Digital Transformation and SME Growth in Emerging Markets

As the circular economy (CE) concept gains growing popularity among consumers and producers, small‐ and medium‐sized enterprises (SMEs) increasingly look for ways to reorganize their offering and operations to integrate into the CE. This study examines the impact of (a) circular eco‐innovations and (b) external funding available for CE activities on the growth of European SMEs using a data set of 5,100 SMEs across 28 European countries in 2016. Findings reveal that a significant threshold investment (i.e., higher than 10% of revenues) into circular eco‐innovations is required for SMEs to benefit from investing into the CE. Moreover, the majority of circular eco‐innovations fail to boost the growth rates of SMEs, with the exception of investments into eco‐design innovations. Although traditional forms of debt and grant finance targeted to CE activities are found to have no or negative impact on the growth of SMEs, equity finance (i.e., angel and venture capital investments) contributes positively to their growth. The study offers insights into the lower levels of SME engagement in the CE as well as policy implications for improving engagement.

In the contemporary digital economy, Small and Medium-sized Enterprises (SMEs) are increasingly compelled to adopt smart business models to remain competitive and responsive to market dynamics. Smart business models leverage digital technologies to enhance operational efficiency, customer engagement, and innovation capacity. However, the transition to such models is fraught with challenges, particularly concerning digital infrastructure. This study investigates the specific digital infrastructure barriers that SMEs encounter in their pursuit of smart business models, aiming to provide a comprehensive understanding of these impediments and propose actionable solutions. The research employs a mixed-methods approach, combining quantitative surveys and qualitative interviews with SME owners and managers across various sectors. The quantitative component involves a structured survey distributed to 500 SMEs, assessing their current digital infrastructure, readiness for digital transformation, and perceived barriers. The qualitative component comprises in-depth interviews with 30 SME stakeholders, providing nuanced insights into the challenges and strategies related to digital infrastructure. Findings reveal that SMEs face multifaceted barriers in transitioning to smart business models. Key challenges include limited financial resources to invest in advanced digital technologies, inadequate broadband connectivity, lack of in-house technical expertise, cybersecurity concerns, and resistance to organizational change. These barriers are often interrelated, creating a complex landscape that hinders digital transformation efforts. Financial constraints emerge as a predominant barrier, with many SMEs unable to afford the initial investment required for digital infrastructure upgrades. This limitation is exacerbated by difficulties in accessing external funding or government support programs. Inadequate broadband connectivity, particularly in rural or underserved areas, further impedes the adoption of cloud-based services and real-time data analytics essential for smart business operations. The lack of in-house technical expertise poses another significant challenge. SMEs often struggle to recruit and retain skilled IT professionals, leading to reliance on external consultants or suboptimal utilization of digital tools. Cybersecurity concerns also deter SMEs from embracing digital transformation, as they fear potential data breaches and lack the resources to implement robust security measures. Organizational resistance to change, rooted in established workflows and cultural inertia, further complicates the transition. Employees may be hesitant to adopt new technologies, and management may lack a clear digital strategy or vision. This resistance underscores the need for change management initiatives and leadership commitment to foster a digital-ready culture. This research contributes to the existing literature by providing an in-depth analysis of digital infrastructure barriers specific to SMEs and offering practical solutions to facilitate their transition to smart business models. By addressing these challenges, policymakers, industry stakeholders, and SMEs themselves can collaboratively pave the way for a more inclusive and resilient digital economy.

PurposeThis study aims to investigate the influence of the digitalization of corporate social responsibility (CSR) on the sustainable competitive performance (SCP) of small- and medium-sized enterprises (SMEs) in an emerging economy and to examine the moderating effect of digital organizational culture on this relationship.Design/methodology/approachData collection was conducted through a survey completed by 311 owners and top managers operating in service, trading and manufacturing sector SMEs positioned within the twin cities of Pakistan. A convenient purposively sampling technique and snowball method were used for data collection, and structural equation modeling was used for data analysis.FindingsThe results of this study suggest that CSR digitalization has a markedly positive influence on the SCP. Digital organizational culture appears to moderate these relationships.Practical implicationsThis study highlights the importance of considering CSR digitalization and fostering a digital organizational culture for SMEs to achieve SCP. The findings provide valuable insights for strategic decision-makers, including owners, CEOs and senior management of SMEs, to enhance their knowledge concerning how and why a digital organizational culture makes it easier to digitalize CSR activities, with the ultimate objective of ensuring SCP and SME growth. Overall, the findings of this study have practical implications for policymakers and managers in SMEs as they can promote the adoption of digital technologies in CSR initiatives and develop a digital organizational culture within the organization. This would contribute to enhancing the SCP of SMEs. Thus, this research is beneficial for business actors, policymakers and researchers seeking to enhance SMEs’ SCP.Social implicationsThis study provides valuable guidance to the senior management of SMEs regarding successfully adopting and integrating digital technologies into their CSR practices. This integration can lead to increased social and environmental benefits, which positively impact both business and society. Policymakers can use these findings to develop policies and initiatives to encourage CSR digitalization among SMEs. By providing support and incentives for digital transformation, policymakers can help SMEs adopt digital tools to improve their CSR performance, contributing to economic growth and sustainability.Originality/valueThis study pioneers research on the links between CSR digitalization, digital organizational culture and the SCP of SMEs. This study contributes to the literature by defining CSR digitalization as an antecedent to the SCP of SMEs. In addition, this study underlines the significance of CSR digitalization for the achievement of SMEs’ SCP of SMEs with the moderating role of digital organizational culture. Overall, this study enriches the resource base view literature through empirical evidence.

