The Passage to Success Soft Skills, Market Orientation Dan Digital Literacy in Supporting Business Sustainability of Food and Beverage Micro Small and Medium Enterprises in Surabaya

The Passage to Success Soft Skills, Market Orientation Dan Digital Literacy in Supporting Business Sustainability of Food and Beverage Micro Small and Medium Enterprises in Surabaya

Tony Susilo Wibowo*, Noerchoidah

Universitas PGRI Adi Buana Surabaya

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2024.8120253

Received: 14 December 2024; Accepted: 17 December 2024; Published: 16 January 2025

ABSTRACT

The role of MSMEs in driving the post-pandemic economy at the national and provincial levels is quite significant. Surabaya City Government strongly supports the development of MSMEs by providing facilities and guidance, such as places to sell at culinary tourism centres and various skill development programs for MSME business actors to improve competencies and soft skills that support business sustainability.

This study aims to determine the role of soft skills, market orientation, and digital literacy in supporting the sustainability of food and beverage MSME businesses in Surabaya City. The sample was taken using a saturated sample technique aimed at MSMEs that run their businesses in the culinary tourism center as many as 80 MSMEs. Data was obtained by instruments filled in via google form and manually filling out the questionnaire directly. Furthermore, it was analyzed using multiple linear regression, which previously carried out a data feasibility test. Descriptively, it was found that the majority of MSME players were women with the latest Bachelor’s education, and the results of regression analysis found that soft skills, market orientation, and digital literacy positively played a role in supporting the sustainability of food and beverage MSME businesses in Surabaya City. In line with the results of the study, it is recommended that food and beverage MSME players should further improve their soft skills and have insight into digital literacy so that they can keep up with technological developments, as well as market orientation that must always be present in MSME players in supporting business sustainability.

Keywords: soft skills, market orientation, digital literacy, business sustainability, MSMEs.

INTRODUCTION

Economic recovery after the COVID-19 pandemic requires the support of various stakeholders, such as the government, the private sector and the community, where Micro, Small and Medium Enterprises (MSMEs) are the spearhead in driving the economy. MSMEs support the economy in times of crisis and are flexible and adaptable to survive and thrive amid challenging economic conditions. During a crisis, MSMEs help maintain community welfare by ensuring that economic activity continues, making MSMEs an important driver and stabilizer in the national economy (Tedjasuksmana, 2014). MSMEs are one of the driving forces of the country’s economy with a significant contribution.

The role of MSMEs is crucial and strategic in the structure of the national economy, as seen from the contribution of 60.5% to the Gross Domestic Product (GDP), 96.9% impact on national employment, and exports increased by 15.69%. Nationally, the economic structure is dominated by micro-enterprises, reaching 99% and small and medium enterprises (SMEs) whose contribution is relatively small, while large industry players contribute around 1% (Limanseto, 2022). This contribution will continue to grow in 2023. The contribution to GDP is 61%, valued at Rp9,580 trillion; employment reaches 97% of the total workforce and has 65.5 million MSMEs, which is 99% of all business units (Limanseto, 2023).

In the provincial scope, the contribution of MSMEs to GRDP in East Java has consistently increased, in 2022 with an increase of 0.55% compared to 2021, and in 2023, contributed 59.18% to GRDP. The nominal amount of MSME contributions to GRDP in 2021 was IDR 1,418.9 trillion and increased to IDR 1,593.67 trillion in 2022. (KominfoJatim, 2024a). For Surabaya City, the number of MSMEs in 2022 reached 1,716,440 units, concentrated in agriculture as many as 10,521 units, while non-agriculture was 1,705,919 (Diskopukm, 2022). In 2023, MSMEs in Surabaya that had a Business Identification Number (NIB) increased by 30% from 2022, and the Surabaya City Government’s e-peken application entered the top 5 marketplaces that had the most considerable turnover (Mahendra, 2024). Furthermore, in 2024, the number of NIBs that have been issued in Surabaya City is 113,169, with the trade sector totaling 65,070, then 24,561 in the industrial sector and 23,538 in the tourism sector (KominfoJatim, 2024b).

