Abstract

The emergence of social media platforms has brought about a significant change in marketing, allowing small businesses to effectively promote themselves within their communities. Small and medium-sized enterprises (MSMEs) operating in tourism hotspots stand to gain substantial advantages by acquiring a deeper understanding of advanced social media techniques. The primary objective of the present research is to investigate how social media literacy and innovation impact the development of tourism in Indonesia, specifically focusing on the role of MSMEs. To achieve this, a combination of quantitative and cross-sectional research methodologies was employed. Cross-sectional studies involve collecting a single set of data at a specific point in time, and in this case, participants provided responses through questionnaires. This method facilitates researchers in gaining insights into the viewpoints of the participants. The survey questionnaires were distributed among employees working in MSMEs within the Indonesian tourism sector. A total of 197 complete survey responses were gathered from participants. However, 24 surveys had incomplete responses and could not be included in the analysis. The data extracted from the remaining 173 questionnaires reveals a response rate of 70.90%. Structural Equation Modelling - Partial Least Squares (SEM-PLS) was employed for the analysis of the collected data. The outcomes of the analysis indicate a substantial impact of social media utilization on the innovation capabilities of MSMEs in Indonesia. Additionally, there exists a significant correlation between innovation and the performance of these MSMEs. Furthermore, the results highlight a noteworthy association between the performance of micro, small, and medium-sized enterprises and the progress of tourism development in the West Java province. These findings underscore the importance of social media as a driving force for innovation within Indonesia's MSME sector. They also emphasize the need for policy development aimed at encouraging and streamlining the adoption of social media platforms by MSMEs in the country. Enhancing digital literacy, broadening internet accessibility, and giving priority to research and development incentives should be central considerations for policymakers tasked with shaping public policy initiatives.