Sustainable resilience strategy: unleash the micro-businesses’s potential in the digitalization and sustainability era

Astuty, Eriana; Sudirman, Ivan Diryana; Aryanto, Rudy Article Sustainable resilience strategy: unleash the microbusinesses’s potential in the digitalization and sustainability era Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Astuty, Eriana; Sudirman, Ivan Diryana; Aryanto, Rudy (2024) : Sustainable resilience strategy: unleash the micro-businesses’s potential in the digitalization and sustainability era, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-29, https://doi.org/10.1080/23311975.2024.2313672 This Version is available at: https://hdl.handle.net/10419/326041 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Sustainable resilience strategy: unleash the micro-businesses’s potential in the digitalization and sustainability era Eriana Astuty, Ivan Diryana Sudirman & Rudy Aryanto To cite this article: Eriana Astuty, Ivan Diryana Sudirman & Rudy Aryanto (2024) Sustainable resilience strategy: unleash the micro-businesses’s potential in the digitalization and sustainability era, Cogent Business & Management, 11:1, 2313672, DOI: 10.1080/23311975.2024.2313672 To link to this article: https://doi.org/10.1080/23311975.2024.2313672 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 13 Feb 2024. Submit your article to this journal Article views: 4628 View related articles View Crossmark data Citing articles: 9 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 ENTREPRENEURSHIP AND INNOVATION | RESEARCH ARTICLE Cogent Business & ManageMent 2024, VoL. 11, no. 1 , 2313672 Sustainable resilience strategy: unleash the micro-businesses’s potential in the digitalization and sustainability era Eriana Astuty , Ivan Diryana Sudirman and Rudy Aryanto entrepreneurship Department, Binus Business school undergraduate Program, Bina nusantara university, Bandung, indonesia ABSTRACT This research aims to (1) build and predict a sustainable business model to support micro-business in developing its potential in facing the challenges of the dual transition era (digitalization and sustainability); (2) explore opportunities and challenges for sustainable business models in the creative craft, fashion, food and beverage industry sectors. This research used a mixed methods approach on 381 micro and small businesses in Indonesia, utilizing an explanatory sequential design. The study revealed that aligning internal resources with responsive strategies can form sustainable resilience strategies (SRS) that are reflected in survival, continuity, reorientation, and synergy. These SRS strategies significantly impact micro-businesses in meeting the challenges of adopting digital technology in their business operations. Moreover, to meet the challenges of a sustainable business model, micro-businesses must have a high orientation to achieving sustainable development goals first, then SRS can mediate them so that sustainable business practices are realized, which have a lasting impact on sustainable business performance. Overall, This study recommends that micro-businesses adopt a sustainable resilience strategy and campaign the SDG agenda through digital technology adoption. This research provides practical insights for micro-businesses in exploring sustainable business opportunities and challenges. It also benefits stakeholders such as industry, universities, science and technology parks as an integrated innovation platform, and the government in shaping policies and regulations related to digitalization and sustainability. Resilience has been previously studied as an input, process, or outcome. This study has discovered resilience as a sustainable strategy for micro-businesses, which is the novelty of this study. 1. Introduction Strategic management involves a series of decisions and actions made by managers to ensure the long-term success of an organization. It is crucial that the organizational goals are set in a way that can be used as a measure of the company’s performance (Wheelen et al., 2018). The process of strategic management confidently starts by thoroughly scanning and analyzing both the external environment, including the social and natural environments, as well as the company’s internal environment, such as assets, skills, and competencies. With this in-depth understanding, the strategy is formulated and implemented with confidence, after which, evaluation and control are carried out to ensure that the strategy achieves its intended goals (Wheelen etal., 2018). In addition, other strategic thinking models also focus on a holistic and integrated view of business by developing a long-term vision that involves considerations of company culture, reputation, competence, and resources (McGee, 2005). Strategic management theory is closely related to various scientific disciplines. In this research, strategic management theory is linked in the context of entrepreneurship, which does not only mean business creation, but more than that, entrepreneurship includes the process of seeking opportunities, taking risks, and tenacity in pushing ideas into reality (Kuratko, 2011). This research also refers to the opportunity-based entrepreneurship © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT eriana astuty [email protected].id entrepreneurship Department, Binus Business school undergraduate Program, Bina nusantara university, Jl. Pasir Kaliki no.25-27, Bandung, 40181, West Java, indonesia. https://doi.org/10.1080/23311975.2024.2313672 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 10 November 2023 Revised 28 January 2024 Accepted 29 January 2024 KEYWORDS Digital technology adoption; sustainable development goals; sustainable resilience strategy; sustainable entrepreneurial practices; sustainable business performances; entrepreneurial competence; entrepreneurial orientation SUBJECTS Entrepreneurship and Innovation REVIEWING EDITOR Eric Liguori, Florida State University, United States 2 E. ASTUTY ETAL. theory supported by Peter Drucker and Howard Stevenson (Simpeh, 2011) which states that entrepreneurs always look for change, respond, and exploit it as an opportunity (Drucker, 1985). This theory suggests that entrepreneurs do not cause changes but instead take advantage of opportunities created by changes, such as technological advancements and shifts in consumer preferences, so that the opportunities that arise become a source of innovation that can generate demand. Another finding confirms that opportunity-based entrepreneurship is essential for environmental quality in sustainable development (He et al., 2020). Sustainability is about protecting the environment and ensuring the well-being of humanity and the economy. The 3Ps of sustainability, namely people, planet, and profit, also known as the triple bottom line (Heizer et al., 2018; Krajewsky et al., 2013), have evolved into the 5Ps, including people, planet, prosperity, peace, and partnership (United Nations, 2015). Sustainable entrepreneurship is a powerful tool that can help us preserve nature, support communities, and create a better future for all. We can build a more sustainable and prosperous world by pursuing innovative solutions that benefit both individuals and society (Shepherd and Patzelt, 2011). Over the past decade, business people have been confronted with sustainability challenges and the direct impact of the COVID-19 pandemic in the last four years. As a result, traditional business processes have been limited while digitalization has accelerated rapidly (Roman and Rusu, 2022). Many research studies have highlighted the benefits and challenges of digitalizing micro small and medium enterprises (MSMEs). Digital technology, for example, can provide economic and social advantages by improving both internal and external communications (Zhen et al., 2022). In the past decade, business people have been facing a dual transition era that encompasses two major challenges - digitalization and sustainability, where the digital technology has become a crucial aspect of almost all areas of business operations, meanwhile, achieving the sustainable development goals (SDG) has also become a shared responsibility and a significant challenge for companies. This phenomenon is also experienced by micro-business actors in Indonesia. In Indonesia, Micro and Small Enterprises (MSEs) are part of the manufacturing industry which is known for its labor-intensive nature and minimal capital. Apart from contributing to Gross Domestic Product (GDP), it also acts as a safety net for businesses affected by the financial and economic crisis. According to the classification of businesses by the Indonesian Central Statistics Agency, micro businesses are those with a workforce of 1-4 employees, while small businesses have a workforce of 5-19 employees (Indonesian Central Statistics Agency, 2020). After reviewing the literature and examining the empirical conditions of micro-businesses in Indonesia, this research has two primary objectives. Firstly, to formulate a sustainable business performance model that can help micro-businesses survive during the dual transition period and continue to thrive sustainably in the future and examine the interrelationships that exist between the variables in the model. Secondly, explore the opportunities & challenges faced by micro-businesses in facing the dual transition era. To achieve these objectives, the research will address two key research questions. The first research question (RQ1) aims to explore the business strategies that are appropriate for Indonesian business people to implement when facing the dual transition era. The second research question (RQ2) focuses on how the adoption of digital technology can improve sustainable business performance. Overall, this research is significant as it seeks to provide valuable insights into the challenges and opportunities faced by micro-businesses in the dual transition era. By identifying the appropriate strategies and exploring the potential of digital technology, the research aims to help micro-businesses in Indonesia to adapt and thrive in the changing business landscape while contributing to sustainable development. 