The Role of Innovation and Information Technology Capabilities in Increasing the Competitive Advantage of MSMEs Coffee Shops in Jakarta

This research is an explanatory research that aims to explain the role of innovation capabilities and information technology in increasing the competitive advantage of MSMEs in Coffee Shops in Jakarta. The population of this research is all MSMEs of Millennia-owned coffee shops operating in the Jakarta area. The sampling technique used is a purposive sampling technique that uses certain criteria as a requirement to be a research sample. The data collection instrument used was a questionnaire distributed online via Instagram and WhatsApp. There are 215 coffee shop entrepreneurs in Jakarta who are willing to participate in this research. By using partial least squares structural equation modeling (PLS-SEM) the data is processed and results are obtained which show that innovation capability has a positive impact on competitive advantage in MSME Coffee Shops. Likewise, the results of this study explain that the capability of information technology has a positive impact on competitive advantage in MSME Coffee Shops in Jakarta.

faced by business actors today is the problem of weak innovation capabilities which have an impact on weak competitive advantage (Mulyana, 2019). Innovation is one of the important factors in achieving product success (Rajapathirana & Hui, 2018). Innovation is the ability to combine production elements in a better way (Najafi-Tavani et al., 2018). This explains that without innovation, business actors will not be able to create a competitive advantage.
Besides innovation capability, information technology capability is another internal factor that can be a source of competitive advantage. Information technology capability is the ability of information technology as the company's ability to mobilize and deploy resources based on information technology in combination or incorporation with other resources and capabilities (Lin, 2017). This explains that information technology capabilities play an important role in creating a company's competitive advantage in particular on mobile technology. Mobile technology is developing very rapidly with competitive advantages that are flexible (Konisafa, 2020).
After the occurrence of Covid-19, researchers are interested in knowing the extent of the role of capability in increasing the competitive advantage of MSMEs in Coffee Shops in Jakarta. This research focuses on innovation capability, information technology capability and competitive advantage in MSME Coffee Shops in Jakarta. The purpose of this research is to be able to add empirical evidence, add to the literature, increase thinking skills, insight, and add information to be used as input by business actors (Sebastian Soelistiono, 2021).

Innovation Capability
Innovation Capability is the ability of an organization to develop and modify its products and technologies, or to create new products and technologies. Chi, (2021) states that the innovation capability of a company is the company's potential ability to position itself in an arena of modernization such as the development of new products, technology, and other advances that generate advantages for the company over its competitors. Pascual Fernández et al., (2021) state that there are seven supporting factors in building the innovation capability of a company, namely: human resource capabilities, use of technology, interaction with outsiders, marketing capabilities, new product development, production and operations capabilities, and research. and development. Referring to the theoretical understanding above, this research defines innovation capability as the ability possessed by business actors in creating and developing the latest quality innovations in a product and can overcome various challenges in the market. According to this study, the indicators used to explain the innovation capabilities of MSME Coffee Shops are improving the quality of existing products and developing unique new products.

Information Technology Capability Information
Information technology capability is the ability of information technology as a company's ability to mobilize and deploy resources based on information technology in combining resources with other capabilities (Lin, 2017). Guo et al., (2021) say that information technology capabilities are based on how management capabilities and human resource capabilities facilitate information technology investments, how information technology is used in internal communication and with suppliers, and the company's internet capabilities. According to Adamides & Karacapilidis, (2020) the measurement of indicators of information technology capability is the ability of a computer system, collection of computers and other related technologies within an organization to store, process, and convey information. Referring to the theoretical understanding above, this study defines information technology capability as the ability performed by business actors in creating value and achieving the desired goals by utilizing information technology supported by the available resources. According to this study, the indicators used to explain the information technology capabilities of MSME Coffee Shops are infrastructure, human resources and managerial capabilities.

Competitive Advantage
According to Kotler & Armstrong (2017), competitive advantage is an advantage over competitors that is gained by delivering greater customer value, through lower prices or by providing more benefits that match higher prices. Sulistiani (2014) explains that competitive advantage is a set of factors that distinguish a company from its competitors. To face this competition, the accuracy of the strategy carried out by the company is one of the key factors for the company's success (Rynaldo, 2021). According to Tamer Cavusgil et al., (2017) in measuring the company's competitive advantage, namely by using indicators of price, quality, delivery dependability, product innovation and time to market. Referring to the theoretical understanding above, this research defines competitive advantage as the ability possessed by business actors in superior performance compared to other business owners in the same market through competent resources. According to this study, the indicators used to explain the competitive advantage of MSME Coffee Shops are price, product, quality and delivery dependability.

