combine cash and bank transfer	Technical and digital training, promotions, funding support
19	BS	Local, increase by digital	Moderate workers’ digital skill	Create simply new product variances	Use digital application	Combine cash-online transaction	Technical training, exhibition
20	LH	Local	Average workers’ digital skill	Create simply new product variances	Follow digital training	Cash only	Business management training
21	SK	Local	Average workers’ digital skill	Create simply new product variances	Reluctance to learn digital	Combine cash and bank transfer	Technical training, exhibition, procurement
22	IP	Local	Average workers’ digital skill	Create simply new product variances	Reluctance to learn digital	Combine cash and bank transfer	Technical training, exhibition, production facility
23	KS	Local	Below average workers’ digital skill	Create simply new product variances	Reluctance to learn digital	Cash only	No training attended
24	SP	National	High workers’ digital skill	Improve product features, quality, and production	Promote digital application	Combine cash-online transaction	Necessary permits and certification supports
25	BL	National	Moderate workers’ digital skill	Improve marketing	Reluctance to learn digital	Combine cash and bank transfer	Exhibition
26	BB	International and national	Moderate workers’ digital skill	Improve product features	Use digital application	Combine cash-online transaction	Digital training, exhibition (national & overseas)

Note on categories order:

• Workers’ digital Skill: high, moderate, average, below average

• Socio-technical adaptation: un-trusted to digital, reluctance to learn digital, follow digital training, use digital application, promote digital application

Digital MSMEs Market

The case studies show that most MSMEs have the capability to serve the national market or even the international market. However, MSMEs market to overseas generally does not follow formal export channels, meanwhile using informal channels such as personal networks (Indonesian diaspora or local visitors) and government promotion program (exhibitions). It indicates MSMEs capability in meeting export requirements, such as international standard and export regulations, were still low. Pandemic COVID-19 has challenged MSMEs to accelerate their digital market. However, it requires certain capital investment, human skills, and also changing business models, as described in the following sections.

Human Capital

Most MSMEs already hold basic digital literacy as they understand the importance of using digital technology for their business and how to use it for the primary function. The successful MSMEs demonstrate more preparedness to build and seek opportunities to enhance their capabilities actively. They participate in plenty of training activities from the government and others such as corporations or foundations. They also upgrade their digital strategy regularly, through training on digital platforms, hiring IT professionals to build their own websites, or investing in digital equipment. The rapid development of MSMEs technical production capabilities is shown by those who pursue intense development programs and actively develop their expertise by participating in technical training programs and collaborating with various stakeholders.

Innovation

Most MSMEs have a low level of innovativeness in their business. They are only capable of occasionally creating new product variances. Meanwhile, several firms can partially improve their product features or product quality. Among these MSMEs, there are at least five MSMEs that stand out in terms of innovation. Two of them, such as MT and WK (from West Java), can be acknowledged as a modern digital business with a brokerage model that connected producer and buyer through their offline and online channels. These two firms have improved the traditional supply chain connectivity. In addition, MSMEs also acquired capabilities to improve their product features, quality, and production process through collaboration with a research institute and/or university.

Socio Technical Adaptation

For MSMEs with limited knowledge and resources, there are various MSME responses to digital technology: (i) Some have been trained to use the application, such as social media, digital platform, or even digital production; (ii) Some of them use digital applications to link with customers and potential customers to improve their production capacity; (iii) Some were reluctant to apply the digital application because of high investment, the requirement of a particular skill and dedicated human resources, fierce competition, a new business model, and other considerations such as misuse of technology, fraud, and copyright; (iv) A few of them promote the use of digital technology, particularly for MSMEs with business in digital service and development. The MSMEs in IT business developers would provide training and assistance for other MSMEs in terms of digital skills, production, and market improvement; and (v) Most customers were having low digital literacy, and some of them were not trusted if buying products without having physical contact with the products such as fashion products or prime products (high price).

Digital Financing

Most of the MSMEs that have not implemented modern digital financing (e-loan) and payment (such as mobile banking, Go-pay, Ovo, and Shopee pay). The majority of them are utilizing cash and banking service payments (such as transfer and debit). The SMEs connected to e-commerce platforms automatically use the electronic payment system, but the payment system is not connected to their internal account system. Seven firms can utilize modern digital payment. They can catch up with digital technology through various ways, such as (i) self-learning and participating in various training, (ii) involving the younger generation in the family who has sufficient digital literacy, (iii) hiring dedicated employees; and (iv) assisted by online platforms and/or banks.

