Abstract

This study aims to describe and analyze the relationship between readiness for change and agile leadership to the dynamic capabilities of SMEs. Furthermore, this study also examines the effect of dynamic capabilities on strengthening the digital ecosystem of SMEs. If SMEs are ready to change and have agile leadership, they will increase the dynamic capabilities of SMEs. The dynamic capabilities of these SMEs will ultimately improve the lives and long-term sustainability of SMEs in the digital world. This type of research is explanatory research to analyze the digital ecosystem enhancement of SMEs. This study uses analytical methods in managing data and to test hypotheses with The Structural Equational Modeling (SEM) which is operated through the Partial Least Squares (PLS) program. The sampling technique used non-random sampling with a purposive sampling method. Data were collected from 250 SMEs in Central Java through a questionnaire. Data analysis using WrapPLS 5. The results of the study show that readiness for change and agile leadership can improve the dynamic capabilities of SMEs. The increasing dynamic capabilities of SMEs are proven to be able to strengthen the digital ecosystem in SMEs. The results of this study are expected to contribute to SMEs to strengthen the growth of the digital economy in Indonesia.

Keywords: readiness to change, agile leadership, dynamic capabilities, digital ecosystem, SMEs