Analysis of the Influence of Barriers on the Digitalization Readiness of MSMEs in Dadapayam Village

Abstract

 This study aims to analyze the influence of internal and external barriers on the digitalization readiness of MSMEs in Dadapayam Village. Internal barriers include financial limitations, lack of digital skills, unsupportive organizational culture, and lack of digital leadership. Meanwhile, external barriers encompass limited technology infrastructure, lack of access to technology, cybersecurity issues, and minimal government support. This research employs a qualitative approach using multiple linear regression methods, based on data from 79 MSME respondents collected through a questionnaire. The analysis results indicate that, partially, internal barriers do not have a significant effect on the digitalization readiness of MSMEs. However, external barriers have been shown to have a significant partial effect. Simultaneously, both internal and external barriers together have a significant influence on the digitalization readiness of MSMEs. These findings contribute to enriching the literature on the digitalization of rural MSMEs and serve as a basis for formulating policies for empowering MSMEs that remain responsive to traditional conditions.