Bouncing Back from an Extreme Crisis: Does Digital Technology Really Help Entrepreneurs Generate Creative Recoveries?

This study examines how digital technology adoption plays its role in shaping the adaptive resilience of Indonesian small- and medium-sized enterprises (SMEs) during and after an extreme crisis like the COVID-19 pandemic. Specifically, it explores how the relative advantages of digital adoption change as the crisis subsides. This article addresses a critical knowledge gap by going beyond the narrative of digital adoption success to investigate why many SMEs discontinue the use of digital technologies after the crisis has passed. Findings from a qualitative case study of 21 SMEs reveal a significant shift, from an initial relative advantage in digital adoption to a post-crisis relative disadvantage. This study also shows dynamic and interrelated processes among multiple dimensions that shape perceptions of relative advantage and relative disadvantage in supporting or failing to support SMEs’ adaptive resilience. The main contribution of this study is to reveal that forced digital adoption during an extreme crisis does not guarantee permanent adoption, as the majority of participants returned to offline channels after finding digital tools less supportive in a more stable environment. The findings also demonstrate that adaptive resilience and business survival may be driven more by entrepreneur’s personal values and managerial capabilities than by technology itself. The research offers a nuanced perspective on digital transformation journeys in emerging markets, suggesting that institutional readiness is more important for sustainability than one-off technical interventions.