Government Role

Most MSMEs appreciated the government’s role in facilitating training and exhibitions. The training is related to technical capacity building to support the core business process (e.g., sewing and crafting). Other training are related to digital literacy and managerial capability improvement. Many MSMEs have acquired several benefits from these facilities, such as improved production capability, production capacity, and sales. However, the challenges of government role in supporting or facilitating MSMEs were still high, such as program discontinuity, minor beneficiaries, and program suitability to MSMEs. As a consequence, some programs sometimes were less effective in supporting MSMEs.

Component of Digital MSMEs Ecosystem by Sector

The component of digital MSMEs ecosystem by two sectors: food and fasion are depicted in Table 2.

Table 2.

Component of digital MSMEs ecosystem by sector

Ecosystem component	State of digitalization by sector
	Food	Fashion
Digital MSMEs market	• The majority of MSMEs served local market, and some of them also distributed to other provinces, and very few also served international market particularly dried food or processed food • Having good partnership with logistics providers, able to meet quality and packaging standard are also factors behind this digital transaction • The international market opportunity is coming from informal network with Indonesian diasphore and also promotion support from government	• Local and national customers were dominated market for MSMEs fashion • International customers are occasionally during attending international exhibitions • Connecting to digital market, or applying digital production have opened opportunity for MSMEs to expand their market in fashion sector • Market expansion is suppoted by production automation for MSMEs in fashion sector
Human capital	• The majority of MSMEs have moderate level of digital skill, while some of them possess either average or high level of digital skill. A small portion of below-average digital skill MSMEs is identified in this sector • The development of production capability relies on SME’s own initiatives • Endorsement on sustainability and health issue rise in this sector	• Most MSMEs have moderate level of digital skill, while some of them possess either average or high level of digital skill • The development of production capability relies not only on MSMEs’ initiatives but also on the co-creation process between MSMEs and their customers • The sustainability issue is less of a concern for m fashion sector
Innovation	Most of firms show a low level of innovativeness by creating simply product variances; only a few of them able to improve their product features and quality, also production processes	Some of them show moderate level of innovativeness by continuous developing new design to be able to compete in competitive fashion market
Socio-technical adaptation	• The majority of Food MSMEs are interested in digital market • Some of them have participated in digital training provided by government, or digital providers, or academia • Some MSMEs used the digital in market • Reluctance to apply the digital application for transaction and • Refuse to use digital in business. Some reasons are MSMEs digital skills, high investment and staff requirement, and requires new business model	• Most MSMEs fashion sector were interested and have utilized digital application in transaction • A few of them applied digital business and production automation • Some MSMEs still reluctance to apply digital, partly due to skill and new business model requirement • Some believe digital market is risky to their product due to copyright issue, fraud, and fierce competition • Some of them trusted on physical contact in business transaction particularly for prime products and meeting unique customers demand
Digital financing	• The majority of the F&B MSMEs are combining cash payment and banking services such as transfer, debit and credit payment • A few of them are using digital payment or financing • Some of the traditional micro-firms only uses cash payment	• The majority of the fashion MSMEs are combining cash payment and banking services such as transfer, debit and credit payment. Meanwhile, • A few of them are using digital payment or financing • Some traditional micro-firms only uses cash payment
Government role	• The most frequent development programs received are training and exhibition • Some MSMEs have experienced other facilitation from the government, such as funding, production facilities, compliance assistance, competition, other promotion programs, and overseas benchmark and market search • Regulatory compliance is more complex • Protection of product copyright is needed	• The most frequent development programs received are training and exhibition. However, some MSMEs have experienced other facilitation from the government, such as funding and other promotion programs • No regulatory compliance issue arises • Protection of product copyright is needed

