How Can Resource-Constrained MSMEs Compete in the Digital Economy? A Systematic Review of Frugal Innovation and Digital Capabilities

Desika Andriani; Lies Hendrawan Krisnawati; Titis Tilam Sari

doi:10.61132/santri.v4i5.2643

Authors

Desika Andriani STIE Bhakti Pembangunan
Lies Hendrawan Krisnawati STIE Bhakti Pembangunan
Titis Tilam Sari STIE Bhakti Pembangunan

DOI:

https://doi.org/10.61132/santri.v4i5.2643

Keywords:

Competitiveness, Digital Capabilities, Digital Economy, Frugal Innovation, MSMEs

Abstract

This study aims to analyze the development of the literature on frugal innovation and digital capabilities as a strategy to increase the competitiveness of micro, small, and medium enterprises (MSMEs) that face limited resources in the digital economy. The research used a systematic literature review and bibliometric analysis of 3,287 documents for the period 2008-2026, which were searched through Scopus and Crossref, then mapped using VOSviewer. The literature selection was carried out based on inclusion and exclusion criteria, while 24 core articles for the 2022-2026 period were used in the thematic synthesis. The results showed that publications were dominated by the fields of Business, Management and Accounting, Social Sciences, and Computer Science, with China, India, and the United Kingdom as the main contributors. Keyword analysis showed the dominance of the themes of sustainable development, innovation, sustainability, digital transformation, and artificial intelligence. Network visualization showed the relationship between frugal innovation, resource scarcity, resource limitation, medium enterprises, and competitive advantage. The thematic synthesis shows that limited resources can encourage frugal innovation, while digital capabilities and dynamic capabilities strengthen the ability of MSMEs to select, integrate, and reconfigure technology and resources. This study confirms that the competitiveness and resilience of MSMEs are built through the integration of resource constraints, frugal innovation, digital capabilities, and dynamic capabilities. These findings provide an integrative conceptual framework for future research and offer a strategic basis for MSMEs to optimize technology efficiently, adaptively, and sustainably.

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