BUILDING MSME COMPETITIVENESS ADVANTAGES THROUGH CAPACITY BUILDING OF BUSINESS MODEL INNOVATION

Business model innovation is one of the main activities that need to be continuously carried out in companies to maintain competitiveness in today's digital economy. Although research on business models has increased since the 1990s, little is still known about the practice of business model innovation in Small Micro and Medium Enterprises (MSMEs) in Indonesia. This study addresses these research gaps and focuses on investigating the triggers and outcomes of business model innovation in MSMEs. The partial least squares path modeling (PLS-PM) method was used to empirically test the model using data collected in 2021 from 75 MSMEs in Indonesia. The results show that the level of innovation of MSMEs has a positive impact on business model innovation. Incontrast, the business environment and information technology do not have a direct effect on the level of business model innovation. In addition, the results show that the Level of Business Model Innovation has a positive influence on the Business Model Innovation Resultsand subsequently on the overall business Performance. The results of this study contribute to knowledge in the field of MSME business model innovation and offer useful insights for MSMEs who intend to innovate on their business models.