BRIDGING TRADITION AND TECHNOLOGY: THE ROLE OF INNOVATION AND DIGITAL MARKETING IN SUSTAINING BALI’S SOKASI CRAFT INDUSTRY

Abstract

The sokasi craft industry in Bali represents a traditional cultural heritage that continues to sustain local livelihoods despite modern economic challenges. This study aims to analyze the role of product innovation and digital marketing in enhancing the sustainability and welfare of sokasi craft entrepreneurs in Bangli Regency. Using a quantitative approach, data were collected from 146 sokasi craftsmen across four districts through structured questionnaires. The data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) to test both direct and mediating effects. The results reveal that product innovation and digital marketing have a significant positive impact on business sustainability and the welfare of sokasi entrepreneurs. Moreover, sustainable business practices serve as a mediating variable that strengthens the influence of innovation and digital strategies on welfare improvement. These findings highlight the importance of empowering artisans through innovation, human capital development, and technological adaptation to maintain cultural continuity while enhancing economic resilience. The study suggests that integrated innovation and digital marketing strategies are essential for sustaining traditional crafts in the digital era. This study contributes to sustainability and welfare theory by confirming the mediating role of business sustainability in linking innovation and welfare in cultural MSMEs