Food

All components of MSMEs ecosystem worked in different levels: (i) MSMEs digital market; companies are benefitting from their resellers’ capability to utilize digital technology for accessing the digital market. The critical issue in the food sector is market sustainability. Some companies manage these issues by developing their value propositions, such as competence to provide healthy and environmentally friendly products to their customers; (ii) Human capital; most companies indicate a moderate level of digital proficiency in terms of the human capital aspect. Meanwhile, high-level proficiency is only possessed by a small number of MSMEs. Few MSMEs hold average-level digital competence, and some MSMEs still possess a below-average level of digital skill; (iii) Innovation; most companies are still using conventional tools to create their product variances for addressing the conventional market. The production capability development relies more on their own initiatives, such as by participating in training, mentoring, or self-exploration; (iv) Socio-technical adaptation; many actors provided various supports (finance, technical consultants, etc.) in assisting MSMEs adaptation for going digital, generally companies are more convenience to have face to face communication and transaction, which is culturally more accepted; (v) Digital financing; majority of MSMEs are still using a combination of cash and banking service payment. Several firms can utilize modern digital payments, and a few of them left behind are still using cash only; and (vi) Government role; training and exhibitions become the two most frequent government programs in the food sector. Most companies received various supports, such as funding, production facilities, compliance assistance, competition, other promotion programs, and overseas benchmark and market search.

Fashion

Despite the generic picture as shown in Table 2, there were two cases (SR and SH) performed well functioning of MSMEs ecosystem components. The first case is SR company: (i) Company’s digital markets were done by resellers to connect with e-commerce platform. The company collaborates with fellow companies to determine price and quality standards in mutually offering the excess orders, especially to meet export market demands; (ii) Company’s human capital worked in translating knitted designs from paper to computers, the company relies on programmers who are hired weekly and are paid for each designs that was entered into the computer; (iii) Company’s innovation has done to meet market demand, company continues to engage in capability upgrading by using computerized machines. The sources of idea on production innovation came from various interaction, from exhibition visits to the discussions with fellow knitting entrepreneurs who wanted to produce standardized products and better production quality by using automatic machines; (iv) Company’s socio-technical adaptation attempted to maintain the loyalty of resellers by fulfilling their order and accommodating orders spillover from other knitwear companies with excess orders as well; (v) Company’s digital financing entirely relied on its own capital, company owner along with several other knitting MSMEs form a business group called “interest-free,” which means a business group that refuses bank’s interest; (vi) Government role was minimum, because the digital MSMEs ecosystem is already functioning well, even though the government holds training, not all MSMEs are interested in training.

The second case is the SH company: (i) Company’s digital market generally sold in large volumes to retailers started exploring sales through an e-commerce platform (Shopee). The products sold online are different (in terms of models and lower prices) from those sold directly in large volumes in highly competitive wholesale markets; (ii) Company’s human capital operated embroidery machines by skill-full operators; the operators received direct training inside the company. The designers were chosen because of their creativity and experience; (iii) Company’s innovation done to meet market demand, company carried out capacity upgrading of its embroidery machines to produce more products in larger quantities. Designers were required every day to produce new designs which, if approved by the owner, it will be used in production; (iv) Company’s socio-technical adaptation shifted from manual to automation embroidery works, by quick adaptation to automation technology using computerized embroidery machines, the company can produce large quantities of any embroidery pattern quickly and directly; (v) Company’s digital financing relied on self-financing to pay for production costs; (vi) Government role was minimum, because the digital MSMEs ecosystem components are already functioning well, the city government support only needs to promote the image of the MMESs to the visitors of embroidery center in the city.

Component of Digital MSMEs Ecosystem by Region

The component of digital MSMEs ecosystem by three regions: West Sumatra, West Java, and Yogyakarta are depicted in Table 3.

Table 3.

