MSME Digital Transformation: Efficiency, Market Expansion, and Innovation

Abstract

Digital transformation has become one of the key factors in strengthening the competitiveness of Micro, Small, and Medium Enterprises (MSMEs) in the modern economic era. This research aims to examine the role of digital technology, especially the Internet of Things (IoT), e-commerce, big data, and financial technology (fintech), in encouraging operational efficiency, market expansion, and business innovation of MSMEs in developing countries. The research method used is Systematic Literature Review (SLR) on academic publications in the last five years, with a focus on empirical and conceptual studies related to the digitalization of MSMEs. The results of the analysis show that the application of digital technology can reduce logistics costs, increase productivity, and speed up the decision-making process. In addition, e-commerce and social media platforms have proven to open MSMEs access to national and global markets, while the integration of big data and fintech plays a role in creating innovative business models and providing inclusive financing solutions. This research confirms that collaborative support between the government, the private sector, and educational institutions is needed to ensure the success of MSME digital transformation.