Measuring the Indonesian SMEs’ capabilities for sociodynamic and disruptive innovation: the case for gaining resilience and sustainability

Abstract Owing to the evolution of information and technology, SMEs intensively get information about future probable economic benefits for their internal businesses. Furthermore, by adapting to the dynamics of their business environment, SMEs encourage themselves to carry out disruptive innovations that create distinctive products and new market segments, improving their aggregative competencies and overall business. Therefore, this study investigates whether SMEs in Indonesia posit and employ sociodynamic factors and disruptive innovation to gain resilience and sustainability. Moreover, it explores the importance of the government's strategic policy formulation in connection with the embeddedness of sociodynamic factors and disruptive innovation in SMEs’ businesses. Methodologically, within a qualitative approach, this study comprehensively collected its data through three methods: in-depth interviews, observations, and document studies. In addition, it utilised purposive criteria to select high-quality informants from Indonesian SMEs, achieving minimum response bias. Thus, firstly, this paper demonstrates the sequential reasons Indonesian SMEs have overcome economic downturns using sociodynamic factors and disruptive innovation. Secondly, this study shows that the Indonesian Ministry of SMEs has issued fallacious policies focusing on the digital economy. This ministry should encourage SMEs to have a bundled knowledge of sociodynamics and disruptive innovation. Thirdly, this study contradicts the evidence of the barriers to Indonesian SMEs’ capability enhancements via digital transformation by evidencing that most SMEs adopt low-single-platform information.