Component of digital MSMEs ecosystem by region

Ecosystem component	State of digitalization by region
	West Sumatra	West Java	Yogyakarta
Digital MSMEs market	• The majority of MSMEs has capacity to serve national markets, and a few of them deliver to international market through informal channel, such as personal network and government promotion program • To enter international market, MSMEs need to upgrade capability to meet international standard	• Most MSMEs has capacity to serve national market, whether they connected to digital or not • This region gains competitive support from its location, where many distribution points and wholesale markets located in this region	• Majority of MSMEs has local markets in their business • Digital application supports MSMEs to survive, stable or even increase their sales at local market
Human capital	• The majority of MSMEs possess moderate level of digitalization skill, some of them possess either high or average level of digital skill	• Most MSMEs has digital skill ranging from average to moderate level • Some of them has high-level digital skill	• Most MSMEs has digital skill ranging from average to moderate level • A few number of high digital skill • MSMEs with below-average level of digital skill slso exist
Innovation	• Most MSMEs has low level of innovativeness by creating simply product variances • A few of them able to improve their product features and quality, also production processes	• Majority of the MMSMEs has moderate level of innovativeness by improving their product features and/or quality, also production processes	• Half of the MSMEs has a low level of innovativeness by creating simply product variances • A few of them able to improve their product features and/or quality, and production processes
Socio-technical adaptation	• Majority MSMEs uses digital application in supporting their connection to market • A few MSMEs reluctance to learn digital • A few MSMEs in digital services also develop local digital application to connect producers (disable people) with customers	• Majority of MSMEs uses digital application to support their link to market • A few of them have utilize digital in production	• Some MSMEs are still reluctance to learn digital application • Some of them already uses digital application for marketing and also production
Digital financing	• Majority of MSMEs in West Sumatra are combining cash payment and banking services such as transfer, debit and credit payment • A few of them are using digital payment or financing. Some of the traditional micro-firms only use cash payment	• Majority of MSMEs uses cash payment and banking services such as transfer, debit and credit payment • A few of them are using digital payment or financing • Some of the traditional micro-firms only use cash payment	• Majority of the MSMEs uses combining cash payment and banking services such as transfer, debit and credit payment • A few of them are using digital payment or financing • Some of the traditional micro-firms only use cash payment
Government role	• Most frequent development programs received are training and exhibition • Some MSMEs have experienced other facilitation from the government, such as funding, promotion, and export market search	• Most frequent development programs received are training and exhibition • Some MSMEs have experienced another facilitation from the government, such as compliance assistance	• Most frequent development programs received are training and exhibition • Some MSMEs have experienced other facilitation from the government, such as funding, production facilities, compliance assist, competition, and overseas benchmark

The study highlights the important similarities and differences of ecosystem components in the three regions as follows: (i) Human capital; the majority of MSMEs in West Sumatra, already possess a moderate level of digital skill. Meanwhile, MSMEs digital skills range from average to moderate in West Java and Yogyakarta, and only a few highly skilled MSMEs of all three regions. In addition, below-average level digitalization skill MSMEs were identified in the Yogyakarta region; (ii) Digital financing; there are no substantial differences in the digital financing capabilities of MSMEs in the three regions. Furthermore, based on the case studies, some champions stand out among other MSMEs in every region; and (iii) Government role; training and exhibitions become the most frequent programs offered in all three regions in terms of government role. The important issue for MSMEs in West Sumatra is the continuity of government’s support to explore export market potential, due to difficulties in complying with buyers’ standards and requests, eventually, it did not continue. Meanwhile, government support programs in Yogyakarta tend to be more diverse, such as funding supports, procurement of production facilities, compliance assistance, competition, and overseas benchmarks.

Based on the regional characteristics, the digital MSMEs ecosystem component in three regions are (i) West Sumatra’s MSMEs demonstrate moderate level of socio technical adaptivity to digital application, they learn about digital technology from various sources including social media and digital platforms, business partners, local government, university staff, and partnerships with resellers. A few of them obtained digital assistance from the younger generation in their family by investing in digital websites. There was a platform of connecting disable producers with customers as a part of an inclusive digital economy; (ii) West Java’s MSMEs stand out for the relatively high level of innovativeness. They benefit from the existence and density of industrial clusters and the availability of digitally literate human resources in the region. West Java has a dynamic and advanced market (dynamic demand, large scale market), and support (technical) from technology suppliers has driven MSMEs to invest in the used digital machinery. It increases production and productivity, but there are some challenges reducing labor absorption, creating unique design products, exposing international competitors, and risky production due to component shortages; and (iii) Yogyakarta’s MSMEs demonstrate low level of socio technical adaptivity to digital application, they are generally thoughtful (the local term is “slow but sure”) to digitalize their business process for two reasons: (i) calculation of unsecured market demand after digitalization; (ii) social reluctance to digitalization sometimes influenced by the social habits of “nrimo.”

Discussion

Constraints of Putting the Digital MSMEs Ecosystem to Work

Viewed from the model of digital MSMEs ecosystem (Fig. 1), all components of MSMEs ecosystem have constraints to function to some degrees, in the following.

