DIGITAL ENTREPRENEURSHIP DECISIONS IN INDONESIAN WOMEN-LED SMES: AN INTEGRATED SEM OF TRANSFORMATION, SKILLS, INNOVATION, AND BEHAVIORAL INTENTION

Abstract

The object of this research is women-led small and medium enterprises (SMEs) located in five sub-districts of Solo City, Indonesia. Women-led small and medium enterprises (SMEs) in Indonesia face unresolved gaps in understanding how digital transformation (BDT), hard and soft skills (HSS), and innovative digital ideas (IDI) to behavioral intention (BIu) and digital entrepreneurship decisions (DEDc). To address this problem, a comprehensive structural equation modeling (SEM) framework was employed to analyze the effects of BDT, HSS, and IDI on BIu and DEDc. Findings indicate that BDT strengthens BIu and directly drives the DEDc. In contrast, HSS and IDI significantly enhance BIu, serving as an essential construct that translates HSS and IDI into concrete decisions. BIu emerged as the principal determinant of digital entrepreneurship choices, underscoring that competency development and innovation must be complemented by measures that cultivate commitment, proactiveness, and strategic preparation. BDT, HSS, and IDI significantly bolster BIu, the primary DEDc driver, with BDT. The model explained 79.1% of BIu variance and 57.3% of DEDc variance, with strong predictive relevance (Q2 > 0.35). The underlying model explains a substantial share of variance in BIu and DEDc, confirming the robustness and validity of the employed constructs. These insights highlight that women-led SMEs can effectively implement and sustain digital initiatives under supportive policy frameworks and targeted training programs focused on leadership-driven transformation, comprehensive skill development, and ideation workshops. This SEM framework offers practitioners and policymakers a practical guide for prioritizing interventions that enhance digital readiness and entrepreneurial intention among women entrepreneurs in Indonesia and analogous emerging-market contexts

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