Surviving the Digital Era: Analyzing the Integrative Synergy of Digital Marketing Capability and Innovation Capability for the Business Sustainability of Indonesian MSMEs

Abstract

Small and Medium Micro, Small, and Medium Enterprises (MSMEs) represent the foundational anchor of the Indonesian economy, contributing over 60% of the national Gross Domestic Product (GDP). However, the contemporary landscape—characterized by rapid technological acceleration and volatile consumer preferences—poses unprecedented survival risks. This article analyzes how business sustainability can be systematically achieved through the dual leverage of Digital Marketing Capability (DMC) and Innovation Capability (IC). Integrating perspectives from Dynamic Capabilities Theory and recent empirical datasets within the Indonesian context, this paper reveals an essential structural nuance: digital marketing capabilities do not automatically guarantee long-term survival. Instead, their value is unlocked when paired with or channeled through robust innovation mechanisms.