The Influence of Innovation Capability on Competitive Advantage
In the coffee shop SME business world, superior innovation capabilities and the provision of new products what is interesting is the key in attracting consumers to buy products from the MSME Coffee Shop. The development of successful innovation will be the right strategy to maintain and improve the position of the product or service in the market. The uncertainty of external factors that occur makes business actors have to innovate to win the competition. Research conducted by Martin et al., (2017) reveals that the role of innovation capability is important so that companies are able to achieve their competitive advantage. According to research conducted by Rahmasari, (2021) shows that innovation has an impact and has an impact on increasing ability to face competitive advantage. H1: There is an effect of innovation capability on the competitive advantage of MSMEs in Coffee Shops

Effects of Information Technology Capabilities on Competitive Advantages Information
Technology capabilities for MSMEs in Coffee Shops are the key to success in carrying out digital transformation in managing business to facilitate consumers and increase consumer confidence. The higher the level of consumer confidence in transactions will lead to competition between MSME Coffee Shops. According to research conducted by Adietya et al., (2017) stated that adequate information technology will increase the competitive advantage of Coffee Shop SMEs. According to research conducted by (Shu Hung Hsu, 2017) who conducted research in Taiwanese companies, the results showed that there was a significant positive effect between information technology capabilities and organizational performance. Good information technology capabilities will increase the company's competitive advantage and will help the company to streamline the costs incurred. H2: There is an effect of information technology capability on the competitive advantage of SMEs in Coffee Shop

III. Research Method
This research is an explanatory research type, namely testing theories or hypotheses to strengthen or reject theories or results from existing hypotheses or previous evidence (Sugiyono, 2017). This study aims to examine the role of innovation capability and information technology capability in increasing the competitive advantage of MSMEs in Jakarta. This research was conducted in the city of Jakarta with the research population being all MSME Coffee Shops operating in Jakarta, namely 1000 MSMEs. By using the Slovin formula, it is known that the minimum number of samples needed is 200. In this study, the number of participating coffee shop SMEs is 215 SMEs.
For data collection, the data collection technique used is a questionnaire distributed via google form from March 23, 2022 to April 20, 2022. The data analysis technique used is the SmartPLS 3.0 system.  A total of 215 coffee shop SMEs were involved in this study. Based on the demographic profile, the majority of respondents are male (64.7%), aged 30-35 years (38.6%) and MSME Coffee Shop business 3-4 years (37.7%). Based on educational background, most of the respondents are undergraduate (43.7%), followed by professionals from private companies. The largest respondents consist of entrepreneurs (44.7%). The respondent's profile explains that they can answer every question in the questionnaire. Using SmartPLS3.0, a leading application for modeling partial least squares structural equations (PLS-SEM), the data are analyzed step by step as follows:

Results a. Measurement Models
Evaluation of measurement models or outer model tests aims to specify the relationship between latent variables and indicators -The indicators are as illustrated in Figure 1.  Figure 1, explains that there are 10 reflective indicators built to measure the latent variables of innovation capability, information technology capability and competitive advantage. In this study, the reliability test was carried out using composite reliability and Cronbach's alpha, while the validity test was carried out using convergent validity and discriminant validity according to the type of indicator used to measure the latent variable, namely reflective indicators.
According to Ghozali & Latan, (2015), the indicators used are reliable if the value of composite reliability and Cronbach's alpha is above 0.7 (Ghozali & Latan, 2015). Furthermore, the validity test was carried out using a loading factor. According to Ghozali & Latan, (2015) the indicator used is valid if the minimum item loading value is > 0.7. The results showed that all loading factor values were > 0.7 or higher, meaning that the correlation between indicators and constructs was valid (Ghozali & Latan, 2015). (see Table 4) In this study, two approaches were used to test discriminant validity. The first is to evaluate item loading and cross-loading to ensure that items load and measure the construct correctly (Leguina, 2015) while the second compares the square root of the mean variance extract (AVE) construct with the correlation coefficient between variables using Fornell and Larcker criteria ( Fornell & Larcker, 1981). As presented in Table 5, the AVE value was higher than the correlation coefficient between the variables, and the AVE value was higher than 0.5, indicating a significant discriminant validity of the measurement model.