2. Literature review, hypotheses development, and conceptual model 2.1. Sustainable resilience strategy (SRS) The term ‘resilience’ is commonly used in a variety of fields such as business, economics, politics, engineering and basic science (Norris et al., 2008). According to research, resilience is an interdisciplinary concept that encompasses three key elements: 1. Bouncing back from a shock: This refers to a system’s ability to return to its original state or path after experiencing a disturbance (Martin and Sunley, 2015); 2. Ability to absorb shocks: This element highlights how much disturbance a system can withstand COGENT BUSINESS & MANAGEMENT 3 before moving to a new state (Hartmann et al., 2022; Martin and Sunley, 2015); 3. Positive adaptation: This refers to a system’s capacity to maintain its core performance despite shocks or disruptions (Hartmann et al., 2022; Martin and Sunley, 2015). In relation to the topic of entrepreneurship, it is confirmed that the resilience of entrepreneurs is influenced by two main factors: psychological function (emotional, cognitive, previous experience of difficulties, social), which is called psychological resilience in entrepreneurship, and entrepreneurial action factors (Ahmed etal., 2022). This applies not only to individuals but also business units. Psychological functioning is a crucial pathway between entrepreneurship and subjective well-being (Nikolaev et al., 2020), while entrepreneurial action factors demonstrate an interdependent relationship where resilience is both an antecedent and a consequence of entrepreneurial action (Shepherd etal., 2020). Resilience outcomes include proactive problem-solving abilities, a sense of moral purpose, self-reliance, realistic optimism, and a sense of belonging to a diverse community. Interestingly, these outcomes are important inputs for enhancing resilience and entrepreneurial action (Shepherd et al., 2020). Several previous studies have explored resilience as an input, process, or outcome. Meanwhile, in this research, resilience is a strategy, based on strategic management Wheelen et al. (2018) as an underpinning theory. Regarding the issue of sustainability, micro and small business players can strive to obtain high customer value through efficient and sustainable ways. They can adjust the potential resilience of tangible and intangible resources with the choice of business operations strategies that can generate competitive advantage (Alberti et al., 2018; Heizer et al., 2020), including differentiation, low costs, and responsiveness (Heizer et al., 2020). Business actors can implement several combinations of these strategies (Heizer et al., 2020). Other findings state that using ingenuity and choosing the right company strategy to overcome new opportunities and obstacles arising from the COVID-19 pandemic shows that Indonesian micro and small business are proven to survive, be sustainable, and grow significantly (Purnomo et al., 2021). Based on the literature references above, researchers formulated Sustainable Resilience Strategy (SRS) for micro and small business players by aligning the resilience of tangible/intangible internal resources with responsive strategies (Alberti et al., 2018; Heizer et al., 2020) to create high customer value in an efficient and sustainable. The four dimensions of sustainable resilience strategies are: (1) survival, it involves finding creative ways to deal with crises that may arise (Branicki et al., 2018); (2) continuity, involves seeking connectivity with market conditions and access to resources (Branicki et al., 2018); (3) re-orientation, it involves reviewing attitudes and decision-making in response to changes that may occur, such as changes in macro-environmental demands, social, economic, technological changes, changes in government policy, or changes in market preferences (Branicki etal., 2018); and (4) synergy, it involves developing synergy capabilities with stakeholders in dealing with crises (Alberti et al., 2018). 2.2. Relationship between entrepreneurial orientation (EO), entrepreneurial competence (EC), and SRS Resilience refers to the ability to maintain good mental and emotional health even after experiencing trauma or loss (Corner et al., 2017). It’s important to note that resilience is not only crucial for individuals, but also for small businesses, organizations, and ecosystems to respond effectively to unexpected negative events (Corner et al., 2017, Roundy et al., 2017; Gianiodis et al., 2022;). While many studies have focused on the economic resources required for entrepreneurship, very few have emphasized the importance of psychological functions when responding to adversity (Nikolaev etal., 2020). Based on existing literature, the author has integrated psychological aspects into the framework of entrepreneurial activities, particularly those associated with entrepreneurial orientation and competence. These two factors play a critical role in developing strategies for entrepreneurial resilience, encompassing a wide range of psychological traits such as independence, risk-taking, proactiveness, innovation, and competitiveness. Moreover, entrepreneurial competence is also linked with psychological factors such as the ability to establish relationships, commitment, organizational skills, and other relevant areas. 4 E. ASTUTY ETAL. EO encompasses a set of practices, processes, and decision-making activities to enter new markets, whether it is in a completely new market or an established market with a new product (Lumpkin and Dess, 1996), becoming a new entrant is a significant accomplishment. EO encompasses five primary dimensions, including acting independently, being willing to innovate, taking risks, being aggressive towards competitors, and having a proactive approach towards market opportunities (Lumpkin and Dess, 1996). Empirical evidence has demonstrated the ability of EO to mobilize the resilience of Micro, Small and Medium Enterprises (MSMEs), especially during times of crisis, such as the COVID-19 pandemic. EO achieves this by striking a balance between short-term operational actions and long-term strategic thinking, resulting in a more resilient MSME (Zighan et al., 2022). The dimensions of innovation, risk-taking, and proactiveness in EO can help MSMEs adapt to dynamic environmental changes (Branicki etal., 2018), making them better prepared to face significant disruptions, such as the COVID-19 pandemic (Zighan et al., 2022). EO has also been proven to contribute to business model innovation performance and product development capabilities (Ferreras-Méndez et al., 2021), making it an essential strategic orientation. EO has a positive impact on the resilience of Small and Medium-sized Enterprise (SME) supply chains through the dimensions of innovation, risk-taking, and proactiveness (Al-Hakimi and Borade, 2020). Simultaneously, EO also has a positive and significant impact on SME supply chain resilience (Al-Hakimi et al., 2022). In conclusion, EO plays a vital role in helping MSMEs become more adaptive, innovative, and better equipped to address sustainability issues by providing unique and desirable business solutions (Nuseir and Aljumah, 2022). It is a strategic orientation that enables MSMEs to achieve long-term success by balancing short-term and long-term objectives and adapting to dynamic environmental changes while maintaining a competitive edge. In 2000, Man & Lau proposed a theoretical framework for EC that aimed to identify the competency areas required for successful entrepreneurship in MSMEs. They categorized various entrepreneurial