This work is licensed under a Creative Commons Attribution 4.0 International License.
The Impact of Digital Transformation Strategies on Enhancing Innovation Capability Among Indonesian Startups
Corresponding Author(s) : Syifa Wulandari
Startupreneur Business Digital (SABDA Journal),
Vol. 5 No. 1 (2026): Startupreneur Business Digital (SABDA)
Abstract
Digital transformation has emerged as a critical driver of organizational sustainability and competitive advantage in increasingly dynamic and uncertain markets. This study examines how digital transformation strategies enhance innovation capability within the context of Indonesian startups, which operate in rapidly evolving and resource constrained environments. Adopting a qualitative exploratory approach, data were collected through semi structured interviews with founders, managers, and key decision-makers from multiple startups across Indonesia. The data were analyzed using thematic analysis to identify key patterns and relationships. The findings reveal that digital transformation significantly contributes to innovation capability through several in terconnected mechanisms, including technological integration, organizational learning, and data-driven decision making. In particular, organizational learning manifested through knowledge sharing, iterative improvement, and feedback integration emerges as a critical mediating factor that enables startups to effectively translate digital adoption into innovative outcomes. The results highlight that the strategic alignment between digital initiatives and organizational objectives plays a more decisive role than mere technological adoption. This study contributes to the literature by providing empirical insights into the processes through which digital transformation influences innovation capability in emerging startup ecosystems. It also offers practical implications for startup practi- tioners and policymakers in designing effective digital transformation strategies to foster sustainable innovation.
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- G. Vial, “Understanding digital transformation: A review and a research agenda,” Managing digital transformation, pp. 13–66, 2021.
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- S. Nambisan, “Digital innovation and international business,” Innovation, vol. 24, no. 1, pp. 86–95, 2022.
- J. Q. Dong and P. C. Verhoef, “Introduction to a research agenda for digital transformation,” A Research Agenda for Digital Transformation, pp. 1–8, 2024.
- M. Hennink and B. N. Kaiser, “Sample sizes for saturation in qualitative research: A systematic review of empirical tests,” Social science & medicine, vol. 292, p. 114523, 2022.
- V. Braun and V. Clarke, “Thematic analysis: A practical guide,” 2021.
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- I. P. Gustiah and H. Newell, “Enhancing human resource management efficiency through scalable blockchain networks with an adaptive ai approach,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 2, pp. 114–123, 2025.
- . Tebenko, N. Kutsai, M. Shashyna, O. Omelianenko, and I. Bakushevych, “Digital transformation in business: The impact of technology on efficiency, innovation and competitiveness.” 2024.
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- M. Xu, Y. Zhang, H. Sun, Y. Tang, and J. Li, “How digital transformation enhances corporate innovation performance: The mediating roles of big data capabilities and organizational agility,” Heliyon, vol. 10, no. 14, 2024.
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- S. Nambisan, M. Wright, and M. Feldman, “The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes,” Research policy, vol. 48, no. 8, p. 103773, 2019.
- X. Fan, Y. Wang, and X. Lu, “Digital transformation drives sustainable innovation capability improvement in manufacturing enterprises: Based on fsqca and nca approaches,” Sustainability, vol. 15, no. 1, p. 542, 2022.
- K. Lutfiyah, M. S. Maarif, Y. H. Asnawi, and L. D. Arsyianti, “Optimizing islamic boarding school edupreneurship through internet of things adoption and fuzzy analytical hierarchy process,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 1, pp. 1–12, 2025.
- A. Aldoseri, K. N. Al-Khalifa, and A. M. Hamouda, “Ai-powered innovation in digital transformation: Key pillars and industry impact,” Sustainability, vol. 16, no. 5, p. 1790, 2024.
- F. Xue, Y. Tan, and S. Anwar, “Innovation strategy, digital transformation and competitive advantage of manufacturing enterprises: evidence from china,” European Journal of Innovation Management, vol. 28, no. 8, pp. 3395–3417, 2025.
