What does it take to make a business successful? How do you know if you have what it takes to succeed?
This psychological research might have the answer you’re looking for. In 2024, Anissa Lestari Kadiyono and Rezki Ashriyana Sulistiobudi from the Faculty of Psychology at Padjadjaran University conducted a research study on 920 female MSMEs (micro, small, and medium enterprises) in Indonesia. The findings in this study suggested that the answer to their success might be something completely invisible: their mindset!

The Power of Inner Strength
Within the research, this “inner strength” is known as psychological capital or PsyCap. It is defined as “an individual’s positive psychological state of development”. Within PsyCap, there are positive qualities such as self-efficacy, optimism, hope, and resilience. The study found that women MSME owners who believe in their ability to succeed, stay optimistic during setbacks, and keep persevering after failure tend to achieve better financial success.

What makes PsyCap so powerful is that it also fuels what the researchers describe as entrepreneurial orientation. In simple terms, it is a mindset that is oriented towards seeking entrepreneurial opportunities. Entrepreneurial orientation guides how entrepreneurs make decisions and take action, and it often shows up through traits like innovativeness, risk-taking, autonomy, and proactiveness. Entrepreneurial orientation can be thought of as a bridge connecting psychological capital with real business results.

Keeping up with the Modern World: Technology’s Role
Technology once again becomes something that cannot be ignored. For women entrepreneurs, technology can open up a world of possibilities, like how they can expand their reach using social media or an online marketplace. The study did find that technology readiness—how ready someone is to integrate technology into their day-to-day lives—has also been found to be associated with better entrepreneurial performance and orientation. It comes as no surprise that technology can be very helpful in making things easier for business owners.

However, it is also important to note that psychological capital has been found to have a bigger positive link compared to technological readiness when it comes to entrepreneurial performance or orientation. So, it is safe to say that while technology is important, the inner strength of these women is still the bigger driving force behind their success. Yes, technology can be very useful, but it cannot replace the role that character strength has. The key to their success is not the technology, but it is their inner strength, or in this context: PsyCap.

Why This Matters
Women represent a large portion of Indonesia’s MSME sector, operating a variety of enterprises that account for over 60% of the nation’s GDP. Moreover, their enterprises offer a means of support for their households. This study indicates that every thriving female entrepreneur possesses not only access to digital resources but also significant inner resilience. Confidence, resilience, hope, and optimism have been shown to be the primary factors contributing to the financial success of women-led enterprises in Indonesia. Technology is beneficial, but it becomes significantly more powerful when combined with these psychological strengths.

Policymakers, NGOs, and business support organizations must remember that while digitalization initiatives are crucial, their effectiveness will be limited unless they assist women in developing confidence and resilience. Training and support initiatives should emphasize not just teaching applications and platforms, but also nurturing the mindset that empowers women to succeed in a competitive market. Armed with resilience and technological preparedness, women entrepreneurs are more equipped to expand their ventures and, subsequently, boost the Indonesian economy.

This article is based on the research from:
Kadiyono, A. L., & Sulistiobudi, R. A. (2024). Linking psychological capital, technology readiness and entrepreneurial orientation to entrepreneurs’ financial performance: A study of women MSMEs in Indonesia. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2413380