behaviors into six competency areas, namely opportunity, conceptual, relationship, organizing, strategic, and commitment competence (Man and Lau, 2000). Competence is the ability to utilize knowledge and skills to achieve compelling and extraordinary performance (Boyatzis et al., 2002). For entrepreneurial competence, which includes searching for opportunities, conceptualizing business ideas, and taking risks to bring them to fruition (Kuratko, 2011), authors operationalize entrepreneurial competence into six dimensions as in the theoretical framework of Man & Lau (2000). According to empirical evidence from Italy, intellectual capital, which includes human capital, organizational capital, and relational capital, has a strong correlation with the resilience of MSMEs (Agostini and Nosella, 2022). Organizational capital and relational capital are similar to organizational competence and relational competence, respectively, as part of the entrepreneurship competency dimension. Moreover, apart from building the resilience of MSMEs, entrepreneurial competence is also essential for MSMEs to achieve maximum benefits while implementing e-commerce (Hussain et al., 2022). Therefore, the six dimensions of entrepreneurial competence defined by Man & Lau (2000) are crucial for MSMEs to succeed in the competitive e-commerce landscape. This theoretical framework can help entrepreneurs to develop their competencies in these areas and enhance their chances of success in their business ventures. Based on a literature review related to EO, EC, and SRS, the authors proposed the following hypothesis: Hypothesis 1: EO has a direct effect on SRS. Hypothesis 2: EC has a direct effect on SRS. 2.3. Sustainable entrepreneurship practices (SEPRAC) The basis for implementing sustainability practices requires a company management system that provides functional efficiency and sub-system effectiveness by considering the principles of sustainable performance (Ciemleja and Lace, 2011). In 2011, Shepherd & Patzelt introduced the idea of sustainable entrepreneurship, based on a thorough analysis of sustainable development and entrepreneurship literature. Their model defines sustainable entrepreneurship as a form of entrepreneurial pursuit that prioritizes the conservation of nature, the betterment of communities, and the creation of innovative products, COGENT BUSINESS & MANAGEMENT 5 services, and processes that deliver both economic and non-economic advantages to individuals, the economy, and society as a whole (Shepherd and Patzelt, 2011). In operational definition, Shepherd & Patzelt (2011) divides sustainable entrepreneurship as an entrepreneurial activity that carries out two constructs simultaneously, namely: ‘which must be sustainable’ and ‘which must be developed’. Things that must be sustainable or preserved are nature, life support sources, and communities. In contrast, things that must be developed are economic gain, non-economic gain to individuals, non-economic gain to society (Shepherd and Patzelt, 2011). Schaltegger & Wagner construct sustainable entrepreneurship as an entrepreneurial activity that includes ecopreneurship, social entrepreneurship, and institutional entrepreneurship. Ecopreneurship is an entrepreneurial activity that focuses on providing solutions to conditions of environmental degradation caused by market failure through the creation of economic value (Dean and McMullen, 2007), so the primary goal of ecopreneurship is to make money by solving environmental problems (Schaltegger and Wagner, 2011). Social entrepreneurship (SE) is conceptualized as an entrepreneurial activity that contributes to solving social problems and creating value for society. The main goal of SE is to achieve social goals and secure funds to achieve this. In other words, SE mainly focuses on solving social problems and integrating them into economic issues (Schaltegger and Wagner, 2011). Institutional entrepreneurship has a core motivation to contribute to changes in regulations, social institutions, and markets (Schaltegger and Wagner, 2011), so the biggest challenge for organizations is changing institutions to integrate them into sustainability issues. In line with this construction is entrepreneurial practices related to ecopreneurship, social ecopreneurship, and institutional entrepreneurship at University in Malaysia, which can be supported by the effective implementation of lean higher education so that it has implications for the sustainability of higher education (Nawanir et al., 2019). 2.4. Relationship between SDG-challenges orientation (SDGCO), SRS, and SEPRAC Small and Medium Enterprises (SMEs) are integral to the global economy. However, their business practices are often unsustainable and contribute significantly to worldwide environmental degradation and social impacts (Ahmed et al., 2018). The concept of sustainability has evolved from the 3Ps (people, profit, and planet) (Heizer et al., 2020; Krajewsky et al., 2013) to the 5Ps (people, planet, prosperity, peace, and partnership) (United Nations, 2015). The 2030 Agenda of the SDGs aims to promote collaboration and partnership within a country to achieve 17 SDGs, including the 5 P. Sustainability orientation is the belief in integrating social and environmental considerations into business operations, indicating an organization’s readiness to adopt sustainability-based initiatives (Horak et al., 2018). It includes awareness, confidence, and intelligence regarding initiatives for social, environmental, and economic progress (Horak et al., 2018), as well as law and governance (The Ministry of National Development Planning, 2020). Researchers have proposed four SDGCO dimensions, namely social pillar orientation (SDG_SO), environmental pillar orientation (SDG_ENO), economic pillar orientation (SDG_ECO), law, and governance pillar orientation (SDG_LGO) (Horak etal., 2018; The Ministry of National Development Planning, 2020). Sustainability is a fundamental principle that emphasizes the significance of our actions today not hindering the range of economic, social, and environmental choices that will be available for future generations (Elkington, 1997; Heizer et al., 2020; Krajewsky et al., 2013; Labuschagne et al., 2005). Decision-makers need to manage resources not only at present but also over time to build robust system resilience to overcome the uncertainties of the future (Bansal and DesJardine, 2014). According to Kuckertz & Wagner (2010), sustainability orientation refers to the underlying attitudes and beliefs that a person holds towards environmental protection and social responsibility. It helps to determine whether an individual intends to start a business with a sustainability-oriented approach (Kuckertz and Wagner, 2010). Similarly, Parrish’s 2010 perspective supports the idea that companies require a specific orientation to maintain a balance between the economy, environment, and social dimensions. In other words, firms need to focus on not only financial gains but also on the impact of their actions on the environment and society (Parrish, 2010). Other researchers have discovered that sustainability orientation and entrepreneurial orientation positively impact sustainable entrepreneurship. Additionally, entrepreneurial knowledge has a significant moderating influence (Hanan et al., 2021). To achieve sustainability, organizations need a sustainability orientation and a comprehensive focus on achievements from all individuals and organizations (Karkoulian et al., 2016). Further findings suggest that the concept of sustainability needs to be campaigned to increase awareness and understanding of 6 E. ASTUTY ETAL. protective measures for the community. Policies for implementing sustainable practices for members of the company’s supply chain (Saqib and Zhang, 2021) are vital in this regard. Orientation and understanding of company systems and procedures, particularly those related to environmentally friendly practices and responsibility towards stakeholders, such as the community, customers, business partners, employees, and suppliers, are critical. To improve sustainable entrepreneurship practices in MSMEs, it is essential to increase awareness and understanding of these factors (Ahmad etal., 2020). In conclusion, sustainability is a complex and multi-dimensional concept that is not limited to environmental protection but also includes social and economic development. Sustainable development requires a comprehensive approach that integrates social, environmental, and economic considerations, as well as law and governance. Achieving sustainability will depend on the readiness of organizations to adopt sustainability-based initiatives and the focus on achievements from all individuals and organizations. Based on the SDGCO, SRS, and SEPRAC literature review, the author proposes the following hypothesis: Hypothesis 3: SDGCO has a direct influence on SRS. Hypothesis 4: SDGCO has a direct influence on SEPRAC. 