SMES’ Resilience through Velocity of ICT: The Role of Workforce Agility and Performance
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Abstract
Research Aims: This study aims to investigate the empirical gap in understanding how workforce readiness in ICT influences the success of digital adoption and its subsequent impact on SME sustainability within the context of digital transformation.
Design/methodology/approach: The research employs a quantitative explanatory approach. Data were collected from 400 SME entrepreneurs in Tangerang, Indonesia, using an online questionnaire with a five-point Likert scale. The study utilized a purposive sampling technique and analysed the data using Structural Equation Modelling (SEM) with the LISREL application. The analysis included validity and reliability tests, confirmatory factor analysis (CFA), and path analysis to test the hypothesized relationships.
Research Findings: The findings indicate that ICT Adoption has a significant positive effect on both Workforce Agility and SME Performance. Furthermore, ICT Literacy has a significant positive effect on Workforce Agility, but its direct effect on SME Performance is not significant. In addition, Contrary to expectations, Workforce Agility does not have a significant direct effect on SME Performance. This suggests that while ICT skills (literacy) and the actual use of technology (adoption) make the workforce more agile, and adoption directly boosts performance, workforce agility itself may not be a direct driver of performance in the SME context. Other factors, such as entrepreneurial leadership and innovation capability, may be more critical.
Theoretical Contribution/Originality: This research provides originality by empirically testing the mediating role of Workforce Agility in the relationship between ICT capabilities (both literacy and adoption) and SME performance, area with limited prior empirical study. It contributes to theory by revealing the nuanced relationships between these variables, specifically that ICT Literacy's impact on performance is fully mediated by other factors, and that the presumed direct link between Workforce Agility and performance in SMEs may not hold, suggesting a need to reconceptualize agility's role in this specific business context. The study offers a validated model and insights crucial for developing strategies to enhance the competitiveness and sustainability of SMEs in a digital economy.
Keywords: SME Performance, ICT Adoption, ICT Literacy, Workforce Agility, Digital Transformation, Indonesian SMEs, Structural Equation Modelling
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