The Role of Digital Literacy in Supporting Performance Through Innovative Work Behavior: The Case of Indonesia’s Telecommunications Industry

The so-called “fourth industrial revolution” that is developing at an exponential pace today is characterized by several new technologies, such as robotics, artificial intelligence, and the Internet of Things (IoT). Especially in Indonesia's telecommunications industry, there is a change in the use of telecommunications services with a greater need to provide innovative data services. This research aimed to investigate the relationship among transformational leadership, innovative work behavior, performance, and digital literacy (as a moderator of the relationship between innovative work behavior and performance). This illustrates how innovation in technology can serve as a core element to drive the competitiveness of a company, especially in high-tech industries. The role of innovation is becoming increasingly significant and can determine the survival and growth of a company. This study surveyed 230 managerial-level and above employees from three telecommunication companies in Indonesia. Structural equation modeling (SEM) was performed with LISREL to analyze the data in this quantitative research. The results showed that there was a significant and positive relationship between transformational leadership and innovative work behavior, innovative work behavior was also significantly and positively related to performance, and digital literacy significantly moderated the relationship between innovative work behavior and performance.

Digital literacy; Innovative work behavior; Strategic management; Transformational leadership; Telecommunication industry

The so-called “fourth industrial revolution” that is developing at an exponential pace today is characterized by several new technologies, such as robotics, artificial intelligence, and the Internet of Things (IoT). Especially in Indonesia's telecommunications industry, there is a change in the use of telecommunications services. Data services are very important and have become the biggest area of growth for telecommunication operators. Based on a survey conducted by the Indonesian Internet Service Providers Association (APJII, 2019), internet use in Indonesia reached 54.7% in 2017 (with 143.3 million users) and grew to 56% in 2018 (with 160.6 million users).

Many researchers, such as Suwartha et al. (2017), have emphasized the importance and significance of innovation in the current era. Innovation and creativity is seen as a determinant of competitive advantage (Berawi, 2017).  Companies need to show continuous breakthroughs  and innovation in order to stay competitive in industry (Spanuth & Wald, 2017). To produce creativity, human factors are critical (Chen et al., 2016). In this context, leadership factors also determine how to promote creativity in employees (Lin & Wong, 2014). Innovative work behavior from employees will produce better performance. The current version of the industrial revolution is changing the process of work; many automated processes have been created that have succeeded by using digital technology. This study specifically examined how digital factors moderated the relationship between employee performance and innovative work behavior.

Studies regarding digital literacy as a moderating variable of the relationship between innovative work behavior and performance are still relatively rare. Therefore, the researchers wanted to examine digital literacy as a moderating influence, which can reinforce the correlation between employee innovative work behavior and performance. From previous studies, we conceptualized that transformational leadership correlates with innovative work behavior, and innovative work behavior correlates with employee performance, with digital literacy moderating the relationship between the innovative work behavior and the employee performance. This research model is shown in Figure 1.

Figure 1 Research model

Our study expands the limited research on how digital literacy can support innovative work behavior to achieve better performance in the workplace. This extends the literature, especially innovation theory at an individual level in several ways. Existing literature has mostly focused on exploring how the behaviors and styles of leaders and their management skills may affect employee (subordinate) innovative work behavior (Chang et al., 2015; Jaiswal & Dhar, 2015). The results of this research suggest the important role of supporting innovative work behavior from employees in high tech organizations. Transformational leadership also greatly influences the creativity of team members; it can lead to team member self-confidence in performing problem-solving. The results of this study were consistent with the findings from Wang et al. (2014), who examined the correlation between transformational leadership and employees’ creativity at work.

In the telecommunication industry represented by the high technology organizations in this study, digital skills are very common and have become part of the daily job. Leaders play an important factor in their use; leaders should update their knowledge especially in the areas of digital skills and knowledge. This research suggests that leaders should update their knowledge so that they can continue to help and inspire their team members in order to solve work-related problems. The results of this study are consistent with the findings of Minh et al. (2016), who examined the relationship between leaders’ technical competence and innovative work behavior.

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