Impact of Business Model Innovation and Dynamic Capabilities on MSME Sustainability Mediated by Creativity in West Jakarta

Abstract

Micro, Small, and Medium Enterprises (MSMEs) serve as a crucial role in driving the national economy. However, they continue to face significant challenges in maintaining business sustainability amid increasingly competitive markets and rapid digital transformation. To survive and grow, MSME owners must innovate and develop strong adaptive capabilities to respond to changing market conditions. This study aims to analyze the influence of business model innovation and dynamic capabilities on business sustainability, as well as examine creativity as a mediating variable among MSMEs in West Jakarta. The population of this research consists of MSME owners operating in the West Jakarta area. A purposive sampling technique was employed with criteria requiring MSMEs to have operated for at least one year and to employ a minimum of two workers. Data were collected through an online questionnaire distributed via Google Forms, resulting in 110 valid responses used as the research sample. Data analysis was conducted using PLS-SEM with the SmartPLS version 4. The findings reveal that all proposed hypotheses were accepted. Business model innovation and dynamic capabilities were found to have a positive and significant effect on both creativity and business sustainability. Creativity also demonstrated a positive and significant influence on business sustainability and was shown to serve as a significant mediating variable in the relationship between business model innovation, dynamic capabilities, and sustainability. These results highlight that innovation, adaptability, and creativity are essential factors in enhancing the sustainability of MSMEs in a competitive environment.