The component of digital MSMEs market has increased or at least make the market stable, while some MSMEs have moved up from local to national market players. In terms of human capital, there are some constraints: (i) Top management or MSMEs owner education and businesses core, higher education level which is in line with their business core make them to easily understand the business core values and capable of producing innovative products; (ii) MSMEs owner age has a relationship with digital literacy. The younger generations with higher digital skill are easier in adopting digital technology than the older one; (iii) The transfer of hereditary knowledge from the owners to their family businesses’ young generations. The successful MSMEs in digitalizing their business are usually handled by the second or third generation and employ the dedicated employees; and (iv) Supports for self-learning and exploration may also might bring unique skills, such as facilitating the market for specific products produced by disable people.

In terms of innovation, the critical roles of MSMEs collaborative partners are essential in the co-creation process, especially for product improvements that are made by order. The collaborative partners are vital to develop their own capabilities as well as support and mentor other smaller MSME capabilities. Collaboration also educate their stakeholders, such as resellers, suppliers, and partners, especially related to their product knowledge. Furthermore, viewed from socio-technical constraints, the social reluctances to use digital are related to the following: (i) social habits are more convenient to have physical transactions, (ii) fewer customers have access to digital, especially in the rural area, and (iii) the problems with digital literacy. Other constraints of embracing digital technology for MSMEs due to lack of work divisions among workers. Most of the businesses are self-employed businesses or have limited workers. Therefore, the work is usually unspecialized as one worker responsible for many job orders, therefore they do not have enough time to learn and implement digital technology. Moreover, digital financing provided a variety of facilities for digital finance transactions along with several financial support schemes for MSMEs. Then, two important issues arise in terms of government role among MSMEs: (i) the information accessibility and facility to participate in every government program for MSMEs, (ii) the digital security related to the protection of copyrights for MSMEs products.

Putting the Digital MSMEs Ecosystem to Work

As previously discussed, each components of digital MSMEs ecosystem have its constraints to bring the system functioned well. Viewed from the system principles, driving the positive feedback loops (Fig. 1) by easing the main constraints are the leverage points to put the whole system to work (Meadows, 1999). Putting the digital MSMEs ecosystem to work needs to ease three main constraints on (i) human capital in digital talent, (ii) socio-technical adaptation, and (iii) government support.

First, Building the MSMEs Human Capital in Digital Talent

In the long run, it is part of preparing Indonesia’s digital talent, which related to (i) education sector especially vocational education, as the place of preparing the digital talent, (ii) government role to provide education, training, and programs of digital talent for all people by maintaining equality and equal rights to get opportunities, (iii) professional organizations as the place for talent professionals to carry out the duties of trust and responsibility in digital era, and (iv) business and industry sector, including MSMEs, where digital talent get remuneration and rewards for their competency (Wantiknas, 2020b).

In the short run, the increase of human resources capacity through training for MMSEs is acquired by sharing knowledge, skills, and experiences in digital talent. The success of the training for MSMEs in digital talent is determined by four factors: (i) Age, education, and former experience employees in digital become a good foundation for digital MSMEs; (ii) Owners good entrepreneurial skill is influential, especially in elevating MSMEs up to higher class in either national and global business; (iii) MSMEs that actively pursue attending the talent development programs tend to speed up capability acquisitions; and (iv) An effective and specialized work division on digital is essential to make employees more focused on managing and operating digital technology.

Second, Accelerating Socio-Technical Adaptation to Digital Application

Digital MSME activities in e-commerce and e-business are essentially sharing economy by collaborative partners through digital applications. The MSMEs acceptance of using the digital application is socially determined by people trusting digital applications to work collaboratively in the digital economy. Building mutual trust for collaboration at the organizational level is a long process, not to mention at the societal level is time-consuming (Ansell and Gash, 2007). Managing socio-technical transition from conventional to digital regimes is a long way process (Geels, 2004), the viable step is the acceleration of socio-technical adaptation to new business environment in digital MSMEs ecosystem, where collaborative governance or management of collaboration has important role (Ansell & Gash, 2007).

