Building Digital Literacy Through Technology Adoption: Evidence from MSMEs in the Digital Era

Candra Surya; Ganefri Ganefri; Asmar Yulastri; Yuliana Yuliana

doi:10.35445/alishlah.v18i1.9209

Building Digital Literacy Through Technology Adoption: Evidence from MSMEs in the Digital Era

Candra Surya, Ganefri Ganefri, Asmar Yulastri, Yuliana Yuliana

Abstract

In the digital era, information technology adoption has become a strategic factor in improving the performance of Micro, Small, and Medium Enterprises (MSMEs). Nevertheless, many MSMEs fail to fully benefit from digital technologies due to limited digital literacy, reflecting an education-related gap between technology utilization and human capacity development. This study aims to analyze the effect of information technology adoption on MSME performance, with digital literacy serving as a mediating variable that represents learning and skill development processes. A quantitative research design was employed using a survey of 330 MSME owners and managers across various business sectors. Data were analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). Instrument validity and reliability were established through convergent validity, discriminant validity, and composite reliability tests. The results indicate that information technology adoption has a positive and significant effect on digital literacy and MSME performance (β > 0). Furthermore, digital literacy partially mediates the relationship between technology adoption and performance, while the model demonstrates moderate explanatory power as indicated by R² values. This study contributes to education scholarship by positioning digital literacy as a mediating learning construct in MSME performance research. Practically, the findings highlight the importance of designing targeted digital training, literacy programs, and curriculum development for MSME capacity building to support sustainable economic growth.

Keywords

digital competence; workplace learning; adult education; entrepreneurship education; capacity building

Full Text:

PDF

References

Adelia, Meisyanda, Rachma Putri, Maida Amalia Nurhaliza R, Moch Zaki, Cayvan Susilo, Muhammad Alief, Fatkhur Rahman, Angga Rafael, Cristian Tambun, Achmad Aufa Adzar, and Muhammad Fajar Wahyudi. 2024. “Digital Capability and Literacy for MSME Transformation: Perspectives of Digital and Business Performance.” APMBA (Asia Pacific Management and Business Application) 13(2):109–28. doi:10.21776/UB.APMBA.2024.013.02.2.

Adelia, Meisyanda, Rachma Putri, Maida Amalia Nurhaliza R, Moch Zaki, Cayvan Susilo, Muhammad Alief, Fatkhur Rahman, Angga Rafael, Cristian Tambun, Achmad Aufa Adzar, and Muhammad Fajar Wahyudi. 2025a. “Empowering MSMEs in The Digital Era: A Systematic Literature Review on The Role of Digital Literacy.” Greenation International Journal of Economics and Accounting 3(2):185–96. doi:10.38035/GIJEA.V3I2.385.

Adelia, Meisyanda, Rachma Putri, Maida Amalia Nurhaliza R, Moch Zaki, Cayvan Susilo, Muhammad Alief, Fatkhur Rahman, Angga Rafael, Cristian Tambun, Achmad Aufa Adzar, and Muhammad Fajar Wahyudi. 2025b. “The Effect of Digital Literacy and Technology Use on the Performance of Micro, Small and Medium Enterprises (MSMEs).” International Conference on Digital Business Innovation and Technology Management (ICONBIT) 1(2). https://proceeding.unesa.ac.id/index.php/iconbit/article/view/5570.

Boikanyo, Dinko Herman. 2024. “Adaptive Leadership in Times of Organizational Change Driven by Digital Technologies.” Contemporary Perpectives on Organizational Behaviour 1–23. doi:10.5772/INTECHOPEN.1007826.

Chughtai, Muhammad Salman, Fauzia Syed, Saima Naseer, and Nuria Chinchilla. 2023. “Role of Adaptive Leadership in Learning Organizations to Boost Organizational Innovations with Change Self-Efficacy.” Current Psychology 1. doi:10.1007/s12144-023-04669-z.