2.5. Relationship between digital technology adoption (DTA), SRS, and SEPRAC Digital technology adoption means using digital technology in business that can benefit business model development, income-generating opportunities, and new value (Urdu etal., 2019). MSME players can adopt digital technology to increase competitiveness, including by fulfilling digitalization prerequisites such as the internet and its devices (Urdu et al., 2019), as well as embracing it in business operations such as in consumer service processes, production, marketing, sales, and supply chain management (Al-Allak, 2010; Jha et al., 2022; Lang et al., 2022; Ristyawan, 2020; Sharma et al., 2022; Tamvada et al., 2022;). Digital business model innovation has been proven to strengthen competitiveness and support business sustainability (Ahmad et al., 2022). Previous research findings illustrate how digitalization can improve entrepreneurial resilience by adopting a systematic approach to identify and describe digital behaviors, actions, and strategies that can assist businesses to transform during the COVID-19 pandemic. It enables entrepreneurs to make informed decisions regarding digital tools, platforms, and infrastructure that they can utilize to optimize their business units despite the limited resources and uncertainties presented by the pandemic (Santos et al., 2023). Employing digital technologies to enhance strategic and operational resilience can facilitate responding to adversity, but this requires having competent and digitally literate employees and executives, investing in digital technologies and building organizational capabilities (Santos et al., 2023). Many studies examine forms of digital technology adoption and their implications for business and sustainability, including the use of e-commerce for the development of SMEs in many countries, because of its ability to reduce operational costs to improve company performance (Nasution et al., 2021); the use of AI-CRM as a form of technology adoption that has a positive impact on the dynamic capabilities of family businesses, which has implications for the sustainability of family businesses during the crisis (Chaudhuri et al., 2023); Big data analysis capability has an indirect impact on sustainable competitive advantage (Behl etal., 2022). In today’s business world, companies are facing challenges related to internationalization, digitalization, and sustainability. These three factors are crucial for the growth of any organization. However, when companies decide to expand their operations globally, digitalization and sustainability can sometimes become competitors instead of being complementar (Denicolai etal., 2021). Previous studies have produced inconsistent evidence regarding the relationship between digital technology adoption and sustainable business strategy. Some findings reveal that the strategy established in the new normal post-pandemic conditions is reflected in the scope of successful implementation of advanced technology (Akpan et al., 2022). Some find that adopting digital technology has not directly shown positive results on business resilience (Yawiseda et al., 2022), but there are also those who find that digitalization influences business resilience (Santos et al., 2023). During the COVID-19 pandemic, there was a strong correlation between internet/e-business adoption, online marketing, and the sustainability of Indonesian MSMEs (Patma et al., 2021). However, this digital transformation is a challenging COGENT BUSINESS & MANAGEMENT 7 task for Indonesian MSMEs. This unpreparedness is shown in Indonesia’s 2020 Digital Competitiveness Index (DCI) ranking, which is in 56th position out of 63 countries (Najib, 2022). Resilience often leads to re-engagement in entrepreneurship after a business failure. It allows individuals to learn from their mistakes and make informed decisions in their next venture (Williams et al., 2020). Resilience, a psychological trait that enables one to endure and recover from adversity, is a critical component for entrepreneurs looking to grow and transform their institutions in the face of extreme conditions (Cascio and Luthans, 2014). Within the family business context, the display of resilience by entrepreneurs can create a positive impact on future generations of entrepreneurs, by promoting transgenerational entrepreneurship and shaping the strategic direction of their successors (Jaskiewicz et al., 2015). The relationship between DTA and sustainability is interesting to study further in the context of MSEs. For this reason, based on the stages in the strategic management theory of Wheelen et al. (2018), researchers directly through hypothesis drawing as follows: Hypothesis 5: SRS has a direct effect on DTA. Hypothesis 6: SRS has a direct effect on SEPRAC. Hypothesis 8: DTA has a direct effect on SEPRAC. 2.6. Relationship between DTA, SRS, SEPRAC, and sustainable business performance (SBPERF) Company performance is the end outcome of a company’s actions and operations (Wheelen et al., 2018). The measurement of corporate performance has progressed from solely concentrating on economic profit to considering both economic and non-economic gains as long as they are tied to sustainability concerns (Le, 2022; Shepherd and Patzelt, 2011). Sustainable entrepreneurial performance takes into account the economic impacts of entrepreneurial activities on individuals, companies, and society, while also considering non-economic sustainability outcomes (Shepherd and Patzelt, 2011). Previous research confirms that the performance of MSEs in emerging countries can be influenced by the level of entrepreeneurial orientation, digital technology adoption, and innovation capability (Fang et al., 2022). Technology adoption will help close the productivity gap between micro and small business, with large corporations by increasing capacity and capability for greater competitiveness and innovation (Abu Hasan et al., 2022). Using simple digital technologies and focusing solely on sales can help micro-businesses improve their performance and create more value, thus leading to increased employment opportunities. However, implementing complex digital technologies that come with higher costs can have a short-term negative impact on the performance of micro-businesses (Roman and Rusu, 2022). Extensive research has demonstrated that the adoption of e-commerce is essential for the growth and development of micro-businesses in many countries. Utilization of e-commerce platforms not only enables efficient transactions and agreements with customers but also reduces operational costs significantly. This, in turn, leads to improved performance and competitiveness in the market (Nasution et al., 2021). On the other hand, resilience refers to the capacity of an individual to bounce back and recover from setbacks, failures, or adverse situations, and move forward with renewed energy. When entrepreneurs exhibit resilience, they are more likely to succeed in future business ventures (Williams etal., 2020). This is especially important in family businesses, where resilience can be passed down to future generations and shape the company’s strategic direction (Jaskiewicz et al., 2015). Institutional entrepreneurs who exhibit resilience are better equipped to drive change and transform institutions, even in extreme conditions (Cascio and Luthans, 2014). Another research finding states strong personal resilience can effectively enhance employee-level resilience and business performance (Santoro etal., 2020). Furthermore, it is confirmed that sustainable practices can have a significant impact on a company’s sustainability performance (Saqib and Zhang, 2021). In the context of supply chain management as part of business operations, it is also confirmed that circular economy practices are very important in encouraging sustainable supply chain management to achieve sustainable performance (Le, 2022). The sustainable practices in manufacturing, procurement, and distribution have a significant effect on a company’s 14 E. ASTUTY ETAL. research conditioning, location, research instruments, time, procedures used in measurement, and data sources (Podsakoff et al., 2012). In particular, this ‘bias’ can be caused by (i) the use of the same measurement method when measuring the construct, which often occurs in survey research; (ii) the use of a single informant data source (Malhotra et al., 2017; Podsakoff et al., 2003; 2012); (iii) as well as the presence of several false correlations between variables, which can lead to wrong conclusions about the relationship between variables by inflating or deflating the findings. The researcher collected data from a single source for one questionnaire to measure the seven observed variables during the research. To prove that there was no