Digital literacy and survival mechanism of micro-small enterprises in practicing sharing economy

Abstract

Amidst the COVID-19 pandemic, Micro-Small Enterprises (MSEs) have faced severe challenges and many are on the brink of collapse. To address this issue, this study investigates the survival mechanisms of MSEs in the digital economy platform, including the barriers they encounter when adapting to sharing economy practices. Additionally, the study examines the digital literacy capabilities of MSE actors and the extent to which these capabilities impact the continuity of businesses involved in the sharing economy. Using a descriptive research approach with 300 MSE actors in East Java Province as respondents, this study reveals that, aside from receiving financial assistance, digitization is essential for MSEs to avoid failure. MSE actors, who previously relied solely on traditional channels for product marketing, are now compelled to use digital platforms and encouraged to participate in sharing economy practices. The study indicates that, despite the perceived benefits of MSE actors’ engagement in the sharing economy practice, the profit earned must be shared with the application owner, without any guarantee of proportionality to the risks they bear. Digital transformation, however, presents a unique opportunity for both new and established MSE actors to upgrade their businesses. Notably, online promotion is much more accessible and cost-effective, with options such as Instagram, Facebook, and Google Business. Nevertheless, the readiness of MSE actors to adopt digital transformation is uneven, as some possess outdated gadgets and inadequate digital literacy. Therefore, digital literacy training for MSE actors is a crucial need.

Keywords:

• sharing economy
• digital platform
• MSE actors
• digital marketing
• digital literacy

PUBLIC INTEREST STATEMENT

The MSEs have long been perceived as resilient to various challenges. However, the ongoing COVID-19 pandemic has severely impacted the ability of MSEs to survive. In many regions, numerous SMEs face the threat of collapse. This research reveals that despite the benefits of MSE actors’ engagement in the sharing economy, they must share their profits with the application owner without guaranteed proportionality to the risks they bear. This raises awareness of the challenges and potential drawbacks associated with the sharing economy model. The readiness for digital transformation among MSE actors is uneven, with some facing challenges due to outdated gadgets and inadequate digital literacy. Thus, the research emphasizes the importance of providing digital literacy training as a crucial need for MSE actors.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Bagong Suyanto

Bagong Suyanto is a Professor of Sociology at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Airlangga, Indonesia. He teaches, Sociology of Economy, Sociology of Child, Poverty and Social Justice, and Social Welfare.

Rahma Sugihartati

Rahma Sugihartati is a Professor at the Department of Information and Library Science, Faculty of Social and Political Sciences, Universitas Airlangga, Indonesia.

Nadia Egalita

Nadia Egalita, is a Lecturer at the Faculty of Humanities, Universitas Airlangga, Indonesia.

Siti Mas’udah

Siti Mas’udah is Associate Professor at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Airlangga Indonesia. She is also an Cheif Editor of Masyarakat, Kebudyaan dan Politk. She also published a lot of renowned work as origional research articles in Scopus, Web of Science and in international publishers.

Doddy Sumbodo Singgih

Doddy Sumbodo Singgih is Associate Professor at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Airlangga Indonesia. He teaches several courses: Rural Sociology, Social Issues, and Indonesian Socio-Cultural System.

  Sudarso

Sudarso is Associate Professor at the Department of Sociology, Faculty of Social and Political Sciences, Universitas Airlangga Indonesia. He teaches several courses: Rural Sociology, Urban Sociology, and Social Change.