Comparative Study on Workforce Transformation Strategy and SME Policies in Indonesia and Malaysia

Abstract This study aims to compare efforts to digitise SMEs in Indonesia and Malaysia, particularly in the Central Java and Kuala Terengganu regions, especially in the cultural context and perceptions of SME owners, in terms of workforce transformation. Data were collected on the creative industry SMEs in Central Java and Kuala Terengganu, with a sample size of 241 at each location. The collected data were then analysed using the ANOVA difference test and the SPSS regression test. This study’s results prove differences in the levels of agile leadership, organisational ambidexterity and workforce transformation in SMEs in Central Java, Indonesia and Kuala Terengganu, Malaysia. Agile leadership and organisational ambidexterity have also been shown to positively and significantly affect workforce transformation. The results of this study contribute to improving the theoretical understanding of SME workforce transformation in Indonesia and Malaysia, particularly the development of academic science in management. In addition, this study also provides information, recommendations, and references to SME entrepreneurs related to strategic planning to optimise performance in maintaining the sustainability of their businesses. This study also provides a practical contribution as a reference for improving the performance of SMEs in Indonesia and Malaysia.