common method variance in the data collected, the researcher carried out CMV testing using procedural and statistical remedies as follows: 1. Procedural remedy, as follows (Podsakoff et al., 2012): (i) The research instrument uses a different scale for each variable, namely the EO, EC, SDGCO, SRS, DTA, and SEPRAC variables using a numerical scale that is often treated as an interval scale (Sekaran and Bougie, 2016) and the SBPERF variable uses a ratio scale, and uses a seven-point scale for exogenous variables (EO, EC, and SDGCO) and a five-point scale for endogenous variables (SRS, DTA, SEPRAC, and SBPERF); (ii) The researcher has ensured the confidentiality of the respondents; (iii) The research instrument uses scale items that are written clearly and precisely so that they are not too biased; (iv) The researcher has informed that there is no preferred or correct answer. What is needed is an honest answer according to the situation and conditions experienced/perceived by the respondent; (v) The researcher has provided clear Table 5. indicator reliability, internal consistency reliability, and convergent validity of reflective indicators. item code ← Construct outer loadings rho_a rho_c aVe au ← eo 0.739 0.795 0.857 0.546 Ca ← eo 0.769 inn ← eo 0.751 Pa ← eo 0.738 Rt ← eo 0.694 CCC ← eC 0.839 0.923 0.938 0.715 CMC ← eC 0.830 oPC ← eC 0.857 oRC ← eC 0.851 RC ← eC 0.817 stC ← eC 0.877 Co ← sRs 0.786 0.852 0.896 0.684 Reo ← sRs 0.870 su ← sRs 0.831 sY ← sRs 0.819 ia ← Dta 0.699 0.927 0.933 0.636 ii ← Dta 0.669 itCs ← Dta 0.852 itDM ← Dta 0.817 itKM ← Dta 0.797 itPD ← Dta 0.838 itsCM ← Dta 0.847 itsM ← Dta 0.840 Table 6. Discriminant validity: Heterotrait-Monotrait (HtMt) statistics. Dta eC eo sRs Dta eC 0.591 eo 0.586 0.842 sRs 0.715 0.766 0.721 HtMt value < 0.85. Table 7. Discriminant validity: Fornell and Larcker Criterion. Dta eC eo sRs Dta 0.798 eC 0.555 0.845 eo 0.509 0.725 0.739 sRs 0.635 0.683 0.595 0.827 note: Bolded is the square root of aVes, whereas the off diagonals are correlations. COGENT BUSINESS & MANAGEMENT 15 answering instructions in the instrument; (vi) Researchers have avoided unclear concepts and simplified complex questions; (vii) The researcher has tried to make language, vocabulary, and syntax simple and appropriate to the respondent’s reading ability; and (viii) The research instrument is free from double barrel questions. 2. Statistical remedies are as follows: (i) full collinearity testing. The steps are to create a dummy variable, set the dummy variable as an endogenous variable, connect all research variables to the dummy variable, and carry out collinearity testing. Threshold: if the VIF value <10 (Chin, 1998; Henseler et al., 2009), or VIF < 5 (Hair et al., 2011), or VIF < 3.3 (Diamantopoulos and Siguaw, 2006), then it is stated that there is no collinearity. The results of full collinearity testing are presented in Table 8. Marker variables MUST be highly reliable. Marker variables are theoretically unrelated to the endogenous variables under study. In the test, the marker variable must lead to all endogenous variables (Miller and Simmering, 2022). The steps connect all the variables involved in the research except the marker variable. Pay attention to the R-square value. Then, enter the marker variable into the model. Associate the marker variable with all endogenous variables. Pay attention to the R-square value. The relationship between the marker and endogenous variables should not be significant. In other words, the R-square should not increase significantly. If the relationship is significant and the R-square rises by 10%, then it is inevitable that CMV has occurred in the research model. Table 9 confirms the adjusted R2 value before and after the marker variable is entered into the model shows the adjusted R2 increases <10%, indicating CMV does not exist in the model (Podsakoff et al., 2012). 4.1.4. Structural model assessment The steps for assessing a structural model are checking for collinearity, evaluating the size and significance of structural path relationships, assessing R2, checking the effect size f2, and evaluating predictive relevance based on Q2 (Hair et al., 2014). 4.1.4.1. Collinearity assessment. The Variance Inflation Factors (VIF) value is a reliable measure of collinearity. To be considered free from collinearity, the recommended VIF value is <10 (Chin, 1998; Henseler et al., 2009). Hair et al. suggests a VIF value <5 (Hair et al., 2011), or a VIF value <3.3 (Diamantopoulos and Siguaw, 2006). Based on the Collinearity Statistics values in Table 10, all VIF values are <10, <5, or <3.3. Thus, it can be confidently stated that there is no collinearity in the model. 4.1.4.2. Structural model path coefficients. Figure 2 displays the relationship between exogenous and endogenous latent variables. Path coefficients show direct influence magnitude, which helps estimate indirect and total influence. T-statistics values in brackets measure significance. R2-Adjusted value is in the construct. Table 11 show inner model testing results. Table 8. statistical remedy: full collinearity testing. ViF Decision Dta → dummy variable 1.623 there’s no collinearity in the model because of the ViF value <10 [95, 96] or ViF < 5 [79] or ViF < 3.3 [90] eC → dummy variable 2.989 eo → dummy variable 1.769 sBPeRF → dummy variable 1.732 sDgCo → dummy variable 2.010 sePRaC → dummy variable 1.666 sRs → dummy variable 2.377 Table 9. R2-adjusted increases percentage. R-square adjusted sRs Dta sePRaC sBPeRF Full model without marker variable 0.502 0.402 0.518 0.590 Full model with marker variable 0.501 0.401 0.522 0.591 Percentage of increases R2-adjusted −0.20% −0.25% 0.77% 0.17% note: the R2 adjusted increases <10%, indicates CMV doesn’t exists in the model. 16 E. ASTUTY ETAL. 4.1.4.3. Deterministic coefficients (R2). To evaluate the strength of a prediction model, the R2 value can be used to measure the combined impact of exogenous variables on endogenous variables. This value indicates the variance in the endogenous construct that all related exogenous variables can explain. The R2 value ranges from 0 to 1, with higher values indicating greater prediction accuracy. Table 12 shows the model’s R2 values for all endogenous latent variables. 4.1.4.4.Effect size (f2).The change in R2 value that occurs when certain exogenous constructs are removed from the model, can be used to determine whether the removed constructs have a significant impact on the endogenous constructs. This measure is referred to as the f2 effect size. Table 13 presents the effect size f2 value for each endogenous latent variable in the model. Table 10. Collinearity assessment. Dta sBPeRF sePRaC sRs Decision Dta 1.682 1.676 there’s no collinearity in the model because the value of ViF <10 (Chin, 1998; Henseler etal., 2009) or ViF < 5 (Hair etal., 2011) or ViF < 3.3 (Diamantopoulos and siguaw, 2006) eC 2.540 eo 2.278 sDgCo 1.524 1.986 sePRaC 1.468 sRs 1.000 2.069 2.179 Figure 2. Hypothesized path. Construct: R-square adjusted; inner model: path coefficients (t-value); p ≤ 0.05 (one-tailed test). Table 11. summary of hypothesized testing (direct effects) - confidence interval bias corrected. Hypo theses Path std. Beta std. error t-value p-value Bias 5.00% 95.00% Decision H1 eo → sRs 0.156 0.067 2.314 0.010 −0.005 0.051 0.271 supported H2 eC → sRs 0.441 0.097 4.535 0.000 0.003 0.286 0.603 supported H3 sDgCo → sRs 0.191 0.076 2.506 0.006 0.005 0.062 0.310 supported H4 sDgCo → sePRaC 0.556 0.056 9.955 0.000 0.010 0.442 0.632 supported H5 sRs → Dta 0.635 0.040 16.047 0.000 0.002 0.560 0.691 supported H6 sRs → sePRaC 0.199 0.066 3.029 0.001 −0.004 0.092 0.307 supported H7 sRs → sBPeRF 0.389 0.066 5.883 0.000 −0.003 0.279 0.496 supported H8 Dta → sePRaC 0.059 0.052 1.134 0.128 −0.001 −0.024 0.146 not supported H9 Dta → sBPeRF 0.030 0.048 0.640 0.261 0.000 −0.044 0.110 not supported H10 sePRaC → sBPeRF 0.461 0.070 6.557 0.000 0.006 0.331 0.566 supported p ≤ 0.05 (one-tailed test). COGENT BUSINESS & MANAGEMENT 17 4.1.4.5. PLS-Predict. When conducting research to predict models using Partial Least Squares (PLS), it is important to have a measure of predictive ability (Hair et al., 2017). This measure shows how well the model can predict data that was not used in the analysis. If the measure, called Q2 prediction value, is zero or negative, it means that the model has no predictive power on that indicator. Beside that, the researchers can compare the Root Mean Square Error (RMSE) or Mean Absolute Error (MAE) values with the Linear Model (LM) benchmark to assess the predictive ability of PLS. If PLS-SEM produces lower prediction errors in terms of RMSE (or MAE) than LM for all indicators, it indicates high predictive power. If it produces lower prediction errors for some indicators, it has moderate predictive power. If none of the indicators show lower prediction errors, it lacks predictive power. Table 