Digital Innovation and Entrepreneurial Success in the Philippine MSME Sector: Challenges and Opportunities

Abstract While digital tools are becoming more accessible in emerging economies, MSMEs in the Philippines are still unable to adopt them. The study aims to examine how digital innovation can help in the entrepreneurial success of the Philippine MSME sector by identifying the barriers and opportunities in digital adoption. Mixed-method approach of surveying MSME owners and interviewing industry experts. The survey was designed to determine how digital adoption. What types of digital tools are being used, and what barriers are perceived. Data analysis used statistical methods and thematic analysis. The findings indicate that while the MSMEs are becoming more digital embracing social media marketing, digital payment systems, and other digital tools, they have not leveraged the adoption of more advanced technologies such as cloud computing and ERP systems. To identify the leading obstacles to digital adoption, the first three were identified: cultural resistance, lack of technical expertise, and financial constraints. Other issues that prevent digital transformation from taking off in regional terms include infrastructure and regulatory issues. The study highlights the need for policy interventions and capacity-building programs, emphasizing changes in digital adoption barriers facing MSMEs. It is suggested that more access to digital tools at affordable prices, training, and raising awareness on the importance of digital innovation. Further research on longitudinal studies, industry-specific research, and cross-country research will be needed to better understand the effect of digital adoption on MSME performance.