The Role of Technology Based Business Models in Enhancing the Competitiveness of MSMEs

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a strategic role in supporting the national economy through their contribution to employment and Gross Domestic Product growth. However, the increasingly competitive market dynamics due to the development of digital technology require MSMEs to adapt their business models more progressively. This study aims to analyze the role of technology-based business models in enhancing the competitiveness of MSMEs, particularly through increased operational efficiency, market expansion, and strengthened customer service quality. Digitalization is understood not only as the use of technological devices, but as a comprehensive transformation that includes the integration of production processes, marketing, customer service, and internal business management.

The results of the study show that the use of technologies such as digital recording systems, cloud-based inventory management, Customer Relationship Management (CRM), and e-commerce platforms can improve operational efficiency, accelerate workflow, and support data-driven decision making. In addition, the use of digital marketing strategies through social media and marketplaces has been proven to expand market reach and increase the visibility of MSME products. These findings are reinforced by various studies that state that digitization has a positive impact on increasing sales volume, customer interaction, and the ability of MSMEs to understand consumer preferences in real time.

However, structural challenges such as low digital literacy, limited technological infrastructure, and lack of access to training remain major obstacles for some MSMEs in optimizing their digital business models. Therefore, the success of digital transformation is highly dependent on the support of a conducive ecosystem, including government policies, the role of academics, industry players, and business communities in providing access to technology and sustainable assistance.

Overall, this study concludes that technology-based business models contribute significantly to strengthening the competitiveness and resilience of MSMEs in the digital economy era. Digitalization is not only an operational support element, but has become a key strategy for MSMEs to survive and thrive in an increasingly competitive global market