The illustration above shows that the government strongly supports the development of MSMEs in Surabaya City, especially in the food and beverage business sector. However, the current situation is different from what many parties expect, where several culinary tourism centers are empty of buyers due to weak marketing (Faiq, 2024). The research on market orientation concluded that market orientation has a positive but insignificant effect on marketing performance (Utami et al., 2022). Other research suggests that MSMEs can improve operational performance by developing marketing strategies by paying attention to market orientation (Puspaningrum, 2020). In this sense, the development of MSMEs requires the proper market orientation, such as customer orientation and competitor orientation, to compete and develop.

Purpose of Research

This study aims to determine and analyze the role of soft skills, market orientation, and digital literacy in supporting the sustainability of MSMEs in the food and beverage sector in Surabaya.

Problem Statement

This study aims to determine and analyze the role of soft skills, market orientation, and digital literacy in supporting the business sustainability of MSMEs selling food and beverage products in Surabaya City.

This research seeks to answer the following questions.

1. How does the partial influence of soft skills, market orientation, and digital literacy affect the sustainability of MSME businesses selling food and beverage products in Surabaya City?
2. How do soft skills, market orientation, and digital literacy influence the sustainability of MSME businesses that sell food and beverage products in Surabaya City?

LITERATURE REVIEW

Soft skill

The success of MSMEs must be distinct from the ability of adequate human resources reflected in soft skills. In general, soft skills are defined as abilities beyond technical and academic abilities, which prioritize intra- and interpersonal abilities (Prastiwi, 2016). Soft skills can take the form of character, attitude and behavior and not technical ability or intangible knowledge referring to personality (Robles, 2012). In supporting a business on an MSME scale, especially those engaged in food and beverages, soft skills are needed more so in a modern era where consumers not only need quality goods at affordable prices but also want to get excellent service from business actors.

The diversity of consumer needs and their behavior must be addressed appropriately through soft skills owned by business actors, such as a polite attitude in providing services, smiling, and being friendly. Adnyani et al., (2021), state that Soft Skills are skills related to other people, including the values adopted, motivation, behavior, habits, character, and attitudes inherent in the individual. The results of research by Makdissi et al., (2024) prove that soft skills such as leadership, communication, emotional intelligence, and problem-solving positively impact the financial metrics of SMEs, which leads to improvements in revenue, profit, operational efficiency, and customer satisfaction.

Market Orientation

Improvements in revenue and business profits can be strengthened by a market orientation that pays attention to consumer behavior. By understanding consumer behavior, businesses will be able to achieve not only substantial but also sustainable advantages in running a business. Business actors who can create sales and get more profit than their competitors will be able to increase dynamic market orientation (Didit Darmawan, Rahayu Mardikaningsih, 2017). Market orientation is a concept that focuses on increasing customer value and maintaining it through employee development and the use of market information (Narver & Slater, 1990).

Market orientation is one of the focuses of attention in business activities; market orientation can be referred to as an action that business actors must take to create superior customer value by making consumers the center of attention (David W. Cravens, 2012). Market orientation is also said to be a tool for creating services and products that not only meet but exceed a consumer’s expectations (Gardi & Darmawan, 2022). Market orientation that focuses on understanding customer needs and preferences will positively affect business performance (Hariani, 2022). This opinion is supported by Arafat et al., (2021) which states that market orientation is the main driver for MSMEs to grow and develop sustainably. Similar research was revealed by Widyaningsih et al., (2018) which suggested that market orientation and product innovation positively and significantly affect marketing performance.

Digital Literacy

Business performance supported by a good marketing program can encourage MSME business actors to increase competitiveness. Increasing competitiveness can also be done by adopting appropriate information technology tools and software as a form of corporate innovation. Adjusting the innovation strategy will affect business sustainability (Carayannis et al., 2015). MSMEs only rely on products without seeing and knowing the capabilities that should be owned, such as adopting social media well, being able to use an increasingly diverse marketplace, and mastering digital marketing. For this reason, innovation in the form of business digitalization is a feasible strategy (Padilah et al., 2021).

