DIGITALIZATION OF BUSINESS STRENGTHENS PRODUCT INNOVATION STRATEGIES IN INCREASING THE INCOME OF MSMES

The Micro, Small, and Medium Enterprises (MSMEs) have a strategic role in the Indonesian economy, especially in reducing unemployment rates. However, the significant growth in the number of MSMEs poses challenges in increasingly tight business competition. This study aims to analyze the effect of product innovation on MSME income and the role of digital payment and digital marketing in strengthening this relationship. The research method used is a quantitative approach with data collection techniques through questionnaires distributed to 152 MSME actors in Surakarta City. Data analysis was carried out using multiple linear regression and moderated regression with IBM SPSS Statistics 23. The results of the study showed that product innovation has a positive and significant effect on MSME income. In addition, digital payment and digital marketing also strengthen the relationship between product innovation and MSME income. These findings indicate that product innovation strategies combined with the use of digital technology can increase the competitiveness and growth of MSME income.