From Survival to Growth: Digital Strategies for Micro and Small Enterprises

ABSTRACT This study investigates the critical factors influencing Digital Transformation (DT) in micro, small, and medium enterprises (MSMEs) within the post‐pandemic context. Data were collected through an online survey of 341 respondents and analyzed using Partial Least Square Structural Equation Modeling (PLS‐SEM). The results indicate that Information System (IS) capacity, competitive pressure, and government support significantly contribute to DT, while perceived benefits and complexity have weaker effects. The findings also reveal that the influence of these factors varies by enterprise size: micro‐enterprises rely on external pressures and technological capabilities, small businesses depend on internal management support and Information System Capacity (ISC), and medium enterprises require further exploration of alternative drivers. This study addresses gaps in existing research by exploring DT in a unique socio‐economic setting and contributes to the literature on MSME resilience and competitiveness. Limitations include the use of convenience sampling and a focus on a single geographic context. Practical implications include recommendations for tailored policies, skill development initiatives, and improved IS infrastructure. Social implications emphasize inclusive digitalization to enhance enterprise sustainability and reduce inequality.