MSME business actors must follow changes and adapt to environmental conditions as part of digital literacy. Digital literacy refers to a person’s ability, in this case, MSME entrepreneurs, to use digital technology properly in matters such as data collection, communication, collaboration, data search, and evaluation per technological developments (Arifudin, et al, 2022). Digitalization is a challenge for MSME performance due to the need for more ability to utilize digital technology in marketing products or services due to limited infrastructure and unskilled labor (Rosa et al., 2022). Studies prove that strengthening digital technology in small businesses can strengthen economic sustainability and minimize uncertainty (Rvspk et al., 2020).

Business Sustainability

Business sustainability is a business activity that aims to achieve long-term performance; if a business is not managed correctly, it tends to move in place and has no clear direction (Puspitaningtyas Zarah, 2017).  Business sustainability can also be interpreted as a long-term effort to maintain its existence over time and downhill with the same leadership techniques so that it can maintain a product that feels sufficient and understands the management knowledge that the company already has (Naufal & Purwanto, 2022).

Business sustainability is closely related to performance improvement. Das et al., (2020) explained that in the context of MSMEs, collaborative working methods, government policies and facilities, and a supportive organizational culture positively affect business sustainability to achieve improved financial performance. In current conditions, business actors are required to keep up with technological developments; a digital-based business strategy (digital literacy) is needed to communicate and have unlimited access while still paying attention to soft skills oriented to the target market to maintain the sustainability of business activities.

RESEARCH METHODS

The study used a quantitative approach. The population of this study were business actors in the MSME category in the food and beverage sector in Surabaya City who had booths in the food and beverage tourism centers of Jambangan and Karah Sub-districts consisting of 80 food and beverage businesses serving Indonesian cuisine, which means that the food and beverages served are Indonesian taste menus. The sample in this study was taken using the saturated sample method for all food and beverage business people who sell and have booths in the culinary tourism centers of Jambangan and Karah sub-districts. The reason for choosing culinary tourism centers is that the Surabaya City Government has provided training programs and human resource development to food businesses and promoted locations on various social media. Data was obtained through questionnaires using Google Forms and filling out questionnaires directly on paper sheets.

In this study, soft skill indicators (Faizin et al., 2024) comprised creativity, communication skills, collaboration skills, and leadership. The second variable, namely the market orientation variable, uses indicators from Acosta et al., (2018), including customer-orientation, competitor-orientation, and inter-functional coordination. Meanwhile, digital literacy variables use indicators put forward by Reddy et al., (2020), which consist of information literacy, computer literacy, media literacy, communication literacy, visual literacy, and technological literacy. Furthermore, the business sustainability variable uses indicators put forward by Bocken et al., (2014), namely value proposition, value creation, and value capture.

The data collected from respondents was then processed with SPSS 26 to determine the effect between the variables analyzed and previously carried out data feasibility tests, including validity and instrument reliability and regression requirements tests.

RESULTS AND DISCUSSION

The profile of respondents in this study, most of whom are women, namely 66% and men 34%, with an age composition of less than 30 years 40%, 31 to 50 years 38%, and more than 50 years 23%. Then, for the level of education, MSME business actors with high school / vocational high school education amounted to 31%, 13% diploma, 50% bachelor, and 6% master. Other information related to the profile of respondents is primarily women, because they try to help the family economy by running a food and beverage business.

Furthermore, the validity test on the research instrument proves that all instrument items are declared valid with a value of more than 0.220 (N = 80). The validity test table is as below.

Table 1. Validity Test Result

The next test is the reliability test with a Cronbach’s Alpha value of 0.670, which is more than 0.6, so the coefficient value of the questionnaire used is reliable.

Table 2. Reliability Test Results

The test was continued with multiple linear regression tests with the results below.

Table 3. Multiple Linear Regression Analysis

In this table, a regression line equation with independent and dependent variables can be drawn as below:

Y = -693+ 0.35X₁+0,527X₂+0,567X₃

It can be interpreted that -693 symbolizes a constant value (a) so that soft skills, market orientation, and digital literacy are equal to 0 (zero). So, -693 embodies the value of the business sustainability variable. The following variable is soft skills, with a regression coefficient of 0.035. With this value, if soft skills experience an addition of 0.035, business sustainability experiences a similar increase in value. Nevertheless, the value of other independent variables remains. The following variable is market orientation, where a regression coefficient value of 0.527 is obtained. It can be interpreted that market orientation gets an addition of 0.527, and then business sustainability also results in a similar addition. However, the value of other independent variables does not change. The last variable is digital literacy, with a value of 0.567. If digital literacy gets an additional 0.567, business sustainability experiences a similar addition with the assumption that other independent variables remain.

