Innovate to Survive: How Digital Literacy and Entrepreneurial Orientation Foster Innovative Work Behavior in Tiktok-Based Msmes

Abstract

Digital commerce has transformed the competitive landscape for MSMEs, requiring entrepreneurs to integrate technological competence with innovative behavior to respond to rapidly changing platform dynamics. In Indonesia, TikTok Shop offers new market opportunities; however, its algorithm-driven environment also requires continuous content experimentation, audience engagement, and strategic adaptation. This study examined the effects of digital literacy and entrepreneurial orientation on innovative work behavior among MSME entrepreneurs utilizing TikTok Shop. A quantitative research design was employed using data collected from 133 respondents selected through purposive sampling. The measurement and structural models were evaluated using partial least squares structural equation modeling (PLS-SEM) with SmartPLS. The findings showed that digital literacy positively influenced innovative work behavior, with a path coefficient of 0.465, while entrepreneurial orientation also demonstrated a positive but weaker effect, with a coefficient of 0.200. Together, these two predictors explained 39.9% of the variance in innovative work behavior. The results indicated that the ability to operate digital tools, interpret platform analytics, and adapt content strategies had a stronger influence on innovation than entrepreneurial orientation alone. However, the low average variance extracted (AVE) values suggested that several measurement indicators required further refinement. The study concluded that strengthening platform-specific digital literacy and entrepreneurial capabilities could support sustainable innovation among MSMEs.