Digital Technology Adoption and Business Growth in Indonesian MSMEs Using PLS-SEM

The global business landscape has been profoundly reshaped by digital transformation, particularly impacting Micro, Small, and Medium Enterprises (MSMEs) which are crucial for economic growth. This study investigates the critical role of digital technology adoption, specifically focusing on social media marketing, e-commerce platforms, and digital payment systems, in driving business growth and enhancing competitiveness among Indonesian MSMEs. Utilizing a quantitative research methodology, data were collected through questionnaires from 300 MSME respondents and analyzed rigorously using the Partial Least Squares Structural Equation Modeling (PLS-SEM) framework. The empirical findings robustly demonstrate that social media marketing, e-commerce, and digital payment systems each exert a significant positive influence on MSME business growth. Statistical analysis confirmed this impact, with social media marketing (p-value = 0.000), e-commerce (p-value = 0.003), and digital payment systems (p-value = 0.001) all showing highly significant relationships. These results highlight how the strategic integration of digital technologies empowers MSMEs to optimize operational efficiency, drastically expand market reach, and foster innovative consumer engagement strategies, making them more adaptable to rapidly evolving market dynamics. In conclusion, the findings underscore that embracing and effectively leveraging these digital tools are indispensable for Indonesian MSMEs to achieve sustainable economic development and maintain a strong competitive edge in the contemporary Industry 4.0 business environment.