MSME Digital Transformation: Development of a Business Model Based on Sharia Economic Principles
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Abstract
Digital transformation offers micro, small, and medium-sized enterprises (MSMEs) opportunities to expand market access and renew value creation mechanisms. However, technology adoption does not guarantee improved performance or alignment with Islamic economic principles. This study aims to formulate a conceptual framework for MSME digital business models that integrates digital capabilities, changes in business activities, and Sharia governance. The research questions address changes in value creation, delivery, and capture; potential tensions between digitalization and Sharia principles; and the development of model evaluation dimensions. The article adopts a conceptual approach through critical analysis and synthesis of literature on digital transformation, business model innovation, and Islamic fintech adoption. The synthesis indicates that the benefits of digitalization depend on the alignment of technology with organizational skills, strategy, and context. Furthermore, Islamic fintech acceptance differs conceptually from business model compliance, requiring separate evaluation. Based on these insights, the article proposes a framework connecting four dimensions: digital capabilities, business model configuration, Sharia governance, and business outcomes. Its novelty lies in distinguishing transformation capacity, changes in value mechanisms, normative criteria, and economic benefits. The theoretical contribution connects digital business model innovation with evaluation grounded in Sharia principles, while the practical contribution provides a foundation for technology investment planning and MSME support. The framework remains empirically unvalidated; future research should develop indicators, assess them with experts, and longitudinally test the relationships across different MSME categories.
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