The Impact of Knowledge Management on Digital Innovation in Time of Covid-19 Pandemic: The Role of Digital Capability and Digital Orientation

Abstract

This study examines the relationship between knowledge management, digital capabilities, digital orientation, and digital innovation by focusing on small and medium enterprises (SMEs) in Indonesia during the COVID-19 pandemic. Data collection used survey data from SME managers during the period July to December 2021. Data analysis used Structural Equation Modeling with the Partial Least Square method by focusing on 247 managers. The findings in this study are that knowledge management has a positive effect on digital capability and digital orientation. Meanwhile, digital competence and digital orientation mediate the impact of knowledge management on digital innovation. These findings underline the importance of digitalization during periods of crisis for SMEs.