European Journal of Molecular & Clinical Medicine

Abstract

SME development is an important pillar of regional integration efforts. Micro, small and medium-sized enterprises represent around 97 to 99% of the enterprise population in most ASEAN countries. In Indonesia, small and medium-sized enterprises made up 99.99% of total businesses and employ 97% of the workforce. Based on data from small and medium-sized enterprises that are already using the internet in Indonesia, the use of e-commerce is still between 9 and 15%. One of the innovation types was frugal innovation, which can be defined as products, services, or solutions that arise regardless of financial, human, technological or other resource constraints, and where the end result is cheaper than competitive offers and meets the needs of customers who have not yet been served otherwise. The objective of this research is to investigate the impact of digital business adoption, frugal innovation, and organizational innovation on firm performance. The study was conducted using a descriptive quantitative method in Indonesia. A structured research questionnaire was developed using a Likert scale-four. Data from a total of 100 returned questionnaires was analysed with SEM-PLS. The results of this research show how the performance of small and medium-sized enterprises (SMEs) is affected by digital business adoption, frugal innovation and organisational innovation.