14 presents the results of the PLS-Predict analysis on the model’s four endogenous variables. Indicators IA, II, ITCS, ITDM, ITKM, ITPD, ITSCM, and ITSM have high predictive power for the DTA construct. The CO, REO, SU, and SY indicators have moderate predictive power for the SRS construct. Indicators DEG, DNEI, DNES, SCOM, SLSS, and SN have moderate predictive power for the SEPRAC construct. Indicators EC, MSG, PG, RE, SC, and SG have moderate predictive power for the SBPERF construct. Table 12. Deterministic coefficients of latent variable. R-square adjusted Decision (Chin, 1998)(Hair et al., 2011) Dta 0.400 moderate moderate sBPeRF 0.591 almost strong moderate sePRaC 0.516 almost strong moderate sRs 0.502 almost strong moderate Table 13. effect size (f2) assessment. f-square Decision (Hair etal., 2011) eo → sRs 0.022 small effect eC → sRs 0.155 medium effect sDgCo → sRs 0.037 small effect sRs → Dta 0.672 large effect sDgCo → sePRaC 0.423 large effect sRs → sePRaC 0.075 small effect sRs → sBPeRF 0.275 medium to large effect sePRaC → sBPeRF 0.367 large effect Dta → sePRaC 0.004 small effect Dta → sBPeRF 0.001 small effect Table 14. PLs-Predict. Construct item Code Q²predict PLs-seM_RMse LM_RMse Conclusion Dta ia 0.140 0.824 0.836 High predictive power ii 0.065 1.170 1.197 itCs 0.202 0.956 0.973 itDM 0.256 0.795 0.799 itKM 0.214 0.756 0.773 itPD 0.191 0.919 0.930 itsCM 0.204 0.919 0.942 itsM 0.179 1.005 1.023 sRs Co 0.252 0.843 0.852 Medium predictive powerReo 0.390 0.791 0.792 su 0.400 0.761 0.752 sY 0.262 0.856 0.862 sePRaC Deg 0.410 0.622 0.622 Medium predictive powerDnei 0.348 0.775 0.781 Dnes 0.358 0.750 0.747 sCoM 0.284 0.792 0.799 sLss 0.239 0.837 0.829 sn 0.279 0.817 0.796 sBPeRF eC 0.352 0.830 0.838 Medium predictive powerMsg 0.260 0.794 0.776 Pg 0.263 0.803 0.788 Re 0.246 0.849 0.864 sC 0.346 0.805 0.807 sg 0.293 0.782 0.769 18 E. ASTUTY ETAL. Based on the structural model testing results, researchers obtained an Empirical model of Indonesia’s Micro-Business Sustainable Business Performance, as presented in Figure 3. 4.2. Discussion 4.2.1. Substructure equation-1 (sustainable business performance prediction model) Based on an empirical model of sustainable business performance, the author analyzes the sub-structure of the mathematical equations in the model as follows: Sustainable Business Performance Sustainable Resilie = 0 389.nnce Strategy Sustainable Entrepreneurship Practices +0 461. ++ 0 030. Digital Technology Adoption (1) With value: SRS SBPERF t stat 5 p value f → −= − = = , .; .; .883 0 000 0 275 2 SEPRAC SBPERF t stat 6 p value f → −= − = = , .; .; .557 0 000 0 367 2 DTA SBPERF t stat ns p value ns f → −= () −= () = , . ; . ;.0 640 0 261 0 001 2 R 2 0 590 =. The mathematical equation in substructure-1 shows that three factors have a significant impact on improving sustainable business performance (SBPERF): sustainable resilience strategies (SRS), sustainable entrepreneurial practices (SEPRAC), and digital technology adoption (DTA). SEPRAC is the most influential factor, with a path coefficient value of 46.1% and an effect size (f2) of 36.7%, classified as a ‘large effect’ (Hair et al., 2011). This large effect means that when the exogenous SEPRAC construct is removed from the model, it will have a substantive impact on the endogenous construct (SBPERF) in the form of a decrease in the R2 value (this study shows a decrease to 48% or model strength decreases by 11%). The model’s strength is 59%, categorized as an ‘almost strong model’ (Chin, 1998) or ‘moderate’ (Hair et al., 2011) with ‘medium predictive power’ (Shmueli etal., 2019). Overall, the SBPERF prediction model reveals that these three factors can significantly contribute to improving sustainable business performance. Based on confirmatory factor analysis in the measurement model, SBPERF can be measured by two types Figure 3. empirical model of indonesia’s Micro-Business sustainable Business Performance. COGENT BUSINESS & MANAGEMENT 19 of benefits: economic and non-economic (Le, 2022; Shepherd and Patzelt, 2011). Economic benefits include sales growth, profit growth, and market share growth over time. Non-economic benefits include efficient use of resources, increased environmental efficiency, and social welfare contributions over time. The trigger factor for increased SBPERF was confirmed to be 59% based on the determination of SRS and its implications for SEPRAC and DTA. To increase their resilience, micro-business can adopt sustainable resilience strategies (SRS) with four key characteristics. Firstly, they must find creative ways to deal with crises and focus on their survival (Branicki et al., 2018; Liu et al., 2022). Secondly, synergize, they should work with stakeholders to navigate through crises (Alberti et al., 2018). Thirdly, they should stay connected to market developments and maintain business continuity (Branicki et al., 2018; Heizer et al., 2020), one of which is by utilizing digital technology. Lastly, they should re-orient their input, process, and output to meet environmental change demands (Branicki etal., 2018; Heizer etal., 2020), such as fulfilling the Sustainable Development Goals (SDG) in the 2030 agenda (The Ministry of National Development Planning, 2015). By embodying these four characteristics, micro-business can become more resilient and better equipped to face environmental changes and crises. SEPRAC is a trigger that can significantly improve SBPERF, with an empirical confirmation of 46.1%. It refers to entrepreneurial activities that have two missions: ‘must be sustainable’ and ‘must be developed’ (Shepherd and Patzelt, 2011). Must be sustainable, among others: 1) Sustain Nature (SN), preserving nature, the earth, the diversity of living creatures, or ecosystem; 2) Sustain Life Support Sources (SLSS), preserving the environment that supports human life such as reducing plastic waste, pollution, marine, river life; and 3) Sustain Communities (SCOM), preserving local wisdom, history, norms, or cultural values (Shepherd and Patzelt, 2011). Must be developed, among others: 1) Develop Economic Gain (DEG), means developing the economy of business actors and the surrounding community; 2) Developing Non-Economic Gain for Individuals (DNEI), such as education, gender equality, survival, or life expectancy; and 3) Developing Non-Economic Gain for Society (DNES), such as social ties, regional welfare, and security (Shepherd and Patzelt, 2011). On the other hand, By understanding and embodying these aspects, micro-business can enhance their SEPRAC and improve their SBPERF. The adoption of digital technology is the final trigger in the substructure-1 model that can benefit micro-business. This refers to using digital technology (digitization) in business to create new business models, generate income, and add new value (Urdu et al., 2019). By adopting digital technology, micro-business can significantly improve their overall business performance and take advantage of new opportunities. 4.2.2. Substructure equation-2 (digital technology adoption prediction model) The prediction model for digital technology adoption (DTA) in Indonesian micro-businesses indicates that establishing a sustainable resilience strategy (SRS) is highly likely to trigger DTA in their business processes. The study showed that the effect of SRS is relatively high, at 63.5%. The effect size (f2) of SRS on DTA is significant, with a 67.2% increase, which is considered a ‘large effect’ scale (Hair et al., 2011). Digital Technology Adoption Sustainable Resilience S = 0 635.ttrategy (2) With value: SRS DTA t stat 16 p value f → −= − = = , .; .; .047 0 000 0 672 2 R 2 0 402 =. Micro-business can improve their competitiveness by adopting digital technology. This involves meeting digitalization prerequisites such as having access to the internet and its devices (Urdu et al., 2019), and integrating digital technology into various business operations including production, marketing, sales, customer service, product development, knowledge management, supply chain management, and decision-making (Jha et al., 2022, Al-Allak, 2010; Lang et al., 2022; Ristyawan, 2020; Sharma et al., 2022; Tamvada et al., 2022). Several micro-businesses in Indonesia have adopted digital technology effectively by ensuring the availability of internet access/network and computer/mobile devices connected to the internet in their work environment 20 E. ASTUTY ETAL. (Urdu et al., 2019). They have also utilized digital technology in their business sales and marketing activities (Jha etal., 2022; Tamvada etal., 2022), service activities for customers who already use digital technology (Jha et al., 2022); and for searching for innovation ideas and product development. Furthermore, they have accurately made business decisions by utilizing data obtained from digital technology (Al-Allak, 2010; Ristyawan, 2020). Other digital technology adoption characteristics that have been realized in these micro-businesses include the existence of knowledge management activities in the work environment related to business, products, processes, and services assisted by the use of digital technology (Jha et al., 2022), and the realization of business supply management processes using digital technology (Al-Allak, 2010). 