How to Business Model Innovation Bridges the Gap Between Digital Transformation and Performance?

Abstract

The development of digital technology has an impact on the development of the business world, including businesses in the creative economy. Businesses in the creative economy have the prospect to grow because they are supported by digital transformation. This study aims to examine the role of business model innovation in mediating the relationship between digital transformation and sustainable business performance. This research is a quantitative research using a sample of 210 respondents of creative economy actors in the city of Semarang. The variables used include technological competencies, Big data analytics (BDA) capabilities, Internet of Things (IoT) capabilities, Business Model Innovation (BMI), and sustainable performance. The analytical methods used are Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM). The results show that technological competencies and business model innovation have a significant effect on sustainable performance. Internet of things capabilities directly have a significant effect on sustainable performance. Meanwhile, big data analytics capabilities directly have no significant effect on sustainable performance. Then business model innovation is proven to be able to mediate the influence of internet of things capabilities and Big Data Analytics capabilities on sustainable business performance. Theoretically, the implications that can be given in this research are the contribution of considerable insights for researchers, especially regarding digital transformation and sustainable business performance in the creative economy. This research also provides managerial implications for business actors, especially in the creative economy that to improve sustainable business performance, they must have the ability to access technology and optimize digital transformation.