Abstract
Technological developments and digital transformation have created new challenges and opportunities for Micro, Small, and Medium Enterprises (MSMEs). Facing increasingly fierce competition, product innovation has become a key strategy for maintaining their existence and increasing their competitiveness. This study aims to analyze the product innovation strategies implemented by MSMEs and their impact on competitiveness in the digital economy era. The research method used is a qualitative approach with case studies of several MSMEs in the food and fashion sectors. The results show that MSMEs that are able to utilize digital technology in their product innovation processes tend to have a higher competitive advantage. Innovation strategies that are oriented towards consumer needs, the use of digital technology, and collaboration with various parties have been proven to increase competitiveness and business sustainability.
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