In partial testing, soft skills in business sustainability had an insignificant effect. This can be explained by the fact that MSMEs already have the soft skills needed to carry out production and operational processes and often receive training from related agencies from the Surabaya City Government. On the other hand, the soft skills of food and beverage MSMEs are a positive trait in the form of friendliness and openness to others. This is one of the characteristics of the Surabaya community so that consumers think that all business actors have soft skills in running a business. In this study, respondents perceived that soft skills have become part of their daily activities and are inherent in the MSME business services. The results of this study contradict the findings presented by (Sarker and Al-Bluwi, 2021) , where soft skills can help create creativity and business success. In this study, creativity and business success are not only determined by soft skills. However, they can by hard skills and other factors, such as food offerings and innovation in the external appearance of food and beverage businesses.

The following partial test is market orientation on business sustainability, where the results obtained have a significant effect. Partial test explained that MSMEs with a market orientation can be more effective in identifying sustainable business opportunities that align with market demands, such as socially responsible behavior. These results align with the research proposed by Cuevas-Vargas et al., (2022), which explains that sustainable marketing orientation significantly impacts the sustainable performance of MSMEs. In the same study, company age strengthens the relationship between sustainable marketing orientation and sustainable performance. Other supporting research is presented by Al-Shuridah & Ndubisi, (2023), which states that marketing orientation significantly affects marketing performance. Marketing orientation in the context of this research includes the presentation of quality products, good customer service, and a satisfying purchasing experience. MSMEs that serve food and beverages at culinary tourism centers can pay attention to buyers’ wishes who are increasingly concerned about the quality and hygiene of food products and care for the environment by providing what buyers need. Understanding the wishes of buyers can strengthen business sustainability in the long term. The importance of business sustainability lies in business integration and appropriate strategies in facing challenges and the business environment.

Further testing on the digital literacy variable on the sustainability of food and beverage MSME businesses, the results obtained have a significant effect. The results of this study confirm the theory put forward by Perera et al (2016), which defines digital literacy as the capacity and alertness to apply existing digital technology in work while showing the right attitude towards digital learning. In this case, the learning carried out by food and beverage MSMEs in Surabaya City is the ability to optimize digital devices, which are then used to support business sustainability. The information literacy of entrepreneurs shows that food and beverage MSME entrepreneurs can manage information and sort information to support business sustainability. Food and beverage MSMEs in the Gerbangkertosusila region use mobile devices to manage information, especially those related to product presentation and the appearance of culinary products. They are inspired by the information they get from YouTube, Instagram, TikTok, and other social media, and they do not “swallow” the information raw but take a different approach to make it more useful.

CONCLUSION

Soft skills are non-technical skills that can support business sustainability if appropriately managed. The test results of this study prove that soft skills have an insignificant effect on business sustainability because every business actor already has the soft skills needed to serve customers and is part of the positive character of business actors, plus years of training carried out by related agencies and has a positive impact on the ability of entrepreneurs.

Market orientation owned by business people significantly influences business sustainability because marketing is the main factor in increasing sales, and sales directly affect business sustainability. Market orientation is related to creating consumer satisfaction and meeting their needs. Consumers who have been satisfied with the products provided by producers will return to use the products as part of complementary needs and, in the long run, can improve the marketing performance of MSMEs. Marketing in food and beverage MSMEs is very vulnerable to declining sales, so adequate market orientation can support business sustainability.

Digital literacy has a significant influence on business sustainability. With a behavioral theory approach, using digital devices can be part of entrepreneur behavior, leading to increased digital literacy. Increased understanding of food and beverage entrepreneurs on digital software and hardware has a positive impact on Company operations so that they can run more efficiently, and literacy can be one of the keys to supporting the sustainability of food and beverage MSME businesses.

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