Analysis of Technology Capability and Innovation in Influencing the Business Performance of PT. Bertumbuh Cipta Karya's Partners Mediated by Digital Transformation

Niken Pradita Putri; Fery Setiawan; Setyo Adjie

doi:10.63922/ijebir.v5i05.5391

Niken Pradita Putri Fakultas Ekonomi Universitas Muhammadiyah Ponorogo
Fery Setiawan Fakultas Ekonomi Universitas Muhammadiyah Ponorogo
Setyo Adjie Fakultas Ekonomi Universitas Muhammadiyah Ponorogo

DOI: https://doi.org/10.63922/ijebir.v5i05.5391

Keywords: Business Performance, Digital Transformation, Innovation, Technology Capability, MSMEs.

Abstract

Digital transformation is a strategic factor in increasing the competitiveness of MSMEs, but its success is influenced by the technological capabilities and innovation possessed by business actors. This study aims to analyze the influence of technological capability and innovation on business performance with digital transformation as a mediating variable in partner businesses of PT. Bertumbuh Cipta Karya. The study used a quantitative approach with an explanatory research type. The study population consisted of 50 active partner businesses and all were sampled using a total sampling technique. Data were collected through a five-point Likert scale questionnaire and analyzed using Structural Equation Modeling Partial Least Squares (SEM-PLS) with SmartPLS. The results showed that technological capability and innovation had a positive and significant effect on digital transformation. Technology capability also had a positive and significant effect on business performance, while innovation did not have a significant direct effect on business performance. Digital transformation had a positive and significant effect on business performance and mediated the relationship between technology capability and innovation on business performance. This study concluded that digital transformation is the main mechanism that transforms technological capabilities and innovation into improved business performance, so strengthening digital transformation is an important strategy in increasing the competitiveness of MSMEs.

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