4.2.3. Substructure equation-3 (sustainable entrepreneurial practices prediction model) The Sustainable entrepreneurial practices (SEPRAC) prediction model is a tool used to better understand the factors that influence the implementation of SEPRAC in micro-business. According to the model, there are several key factors that can have a significant impact on SEPRAC implementation. Specifically, the model identifies micro-business’ orientation in facing the challenges of SDG as the most significant factor, accounting for 55.6% of the overall influence. In addition, the model identifies SRS and DTA as important contributing factors, accounting for 19.9% and 5.9% of the overall influence, respectively. The model strength, which measures the degree of influence of these factors on SEPRAC implementation, is rated at 51.8%. This rating is considered ‘almost strong’ (Chin, 1998) or ‘moderate’ (Hair et al., 2011), indicating that the identified factors have a significant impact on SEPRAC implementation, but that there may be other factors that also play a role. Overall, the SEPRAC prediction model provides valuable insights into the key factors that micro-business can focus on in order to successfully implement sustainable entrepreneurial practices. Sustainable Entrepreneurship Practices SDG Challenge = 0 556.ss Orientation Sustainable Resilience Strategy + + 0 199 0 059 . . Digital Technology Adoption (3) With value: SDGCO SEPRAC t stat 9 p value f→ −= − = =, .; .; .955 0 000 0 423 2 SRS SEPRAC t stat 3 p value f→ −= − = = , . ; .; . 029 0 001 0 075 2 DTA SEPRAC t stat 1 ns p value ns f→ −= () −= () =, . ; . ;.134 0 128 0 004 2 R 2 0 518= . There were three antecedents to SEPRAC. The most influential one, confirmed by 55.6%, is the orientation of micro-business towards fulfilling the SDGs. This orientation integrates social and environmental considerations into business operations and shows an organization’s readiness to adopt sustainability-based initiatives (Horak et al., 2018). A comprehensive sustainability orientation generates awareness, confidence, and intelligence related to existing and future opportunities for social, environmental, and economic progress (Horak et al., 2018) and law and governance (The Ministry of National Development Planning, 2020). This effect size is categorized as ‘large effect’ (Hair etal., 2011) and has a value of 42.3%. 4.2.4. Substructure equation-4 (sustainable resilience strategy prediction model) The substructure-4 mathematical equation identifies key factors that influence the determination of SRS. Expressly, 15.6% of EO, 44.1% of EC, and 19.1% of SDGCO have been confirmed as influential. Sustainable Resilience Strategy Entrepreneurial Orie = 0 156.nntation Entrepreneurial Competence SDG Challe + + 0 441 0 191 . . nnges Orientation (4) COGENT BUSINESS & MANAGEMENT 21 With value: EO SRS t stat 2 p value f→ −= − = =, .; .; .314 0 010 0 022 2 EC SRS t stat 4 p value f→ −= − = =.; .; .535 0 000 0 155 2 SDGCO SRS t stat 2 p value f → −= − = = , .; .; .506 0 006 0 037 2 R 2 0 502 =. The model strength is 50.2%, which is considered to be either ‘almost strong’ (Chin, 1998) or ‘moderate’ (Hair et al., 2011). It is important to note that the influence of these variables on the endogenous varies at different levels. From the SRS prediction model, EC has a moderate effect size, while the effect size of both EO and SDGCO is small (Hair et al., 2011). Entrepreneurial competency is based on personal attributes and influenced by the surrounding socio-cultural environment (Man and Lau, 2000). To achieve effective and outstanding performance (Boyatzis etal., 2002), entrepreneurs must have the knowledge and skills to seek out opportunities, take risks and turn ideas into reality (Kuratko, 2011). There are six competency areas that contribute to entrepreneurial success: opportunity, relationship, conceptual, organizing, strategic, and commitment competencies (Man and Lau, 2000). In Indonesia, several micro-businesses have shown measurable and reliable entrepreneurial competencies. They always look for business opportunities through promotional and marketing activities, build and maintain relationships with customers, partners, and business associations, consider various points of view when searching for solutions to a business problem, prepare plans, allocate resources, and supervise business processes, determine business goals formally and flexibly, and uphold business commitment firmly during times of crisis and tight competition. Entrepreneurial Orientation refers to the intentions, actions, and decision-making activities involved in entrepreneurship, including processes and practices that lead to the entrepreneurial process. It also describes the strategy-making processes and styles of companies engaged in entrepreneurial activities (Lumpkin and Dess, 2001). A confirmatory factor analysis showed that several micro-businesses in Indonesia exhibit the characteristics of EO. These include autonomy, which is demonstrated by the independence of micro-businesses in turning their ideas into reality. Innovativeness is another characteristic exhibited by micro-businesses, as they regularly release new products. Risk-taking is also a common characteristic among micro-businesses, as they are willing to make high-risk decisions to pursue their goals. Additionally, micro-businesses are proactive in all situations, taking the initiative rather than waiting for opportunities to arise. Lastly, they exhibit competitive aggressiveness, aggressively seizing market opportunities and other potential opportunities. 4.2.5. Micro-businesses sustainable resilience strategy is the key driver to success in digital technology adoption and sustainable entrepreneurial practices It is crucial for a company to align its internal resources with determining its business strategy to build potential business resilience. Empirical evidence has confirmed that Sustainable Resilience Strategy (SRS) can be the key to the success of micro-businesses in Indonesia in adopting Digital Technology Adoption (DTA) and realizing Sustainable Entrepreneurship Practices (SEPRAC). The four dimensions of a sustainable resilience strategy are survival, continuity, reorientation, and synergy. 4.2.5.1. Survival. It’s interesting to see how the COVID-19 pandemic crisis has affected business actors. According to the author’s research, not all business actors have been able to continue their businesses in the last three years. However, those who have been successful are the ones who have found creative ways to deal with the crisis (Branicki et al., 2018; Liu et al., 2022). For instance, ‘Ibu Binangkit’ (not her real name) is a micro-business actor who produces traditional cakes in Bandung City. Since most of her sales come from offices and schools, which were closed due to the pandemic, she had to come up with alternative ways to sell her products. One of the ways she did this was by offering online cooking classes to schools. She would send her products to the students’ homes before the lesson schedule, and during 22 E. ASTUTY ETAL. the lesson, she would join online Zoom as a facilitator. Mrs. Binangkit also offers her products to event organizers who provide wedding party services during the crisis. Her cake products are packaged in hamper form and distributed to guests who attend according to predetermined health protocols. 