There are three important factors affecting socio-technical adaptation to digital application: time, trust, and interdependence (Ansell & Gash, 2007). MSMEs need to apply two solutions: (i) Driving collaborative management and operation need to focus on the group of MSMEs at firms level, which the members of groups are ready to cooperate digitally in sharing economy. This solution is learning from the successful cases of adapting to digital application by companies SR and SH (findings by sectors). Intervention support for MSME firms who are not ready for collaborative operation is a time-consuming process for trust-building. The time necessary for trust building is likely to increase for the more the unreadiness MSMEs in the process, the solution is in the following step. (ii) Institutional nurturing on collaborative management and operation for the MSMEs center in the regions of low readiness for collaboration, for example, Batik MSMEs center in Yogyakarta region, textile and apparel MSMEs center in Bukittinggi, West Sumatra region.

The institutional nurturing by government support for the two aforementioned regions needs to consider the possible reluctance from social environment in the each regions. The government supports for the collaborative management and operation need to be implemented by two stages as follows: (i) The key of collaboration is trust-building to digital and the awareness of MSME owners on interdependence. We found in West Sumatra’s cases that individual competition among MSMEs related to still low trust for cooperation. However, they could work collaboratively if the MSMEs were interdependent by family and ethnic clan relationships. (ii) Interdependence fosters the willingness to participate in meaningful collaboration. We found in Yogyakarta’s case that it would be faster to build trust under the societal culture with strong in-group solidarity or interdependence. Both in West Sumatra and Yogyakarta, MSMEs’ actors who enter into a collaborative process at the beginning may not perceive themselves to be interdependent. However, through facilitating dialog and engagement by the government role, the intermediate outcome of MSMEs adaptation to the digital application could be achieved in stages.

Third, Sustainability of Existing Government Support for MSMEs Going Digital

The sustainability of the existing program needs to be continued to create an inclusive digital economy that includes urban and rural areas, all sectors, and all actors of MSMEs. The existing government programs for MSMEs going digital has been implemented  by several related agencies, such as: (i) procurement expenditure platform for MSMEs initiated by the Ministry of SOEs (state-own enterprises), (ii) e-catalog portal (MSMEs page) to support MSMEs digital businesses operation provided by the ministry of cooperative and MSMEs, (iii) banking support for MSMEs going online through the marketplace (Indonesian Mall) and online market (Web market BRI) provided by BRI (Bank of Indonesian People) (Deloitte, 2021).

Viewed from a program provider, there are four types of programs provided by the government that should be maintained its continuity for the acceleration of SMEs digitalization: (i) the development of marketplace and application to support MSMEs market expansion as well as the data center to ensure that the customer is the focus of digital market expansion; (ii) training and mentoring to increase the digital capacity of MSMEs, by which MSMEs’ digital capacity could offer coherence across online and offline channels; (iii) collaboration with other parties to provide easy access and services for MSMEs through leveraging big data to improve real-time decisions across MSMEs value chain; and (iv) improving digital infrastructure and facilities, especially on cybersecurity, to protect the information capital of MSMEs in a connected world (Das et al., 2016).

Conclusion

This study concludes that the interactive components of digital MSMES ecosystem for inclusive digital economy, more specifically the ways of putting the digital MSMEs ecosystem to work, are for accelerating the MSMEs digitalization in Indonesia. The multiple case studies’ findings and discussion supported the novelty of digital MSMEs ecosystem model. The novel model of the digital MSMEs ecosystem was formulated as the surrounding interactive components of ecosystem, enabling digital MSMEs to realize and accelerate toward the digital economy in Indonesia. Putting the model to work is creating a digital MSMEs market as the main objective, through continuously positive feedback interaction between six components, controlled by the regular government role.

The multiple case studies found that all components of MSMEs ecosystem have constraints to function to some degrees. There are three main constraints of digital MSMEs ecosystem to work: (i) human capital in digital talent, (ii) socio-technical adaptation, and (iii) government support. Putting the digital MSMEs ecosystem to work needs three ecosystem resolutions:

• First, building the MSMEs human capital in digital talent should strengthen (i) owner’s basic skill for digital MSMEs; (ii) owner’s entrepreneurial skill for managing digital MSMEs; (iii) MSMEs proactive attending the talent development programs; (iv) MSMEs labor’s work division on digital.

