When Small Businesses Go Digital: Exploring Innovation and Insecurity in Urban Micro MSMEs

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in Indonesia’s economy but face major challenges in adopting technology. Despite its potential to improve competitiveness, especially in today’s digital era, Indonesia’s Information and Communication Technology (ICT) index remains relatively low. This study proposes a new model that combines Innovation, Insecurity, and the Technology Acceptance Model (TAM) to better understand the technology adoption process among micro-MSMEs. The research includes variables such as Perceived Usefulness, Perceived Ease of Use, Attitude, Behavioral Intention, Actual Use, Innovation, and Insecurity. Data were collected using a Likert-scale questionnaire, which underwent face validity, construct validity, and reliability testing. The analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine relationships between variables. The findings indicate that the proposed model is well-supported and positively influences the adoption process. Most relationships among variables are strong and positive, except for Insecurity, which shows a negative relationship.