4.2.5.2. Synergy.The COVID-19 pandemic crisis has affected many businesses in the past three years. To survive, micro-businesses need to interact with stakeholders to produce a harmonious balance in achieving optimal results (Alberti et al., 2018). In-depth interviews with several micro-businesses actors and special interviews with the head of Bandung Regency MSMEs confirm that not all MSME actors have succeeded in continuing their business. However, some micro-businesses have managed to survive the crisis by exploring various collaborations to support their business operations. One way micro-businesses are adapting is by replacing conventional payment systems with financial technology. They are using mobile finance, including QR codes, e-wallets, mobile banking, and more. This shift has been crucial in enabling micro-businesses to continue operating throughout the pandemic crisis. In addition to financial technology, micro-businesses have also collaborated with online transportation services for product delivery. This collaboration has enabled micro-businesses to overcome the logistical challenges posed by the pandemic and deliver their products to their customers. Furthermore, the author recorded other forms of synergy, such as that carried out by a startup owner with the initials ‘KS’ who was successfully fostered in a science and technology park developed by a university. These collaborations have been instrumental in enabling micro-businesses to survive during the pandemic crisis, and they highlight the importance of exploring various collaborations to support business operations. During the in-depth interview, KS revealed that the success of the startup he built was highly dependent on his ability to create conducive synergies with several other business units. His company provides an application that connects consumers with several business units providing household waste processing services, laundry service providers, catering service providers, and others. Using the app, consumers can order services, and notifications will go to both the KS business unit and the waste processing business unit. The waste will then be picked up at the consumer’s address, and the ‘value’ of the waste will be paid to the consumer by the waste processing business when picking up the waste, according to applicable regulations. From this one transaction, the KS business unit gets a fee, consumers get payment for the value of the waste, and the waste processing business unit gets raw materials, which are then processed into recycled products to be resold through recycling shop outlets and online stores that are also connected to the managed apps by KS. Thanks to this synergy, KS’s business has now been running for three years and eight months, and the number of employees has reached seven people. KS is currently still studying at a university that provides a science and technology park and is in the seventh semester. Soon, he will be preparing for his final undergraduate assignment. This example shows how collaborations among different business units can bring significant benefits for all parties involved. By creating an innovative solution that connects consumers with various services and products, KS has been able to establish a successful business that contributes to sustainability efforts. 4.2.5.3. Continuity. In the face of changes that can affect their operations, companies must strive to maintain continuity by strengthening their internal connections and external partnerships (Branicki et al., 2018). This is especially true for micro-businesses, who often rely on networking in online and offline communities to maintain the continuity of supply and demand for their products. They admit that networking with various stakeholders has been instrumental in helping them navigate changes in the social, economic, and technological environment. They are greatly helped by events managed by various stakeholders that allow them to maintain demand for their products, even during times when demand is low. To maintain continuity, they must continue to update themselves and improve their social networking capabilities through various online and offline platforms. By doing so, microbusinesses can not only get orders but also other important information, such as the fulfillment of raw materials and access to business development training. This approach enables micro-businesses to remain competitive and adapt to changes in the marketplace, which is essential for their long-term success. Re-orientation is a crucial aspect of a company’s ability to respond positively to changes in the external environment (Branicki et al., 2018). Several micro-businesses actors who were successfully interviewed by the author have started responding to the changing needs of the market by providing ‘healthy food’ options. To achieve this, they have started replacing wheat flour with modified cassava flour (mocaf flour). Mocaf is a flour product made from cassava that is fermented by lactic acid bacteria. The fermentation process changes the characteristics of the flour produced, making it suitable for use as raw material for various high-nutrition, low-calorie food products. In addition to mocaf, some micro- COGENT BUSINESS & MANAGEMENT 23 businesses have also started using ‘sorghum’ to replace wheat flour as a raw material for health food products. They understand that consuming excessive amounts of wheat flour can result in excess sugar accumulation, which can be harmful to health in the long term. By offering healthier options, they are responding to changing market demands and positioning themselves as providers of nutritious food products. This re-orientation is essential for micro-businesses to remain competitive and meet the evolving needs of their customers. 4.2.6. Digital technology adoption by Indonesian micro-businesses has not significantly improved sustainable entrepreneurial practices and business performance The author interviewed various micro-business actors in Indonesia from and outside the science and technology park. They all explained that the adoption of digital technology has yet to directly impact sustainable entrepreneurial practices or business performance for most micro-businesses. Their answers were similar in pattern, indicating that: (1) Business owners need to optimize the adoption of digital technology. Most micro businesses have not yet implemented digital technology in their supply chain processes, as well as production activities in the internal supply chain area. Almost all digital technology uses are limited to marketing, sales, and customer relationship management activities; (2) The digital technology used by micro-businesses in Indonesia is still mainly oriented towards economic benefits, with non-economic benefits still needing to be fully promoted through the adoption of digital technology. As a result, it does not trigger the realization of sustainable entrepreneurial practices. 4.2.7. Opportunities and challenges sustainable businesses in micro-business of craft, fashion, food and beverage creative industry sectors The research was conducted on micro-businesses of craft, fashion, food and beverage creative industry sectors in Indonesia. The following are sustainable business opportunities: (1) Healthy food business. With the widespread availability of education on social media, people are becoming more aware of healthy lifestyles. It has led to a shift towards consuming healthy food. Micro-businesses can take advantage of this trend by providing healthy food options that are low in calories and high in nutrition; (2) Outsourcing of IT administration. The adoption of digital technology could be more optimal in micro-businesses. Although they have received training on using information technology-based applications, they need help implementing them. Micro-businesses need admin staff to focus on their core business activities, such as marketing, sales, and customer relationship management; (3) Waste recycling business. Recycling waste is a lucrative business opportunity for micro-businesses. However, they need scientific contributions and technology transfer from researchers or scientists from research institutions or higher education institutions; (4) App developers. Developing apps can facilitate the community’s management of household waste. The app developer can mediate between waste recycling businesses, waste transportation services, and the community; (5) Local wisdom and environmentally friendly products. Micro-businesses can innovate and create new environmentally friendly products based on local wisdom. Challenges for developing sustainable businesses for micro-business actors, industry, and higher education institutions as well as science and technology park management: (1) Micro-businesses need guidance regarding digital technology adoption that carries the mission of green digital technology adoption not only in the downstream area but also upstream and internal supply-chain in the business unit’s supply chain flow; (2) Micro-businesses need research findings or technology transfer related to substitute products or alternative raw materials based on local wisdom and environmentally friendly products. For micro-businesses, environmentally friendly products are ‘EXPENSIVE’ in their raw materials. It differs from the perspective of waste recycling business actors who state that the waste processing business opportunity has much potential and is profitable; (3) Local wisdom does not have to be original but can be innovated into something unique and of high value and can even be presented in modern ways. It requires a separate construct, namely sustainable innovation which is capable of producing valuable, rare, and inimitable products so that companies become very passionate and organized in achieving the value of this innovation; (4) The public has begun to become aware of the issue of sustainability. However, the production management costs to achieve this are considered very expensive; (5) Export policy