Empowering Coastal SMEs: A Digital Transformation Model to Enhance Competitiveness and Sustainability

Abstract

As the largest archipelagic nation, Indonesia has vast coastal regions with significant economic potential from fisheries and marine tourism. However, coastal SMEs face major challenges in fully utilising this potential, including an over-reliance on marine resources, low digital literacy, and limited access to capital and markets. These factors not only hinder innovation but also make coastal SMEs vulnerable to market fluctuations and environmental changes. This research seeks to identify these challenges, develop a digital-based empowerment model, and evaluate its effectiveness in enhancing SME competitiveness. A significant gap exists between the economic potential of coastal regions and SMEs' ability to fully harness available resources, especially in the context of digital transformation. The research explores which empowerment models can strengthen SME development and how these can be implemented effectively. Using a qualitative case study in Segarajaya, Bekasi, the research collected data through observations, interviews, training, and monitoring. The findings indicate that a digital-based empowerment model-incorporating digital literacy training, product innovation, and improved market access-can significantly enhance SME capabilities. The Coastal SME Digitalisation Centre has been effective as a hub for training, providing technological support and ongoing mentorship. Despite these achievements, inadequate digital infrastructure remains a barrier, and consistent government support is crucial to ensure long-term progress. The participants reported increased sales and improved business management post-training. This study contributes to the literature by integrating the knowledge-based view (KBV) with a sustainable digital development approach and proposing an empowerment model combining digital technology, product innovation, and community-based strategies.