b. Evaluation of Structural Models
Evaluation of structural models or inner model tests is proposed to determine the extent to which the relationship between latent variables is based on substantive theory (Ghozali & Latan, 2015). In this study, the assessment was based on the value of R square, Q2 for predictive relevance, t-test, and path coefficient. According to Chin, (2013) states that R squares for endogenous variables explain the predictive power of the proposed model where the values of 0.67, 0.33, and 0.19 respectively indicate that the model is strong, moderate, and weak. Based on the results, the proposed model is a moderate predictive model where changes in exogenous variables cause 49.4% changes in endogenous variables (see Table 6.). The evaluation is followed by a bootstrap procedure to evaluate the path value. The estimated value of the relationship between latent variables. The results of data analysis explain that each path coefficient of Innovation capability towards competitive advantage with a t value of 7.719 is greater than t table 1.960, meaning that there is a significant relationship between Innovation capability and competitive advantage. The results of data analysis explain that each path coefficient of information technology capability towards competitive advantage with a t value of 4.523 is greater than t table 1.960, meaning that there is a significant relationship between information technology capabilities and competitive advantage. Furthermore, for the goodness of fit, the proposed model is assessed whether the SEM assumptions in this study are met. GOF was assessed based on the standard root mean squared residual (SRMR), Chi square, and the normed fit index (NFI). According to Ghozali, the model is said to be fit if the SRMR value < 010, the Chi square value > 0.05 and the NFI value > 0.90 (Ghozali, 2018) Table 8 explains that the standard root mean squared residual (SRMR) is 0.083 < 0.10, the Chi squared value is 201.861 > 0.05, and the NFI is 0.767 > 0.90, explained that the proposed model itself provides sufficient information as a fit model.
Based on the research results, the correlation between innovation capability and competitive advantage has a p-value of 0.000 <0.05 which indicates that the correlation is significant, which means that the first hypothesis (H1) is accepted. The correlation between information technology capability and competitive advantage has a p-value of 0.000 <0.05 which indicates the correlation is significant, which means that the second hypothesis (H2) is accepted.

Discussion a. Innovation Capability Affects the Competitive Advantage of Coffee Shop MSMEs
The results of this study explain that innovation capability has a significant effect on the competitive advantage of Coffee Shop MSMEs. The results of this study are in line with the results of previous research conducted by Mulyana & Sutapa (2016) which explains that business actors who have a competitive advantage are business actors who have the ability to think creatively and innovatively. Without creativity and innovation, companies will find it difficult to survive in an era of increasingly fierce competition. Likewise, Adiputra & Mandala's (2018) research proves that innovation capability has a positive effect on competitive advantage. This research is also in line with the research of Djodjobo & Tawas (2017) which explains that a business that does not have a weak ability or ability to make innovations, then the business can be left behind. A business that introduces innovation can lead and minimize the possibility of competitors to innovate early. The results of this study explain that innovation capability is a strategic capability that has an impact on the competitive advantage of SMEs. In this case, the ability to innovate can be seen from the ability of MSME Coffee Shops to create unique coffee drink variants and the atmosphere of drinking coffee can be a source of competitive advantage.

b. Information Technology Capabilities affect the Competitive Advantage of Coffee Shop SMEs
The results of this study explain that information technology capabilities have a significant effect on the competitive advantages of Coffee Shop SMEs. The results of this study are in line with the research of Pamungkas et al (2021) which states that good information technology capabilities can certainly be useful in building a company's competitive advantage. Good information technology capabilities can also increase a company's competitive advantage which helps to streamline the costs incurred by a company. This research is also in line with research by Fahmi & Mudiantono (2019) which states that information technology capabilities have a positive effect on continued competitive advantage. Likewise, in the research of Cahyani et al (2021) it states a situation where during the COVID-19 pandemic people accessed all information using the internet or technology-based ones, as did MSME actors in the Cibaduyut Industrial Center in accessing information about markets that could be targeted or not access information that makes it easier for MSME business actors there. The results of this study explain that the capability of information technology is a source of competitive advantage that can be utilized by MSME Coffee Shops. Utilization of information technology capabilities helps MSMEs in running digital-based businesses. This is also the answer to the problems of MSMEs, the majority of which have not utilized information technology in business.

V. Conclusion
The results of this study explain that in order to increase competitiveness, MSME Coffee Shops need to increase their competitiveness by increasing their innovation capabilities and information technology capabilities. The ability of coffee shop SMEs to compete with other coffee shop SMEs is the main factor for survival amid the increasing number of coffee shop outlets in Indonesia. As stated by (Amri, 2020) In the last 3 years the number of coffee shops in Indonesia has increased 3 times, from 1,083 outlets in 2016 to 3,000 outlets in 2019, and in 2020 an increase of 15%, which is 3,450 coffee shops. Besides that, with the ability to compete, MSME Coffee Shops can take the opportunity to develop along with the increasing consumption of coffee drinks in Indonesia.

Suggestion
For further research development, the researcher suggests the need to expand the scope of the research object by adding observation objects outside Jabodetabek. In addition, it can add other variables in researching the capabilities of innovation and information technology in increasing competitive advantage in the MSME Coffee Shop. Second, the population in this study is only a few respondents of business actors; Thus, the research population in the future can be expanded beyond coffee shop entrepreneurs to have deeper knowledge about capabilities and information technology in increasing competitive advantage in MSME Coffee Shops in Jakarta