Digital Entrepreneurship, Business Model Innovation, and Sustainable Resilience of MSMEs Amid Environmental Turbulence

Abstract

Under escalating market turbulence, digital entrepreneurship has emerged as an indispensable strategic driver for the growth and survival of Micro, Small, and Medium Enterprises (MSMEs). This study examines the influence of digital entrepreneurship on MSME sustainable resilience, evaluating the sequential mediating mechanisms of dynamic capabilities and business model innovation. Employing an explanatory survey, empirical data were gathered from 240 digital MSME entrepreneurs across Indonesia. Data were evaluated using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 4.0. Empirical results confirm that: (1) digital entrepreneurship positively and significantly fosters dynamic capabilities (β = 0.535; p < 0.001) and sustainable resilience (β = 0.268; p < 0.001); (2) dynamic capabilities positively enhance business model innovation (β = 0.482; p < 0.001); (3) business model innovation substantially reinforces sustainable resilience (β = 0.456; p < 0.001); and (4) dynamic capabilities and business model innovation sequentially mediate the link between digital entrepreneurship and sustainable resilience (indirect effect β = 0.118; p < 0.001; 95% CI [0.084; 0.162]). The structural framework explains 65.8% of the variance in sustainable resilience (R² = 0.658). These findings prove that to thrive beyond mere survival, MSME leaders must translate digital entrepreneurial postures into institutional dynamic capabilities and resilient business model architectures.