Exploring Digital Transformation in Creative Economy: Strategies for Sustainable Growth and Competitive Advantage

Abstract

Digital innovation has become a transformative force in the creative economy, enabling businesses to achieve competitive advantage through differentiation, cost leadership, and adaptability. Leveraging advanced technologies such as artificial intelligence, blockchain, augmented reality (AR), and virtual reality (VR), creative enterprises can enhance operational efficiency, personalize customer experiences, and expand market reach. This study explores the role of digital innovation in fostering competitive advantage within the creative economy, applying theoretical frameworks such as Porter’s Competitive Advantage Theory, the Resource-Based View (RBV), and the Dynamic Capabilities Framework. The findings reveal that businesses that effectively integrate digital tools into their workflows can achieve sustained growth, resilience, and market differentiation. However, challenges such as resource limitations and the digital divide hinder the full realization of these benefits, particularly for small and medium-sized enterprises (SMEs). To address these challenges, the study emphasizes the need for collaborative initiatives, supportive policies, and targeted investments to enhance digital adoption and competitiveness. This research contributes to understanding how creative industries can leverage digital innovation to navigate the complexities of a rapidly evolving global economy.