• Second, acceleration of socio-technical adaptation to the digital application by (i) driving collaborative management and operation should focus on the group of MSMEs at firms level, which the members of groups are ready to cooperate digitally in sharing economy; and (ii) institutional nurturing on collaborative management and operation for the MSMEs center in the regions of low readiness for collaboration.

• Third, the sustainability of existing government support for MSMEs going digital needs to be continued to create an inclusive digital economy that includes urban and rural areas, in all sectors, and for all actors of MSMEs. New programs on aforementioned human capital in digital talent and socio-technical adaptation should be implemented and maintained their continuity for the acceleration of SMEs digitalization.

Scientific and practical contributions of this study are the following: (i) The model of digital MSMEs ecosystem viewed from policy perspective enriched the existing ecosystem models in literature. (ii) In putting the model to work, this study recommends the implementation of three digital MSMEs ecosystem resolutions by considering sectoral and regional characteristics in practices.

Appendix

Appendix Table 4.

Profile of MSMEs digitalization in West Sumatra

Firm	Commodity	Product	Worker	Market	State of digitalization
ZS	Fashion	Handmade embroidery garment	15 workers, sub-contract (max 10 workers)	Local, Indonesia and international	Conventional (through exhibitions and workshop, using social media for communication only)
BM	Food	Food ingredients	3 workers, temporary workers (max 6 persons), reseller	Local, Indonesia, International	E-commerce (communication through social media, and resellers)
TL	Fashion	Handmade batik clothes	20 workers (now 3 workers at workshop, work from home), dedicated digital staff	Local, Indonesia (Jakarta)	E-commerce (through website), conventional (shop)
AF	Furniture	Home and office furniture	13 workers, digital staff (owner)	Local, neighborhood province	E-commerce (through social media and website), e-business (interior design software and administration software)
DC	Food	Culinary (daily bread and cakes)	6 workers, dedicated digital staff	Local, Indonesia	E-commerce (through social media and website)
KM	Fashion	Handmade embroidery clothes	Around 10 workers, sub-contract resellers	Local, Indonesia, international	Conventional (shop & exhibitions), e-commerce (through social media & reseller)
LE	Food	Culinary (daily bread and cake)	3 workers (family)	local	Conventional (shop & individual marketer)
CH	Food	Dried traditional food & food ingredients	20 workers, more than 10 SMEs partners resellers	Local, Indonesia	E-commerce (social media, marketplace, resellers) and conventional (shops)
KE	Food	Organic fresh product, cookies and processed food	A group of disable workers	Local	E-commerce (website), marketplace

Appendix Table 5.

Profile of MSMEs digitalization in West Java

Firm	Commodity	Product	Worker	Market	State of digitalization
SR	Fashion	Knitwear products	11 worker including 2 owners, 1 operator, 1 QC; and 1 programmer, 7 technicians	National (wholesale market and large shopping centers) in Java (mostly)	Early e-business (automation in production), e-commerce (mobile communication, online messager, and on-line platform by reseller)
SO	Fashion	Men’s shoes, shoe repair service, customized shoe	7 workers including 4 owners, 3 workers, and outsourcing craftsmen	National in West Java (mostly) and Sulawesi	Manual production, conventional marketing (physical stores), e-commerce (on-line platforms since COVID-19
KB	Fashion & Craft	Wicker crafts, e.g. hats, bags, hamper	Self employee by owner outsourcing to craftsmen	National market (retail and wholesale)	Conventional marketing, (unfamiliar with social media, reluctance to learn)
RC	Fashion	Hijab products	43 people including 3 owners, 10 tailors, and 30 sequins tailors	National market (retail and wholesale)	Manual production (sewing process), e-commerce (social media and online platform since COVID-19)
SH	Fashion	Embroidery and non-embroidery garments, muslimwear	220 workers, including 200 tailors, 16 operators, dan 2 designers, 2 IT staff	National (wholesale market), International market (Malaysia)	Manual production (non-embroidery), early digitalization/ automation (embroidery), e-commerce (online platform for non-embroidery)
OS	Fashion	Shoes, sandals	Self employee by 2 owners and its family	National (wholesale and retail markets)	Conventional marketing (direct sales), e-commerce (social media and on-line platform since COVID-19)
MT	Fashion	Prayer robes	Self employed collaborate with craftsmen	National (wholesale purchase only)	E-commerce (own website), e-business (data analytic for business analysis)
WK	Food	Fresh and processed organic products	Self employed collaborate with organic farmers	Regional (fresh products), national (processed product)	E-commerce (social messaging platform, e-commerce platforms)

Appendix Table 6.

