The Role of Digitalization in Supporting Micro, Small andMedium Enterprises in the Digital Economy Era

Abstract

 The development of digital technology has brought significant transformation in the economic sector, including for Micro, Small, and Medium Enterprises (MSMEs). In the era of the digital economy, digitalization is the key to increasing the competitiveness, productivity, and sustainability of MSMEs. This literature study aims to examine the role of digitalization in supporting MSMEs, including opportunities, challenges, and necessary policies. The results of the study show that the use of e-commerce, social media, and other digital tools allows MSMEs to expand their markets, increase operational efficiency, and optimize business management. However, challenges such as limited knowledge, infrastructure, capital, and digital security are still major obstacles. Collaboration between the government, private sector, and society is needed to create an inclusive digital ecosystem through training, funding, and supportive policies. With the adoption of the right technology, MSMEs can not only survive but also grow and contribute more to the economy. This study provides recommendations to strengthen the digital transformation of MSMEs in a sustainable manner