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This study aims to analyse business performance models through innovation and digitalization approaches.This research identifies how innovation and digitalization create competitive advantages for MSMEs in Indonesia, especially in Semarang City, Central Java.This research method uses a quantitative approach involving 115 MSME respondents.The results of this study indicate that innovation and digitalization can create a competitive advantage and business performance for MSMEs in Semarang City.The research results also show that competitive advantage is also a mediator of the role of innovation and digitalization in the business performance of MSMEs.Thus, to create an increase in the business performance of MSME managers in Indonesia, it is necessary to pay attention to the ability of business innovation and digitalization.This means that the higher and better the innovation and digitization are owned by MSMEs, the more they will be able to create a highly competitive advantage and influence business performance.
Putri et al. (Mon,) studied this question.