Profile of MSMEs digitalization in Yogyakarta

Firm	Commodity	Product	Worker	Market	State of digitalization
GJ	Food	Functional food (edible and medicinal mushrooms)	31 workers including 1 owner	National ((mostly Java) as the largest chunk)	E-commerce, digital marketing through B-to-B channels (restaurant, catering, hotel, and retailer)
BS	Food	Traditional snack (Bakpia)	15 workers including 2 owners	Regional (Yogyakarta province)	E-commerce, mix off line with on-line marketing (social media and e-online platforms, e.g., Sibakul)
LH	Craft	Leather wallet, leather key chain, and accessories	3 workers including 1 owner and 2 worker	Local (Yogyakarta city)	Conventional marketing (disability community networks and local retailers)
SK	Craft	Tailor-made wooden craft	8 workers including 1 owner	Local Yogyakarta city)	Conventional marketing (B-to-B through cooperative and association), use Whatsapp for communicating with clients
IP	Food	Traditional fish dishes (dine-in and canned)	Self employee by the 1 owner	Local Yogyakarta city)	Conventional marketing (B-to-B through consignment with restaurant)
KS	Food	Traditional cassava cracker	Self employee by owners with heredity	Local Yogyakarta city	Conventional marketing (B-to-B with traditional retailers)
SP	Food	Instant cereal	Worker 82 including 1 owner	National (meet demand up to 1 million packs per annum)	E-commerce (digital marketing in distributors and resellers), mix online-offline in B-to-B channels to meet variety of customers
BL	Food	Traditional jack fruit dish	16 workers including owners with heredity	National (mostly Java)	E-commerce (digital marketing handled by distributors and resellers), the company focus on production, offline sales
BB	Fashion	Batik garment and textile cloth	18 workers including 1 owner	International (Japan and UAE),national market	E-commerce (digital marketing mostly social media and online platform such as Sibakul)

Appendix Fig. 2.

Iteration process of model construction

Author Contribution

Erman Aminullah is a Research Professor at the Economic Research Center (P2E), the Indonesian Institute of Sciences (LIPI), Jakarta. He is an Associate Editor in Chief (for Southeast Asia) of Asian Journal of Technology Innovation. Trina Fizzanty is a Senior Researcher at the Economic Research Center (P2E), the Indonesian Institute of Sciences (LIPI), Jakarta. Nawawi Nawawi is a Senior Researcher at the Research Center for Population Studies (P2K), the Indonesian Institute of Sciences (LIPI), Jakarta. Joko Suryanto is a Senior Researcher at the Economic Research Center (P2E), the Indonesian Institute of Sciences (LIPI), Jakarta. Nika Pranata is a Researcher at the Economic Research Center (P2E), the Indonesian Institute of Sciences (LIPI), Jakarta. Ikbal Maulana is a Senior Researcher at the Research Center for Culture and Society, the Indonesian Institute of Sciences (LIPI), Jakarta. Lutfina Ariyani is a Researcher at Center for STI policy and management (RC-STIPM), the Indonesian Institute of Sciences (LIPI), Jakarta. Adityo Wicaksono is a Researcher at Center for STI policy and management (RC-STIPM), the Indonesian Institute of Sciences (LIPI), Jakarta. Ikval Suardi is a Researcher at the Economic Research Center (P2E), the Indonesian Institute of Sciences (LIPI), Jakarta. Nyimas Latifah Letti Azis is a Senior Researcher at the Research Center for Political Studies (P2P), the Indonesian Institute of Sciences (LIPI), Jakarta. Aisah Putri Budiatri is a Researcher at the Research Center for Political Studies (P2P), the Indonesian Institute of Sciences (LIPI), Jakarta. All authors had equal contribution and had final responsibility for the publication.

Funding

The study was financed by the research grant of Fund Management Institute for Education (LPDP) as stipulated by the LPDP director decree No. 32/KEP/2020 for the research project on Developing the model of digital economy ecosystem for SMEs in Indonesia and for this supports, authors express gratitude.

Declarations

Conflict of Interest

The authors declare no competing interests.