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- L. Arantes and J. J. Ferreira, “Innovative sustainability strategies and the role of digital transformation in organisations,” Corporate Social Responsibility and Environmental Management, vol. 32, no. 3, pp. 3088–3121, 2025.
References
G. Vial, “Understanding digital transformation: A review and a research agenda,” Managing digital transformation, pp. 13–66, 2021.
S. Kraus, S. Durst, J. J. Ferreira, P. Veiga, N. Kailer, and A. Weinmann, “Digital transformation in business and management research: An overview of the current status quo,” International journal of information management, vol. 63, p. 102466, 2022.
A. Mendoza-Silva, “Innovation capability: a systematic literature review,” European Journal of Innovation Management, vol. 24, no. 3, pp. 707–734, 2021.
S. Nambisan, “Digital innovation and international business,” Innovation, vol. 24, no. 1, pp. 86–95, 2022.
J. Q. Dong and P. C. Verhoef, “Introduction to a research agenda for digital transformation,” A Research Agenda for Digital Transformation, pp. 1–8, 2024.
M. Hennink and B. N. Kaiser, “Sample sizes for saturation in qualitative research: A systematic review of empirical tests,” Social science & medicine, vol. 292, p. 114523, 2022.
V. Braun and V. Clarke, “Thematic analysis: A practical guide,” 2021.
M. Rubio-Andr´es, J. Linuesa-Langreo, S. Guti´errez-Broncano, and M. ´A. Sastre-Castillo, “Tackling digital transformation strategy: how it affects firm innovation and organizational effectiveness,” The Journal of Technology Transfer, vol. 50, no. 5, pp. 1893–1918, 2025.
Y. Zhao, H. Xu, G. Liu, Y. Zhou, and Y. Wang, “Can digital transformation improve the quality of enter- prise innovation in china?” European Journal of Innovation Management, vol. 28, no. 3, pp. 1034–1060, 2025.
H. Halim, T. M. Kesuma, and M. R. Siregar, “Digital transformation strategy to optimize company per- formance,” Jurnal Manajemen Bisnis, Akuntansi Dan Keuangan, vol. 2, no. 2, pp. 189–200, 2023.
S. Li, L. Gao, C. Han, B. Gupta, W. Alhalabi, and S. Almakdi, “Exploring the effect of digital transformation on firms’ innovation performance,” Journal of Innovation & Knowledge, vol. 8, no. 1, p. 100317, 2023.
A. Abudaqa, R. A. Alzahmi, H. Almujaini, and G. Ahmed, “Does innovation moderate the relationship between digital facilitators, digital transformation strategies and overall performance of smes of uae?” International Journal of Entrepreneurial Venturing, vol. 14, no. 3, pp. 330–350, 2022.
C. Catal, G. Kar, and M. Zarali, “Strategic technological innovation investment: enhancing resilience in the age of digital transformation,” Journal of Innovative Digital Transformation, vol. 2, no. 1, pp. 50–72, 2025.
A. Zoppelletto, L. Bullini Orlandi, and C. Rossignoli, “Adopting a digital transformation strategy to enhance business network commons regeneration: an explorative case study,” The TQM Journal, vol. 32, no. 4, pp. 561–585, 2020.
C. Lukita, T. Handra, F. P. Oganda, and M. Laurens, “Data-driven innovation for circular digital economy in sustainable urban development,” IAIC Transactions on Sustainable Digital Innovation (ITSDI), vol. 7, no. 1, pp. 97–105, 2025.
Y. Yu, H. Zeng, and M. Zhang, “Digital transformation for supply chain collaborative innovation and market performance,” European Journal of Innovation Management, vol. 28, no. 6, pp. 2446–2468, 2025.
D. Nyl´en and J. Holmstr¨om, “Digital innovation strategy: A framework for diagnosing and improving digital product and service innovation,” Business horizons, vol. 58, no. 1, pp. 57–67, 2015.
I. P. Gustiah and H. Newell, “Enhancing human resource management efficiency through scalable blockchain networks with an adaptive ai approach,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 2, pp. 114–123, 2025.