Hapsari, Ira, Weni- Novandari, Tri Yuwono, and Tiara Pandansari. 2025. “BRIDGING THE DIGITAL GAP: THE EFFECT OF DIGITAL TECHNOLOGY ADOPTION ON MSMES PERFORMANCE WITH DIGITAL MARKETING CAPABILITY AS A MEDIATOR.” The International Conference on Sustainable Economics Management and Accounting Proceeding 1:2527–37. doi:10.32424/ICSEMA.1.1.77.

Iskandar, Yusuf, Heliani Heliani, Ujang Badru Jaman, and Andri Ardhiyansyah. 2023. “Analyzing the Relationship Between Technology Adoption and Business Performance in the Digital Age in SMEs in Indonesia.” Eastasouth Proceeding of Nature, Science, and Technology 1(01):43–53. doi:10.58812/ASST.V1I01.6.

Nurcaya, I. Nyoman, I. Ketut Rahyuda, Gusti Ayu Ketut Giantari, and Ni Wayan Ekawati. 2022. “The Effect of Information Technology on The Performance of MSMEs During the Covid-19 Pandemic.” International Journal of Social Science and Business 6(2):262–67. doi:10.23887/IJSSB.V6I2.44260.

Parra-Sánchez, Diana Teresa, and Leonardo Hernán Talero-Sarmiento. 2024. “Digital Transformation in Small and Medium Enterprises: A Scientometric Analysis.” Digital Transformation and Society 3(3):257–76. doi:10.1108/DTS-06-2023-0048.

Permana, Indra, Bagus Hari Sugiharto, Soni Suardi, Eri Mardiani, and Iwan Riswandi. 2024. “Business Sustainability Challenges in the Face of Technology and Digital Literacy: A Study of Micro, Small, and Medium Enterprises.” International Journal on Social Science, Economics and Art 13(4):223–33. https://ijosea.isha.or.id/index.php/ijosea/article/view/434.

Rajan. 2025. “Philosophy of Technology for the Lost Age of Freedom: A Critical Treatise on Human Essence and Uncertain Future.” AI and Society 40(3):1705–22. doi:10.1007/S00146-024-01942-Y.

Soomro, R. B., Memon, S. G., Dahri, N. A., Al-Rahmi, W. M., Aldriwish, K., Salameh, A. A., Al-Adwan, A. S., & Saleem, A. (2024). The adoption of digital technologies by small and medium-sized enterprises for sustainability and value creation in Pakistan: The application of a two-staged hybrid SEM-ANN approach. Sustainability, 16(17), 7351

Tegegne, Alemu K., and Tamir A. Alemu. 2018. “Educational Data Mining for Students’ Academic Performance Analysis in Selected Ethiopian Universities.” 1–15.

Umar, Fadhil, M. Rivaldi, Ali Septian, Dwika Ananda, and Agustina Pertiwi. 2024. “The Effect of Digitalization on Business Performance in the MSME Industry Context.” Journal of Information System Exploration and Research 2(1):1–10. doi:10.52465/JOISER.V2I1.199.

Usamah Mat, Norlida Buniyamin, and Pauziah Mohd Arshad. 2016. “Educational Data Mining Classifier for Semester One Performance to Improve Engineering Students Achievement.” Middle-East Journal of Scientific Research 24(2):338–46. doi:10.5829/idosi.mejsr.2016.24.02.23023.

Yap, Vincent Grace S., and Toni Rose T. Fabroa. 2025. “The Effect of Digital Technology on Micro Small Medium Enterprises’ Business Performance.” Journal of Economics, Management and Trade 31(9):14–21. doi:10.9734/JEMT/2025/V31I91347.

Zhang, J., Zhao, J., Yu, C. H., & Lee, C. C. (2025). Driving corporate innovation through digital transformation: Evidence from China. International Review of Economics and Finance, 104, 104649. doi:10.1016/j.iref.2025.104649.

DOI: https://doi.org/10.35445/alishlah.v18i1.9209