Track: Engineering Management

Abstract

Digitalization is vital in today's industries, yet it brings the risk of unemployment due to decreased jobs. Indonesia counters this via the Indonesia 4.0 roadmap, boosting micro-enterprises, and encouraging tech-related investments. MSMEs are still faced a problem about financing which results in them not being able to develop innovations to increase production due to the very limited use of technology. On the other hand, financial technology (fintech) was growing rapidly in the 2017-2021 period. However, 74% of MSMEs did not yet have access to finance, indicating a discrepancy between the use of fintech in Indonesia and the understanding of society, especially MSMEs, regarding financial inclusion. In fact, financial inclusion has a direct and significant positive effect on business sustainability practices on MSME performance. Business continuity practices are carried out by identifying and supporting the factors that motivate MSMEs in economic growth. This study aims to evaluate the effect of financial technology innovation through business continuity practices on the performance of MSMEs in Karawang Regency using the non-probability sampling method with convenience sampling technique on 100 MSME respondents using the SEM-PLS method. The results showed that environment affects business continuity and perceived industry pressure but does not affect the use of fintech and perceived government; organization affects business sustainability but does not affect the use of fintech; technology affects perceived direct and perceived indirect but does not affect the use of fintech; and MSME performance is only influenced by the use of fintech and is not affected by business sustainability.