. Tebenko, N. Kutsai, M. Shashyna, O. Omelianenko, and I. Bakushevych, “Digital transformation in business: The impact of technology on efficiency, innovation and competitiveness.” 2024.
L. Ma, X. Zhang, and L. Dong, “Enhancing sustainable performance: the innovative strategy of digital transformation leading green collaborative management,” Sustainability, vol. 15, no. 17, p. 13085, 2023.
Q. Aini, E. Sediyono, K. D. Hartomo, D. Manongga, U. Rahardja, I. Sembiring, and N. A. Santoso, “Relationship quality analysis using technology in the business sector,” in 2023 11th International Conference on Cyber and IT Service Management (CITSM). IEEE, 2023, pp. 1–6.
M. K. Nasrun, H. Susilo, and T. W. Afrianty, “Accelerating digital transformation through digital leadership: strategies for innovation, sustainability, and organisational performance enhancement,” BISMA (Bisnis dan Manajemen), pp. 264–291, 2025.
M. Xu, Y. Zhang, H. Sun, Y. Tang, and J. Li, “How digital transformation enhances corporate innovation performance: The mediating roles of big data capabilities and organizational agility,” Heliyon, vol. 10, no. 14, 2024.
J. A. Awad and R. Mart´ın-Rojas, “Digital transformation influence on organisational resilience through organisational learning and innovation,” Journal of Innovation and Entrepreneurship, vol. 13, no. 1, p. 69, 2024.
B. Liu, H. Zou, H. Qin, H. Ji, and Y. Guo, “An evolutionary game analysis of digital transformation of multiagents in digital innovation ecosystems,” Plos one, vol. 18, no. 7, p. e0289011, 2023.
F. Schiavone and N. Omrani, “Innovating responsibly: Exploring digital transformation and open innova- tion strategies,” Journal of Innovation Economics & Management, vol. 47, no. 2, pp. 1–14, 2025.
A. D. Garcia, A. M. Rosyid, M. Yusup, and M. Khasanah, “Product innovation of foodpreneurs towards customer loyalty,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 2, pp. 104–113, 2025.
T. S. Goh, J. Suteja, E. Erika, A. Simanjuntak, A. H. A. N. Karsa, and M. Angel, “Bibliometric analysis of the role of strategic management in food sustainability towards sdg2: Insights of free lunch program,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 1, pp. 13–25, 2025.
J. Yu, Y. Xu, J. Zhou, and W. Chen, “Digital transformation, total factor productivity, and firm innovation investment,” Journal of Innovation & Knowledge, vol. 9, no. 2, p. 100487, 2024.
S. Nambisan, M. Wright, and M. Feldman, “The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes,” Research policy, vol. 48, no. 8, p. 103773, 2019.
X. Fan, Y. Wang, and X. Lu, “Digital transformation drives sustainable innovation capability improvement in manufacturing enterprises: Based on fsqca and nca approaches,” Sustainability, vol. 15, no. 1, p. 542, 2022.
K. Lutfiyah, M. S. Maarif, Y. H. Asnawi, and L. D. Arsyianti, “Optimizing islamic boarding school edupreneurship through internet of things adoption and fuzzy analytical hierarchy process,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 1, pp. 1–12, 2025.
A. Aldoseri, K. N. Al-Khalifa, and A. M. Hamouda, “Ai-powered innovation in digital transformation: Key pillars and industry impact,” Sustainability, vol. 16, no. 5, p. 1790, 2024.
F. Xue, Y. Tan, and S. Anwar, “Innovation strategy, digital transformation and competitive advantage of manufacturing enterprises: evidence from china,” European Journal of Innovation Management, vol. 28, no. 8, pp. 3395–3417, 2025.
H. Jing and G. Qu, “How to promote open innovation in restricted situations? digital transformation perspective,” Kybernetes, vol. 53, no. 11, pp. 4615–4638, 2024.
L. Arantes and J. J. Ferreira, “Innovative sustainability strategies and the role of digital transformation in organisations,” Corporate Social Responsibility and Environmental Management, vol. 32, no. 3, pp. 3088–3121, 2025.