Small and medium-sized enterprises (SMEs) play an important role in any developing economy. In Oman, about 60% of SMEs are the source of employment. There is an increase in SMEs, but there are also challenges linked with growth; this research project explores the specific challenges faced by small and medium business owners. This study used a simple random sample with data from 200 SME owners, and data was collected using a well-design questionnaire. The data was analyzed in more detail by descriptive statistics and ANOVA statistics. A reliability test was performed to determine how reliable the data collecting instrument was. The limitations of this work and several suggestions are recorded. Several hypotheses are tested, and the results show a significant relationship between Financial management constraints and SME growth. And, also, there is a significant relationship between Marketing management constraints and the growth of SMEs. And, also, there is no significant relationship between the relationship of statistical importance between the Human resource constraints and the growth of SMEs in Oman.

Purpose - In the dynamic and ever-changing global economy, the significance of financial literacy cannot be emphasized enough. As individuals and businesses maneuver through the intricate financial landscape, comprehending essential financial concepts and making well-informed decisions becomes paramount for sustained success, particularly for small and medium-sized enterprises (SMEs). In a recent study, the objective was to examine the role of financial literacy as a moderator in the relationship between access to finance and the growth of SMEs. Design/methodology/approach–The study used primary data taken from Lahore, Pakistan through a well-structured questionnaire. The study took the data from 206 SMEs and employed moderating regression. Findings-The results showed that financial access has a straight and positive influence on financial growth. Additionally, the findings showed that financial literacy moderates the association between financial access and SME growth. Limitations/Implications–Policymakers can use insight from this research to design targeted programs and initiatives that enhance financial literacy among entrepreneurs. Findings might be context-specific and not easily generalizable across different industries, regions, or economic conditions. Establishing a direct causal relationship between financial literacy and firm growth can be complex. Other external facts might also affect growth outcomes. Originality/value –Using the resource-based view, this study highlights the importance of financial literacy for the growth of Pakistani SMEs. It draws SME owners' attention toward financial literacy.

Purpose This paper investigates the impact of public support on Moroccan small and medium-sized enterprise (SME) growth’ metrics in the post-COVID-19 era, focusing on subsidies, guarantee schemes and incubation services, among other firm characteristics and financing choices. Design/methodology/approach The paper employed a quantitative approach, gathering data through a survey administered to 109 SME managers and chief financial officers (CFOs) in the Casablanca-Settat region. The survey was designed to capture a comprehensive range of variables related to firm characteristics, financing sources, and growth indicators. To streamline and reduce the complexity of the dataset, principal component analysis (PCA) was utilized, allowing for the identification of key underlying factors. Following this dimensionality reduction, several ordinal probit regression models, including a stepwise approach, were applied to examine the relationship between the identified factors and the growth metrics of the SMEs. This multi-model strategy enabled the identification of the most significant determinants across various growth metrics, ensuring a robust and nuanced analysis of SME growth. Findings Our findings paint a complex picture: subsidies play a positive role in boosting sales and added value but don’t strongly impact job growth. Guarantee schemes help SMEs grow their workforce and sales but have a smaller effect on net income and added value. Incubation programs show limited impact overall, hinting at a need for stronger ongoing support. Financing options offer only modest growth benefits, while factors like family involvement and effective human resource practices stand out as key growth drivers. Innovation contributes gradually, underscoring the importance of a steady, long-term approach to supporting SMEs. Research limitations/implications It is crucial to acknowledge that this analysis is conducted within the post-COVID-19 context, a period marked by significant instability, uncertainty and a lack of visibility for firms and economies worldwide. Therefore, the results cannot be generalized. Another limitation of our work is its geographic focus, which is confined to the region of Casablanca-Settat. This regional limitation may restrict the generalizability of our findings to other areas within Morocco or to different countries with varying economic environments and policy frameworks. Practical implications The findings of this study suggest actionable steps for policymakers and public actors aiming to enhance SME growth. Tailoring credit guarantee schemes to the specific needs of SMEs across various sizes and sectors can improve financial accessibility, while fostering stronger collaboration between public entities and financial institutions ensures consistent and responsive credit flows. Additionally, strengthening incubation programs with strategic financial guidance and capacity-building initiatives can empower SMEs to build sustainable financial foundations. Originality/value This research provides valuable guidance for policymakers and managers aiming to reinforce the resilience and stimulate the growth of Moroccan SMEs in a dynamic economic environment. Also, it's the first of its kind to our knowledge in the context of a developing country.

Small and Medium-sized Enterprises (SMEs) are pivotal to global economic development, yet many struggle with data fragmentation, delayed insights, and inefficient decision-making processes. To remain competitive in fast-paced and unpredictable markets, SMEs must adopt agile strategies driven by real-time information. This paper explores how real-time data visualization and analytics can be operationalized to catalyze SME growth, enhance business agility, and improve strategic responsiveness. Real-time data visualization transforms raw data into dynamic and interactive dashboards, enabling business owners and decision-makers to monitor key performance indicators (KPIs), identify trends, detect anomalies, and respond to opportunities or threats instantaneously. When integrated with advanced analytics, including predictive and prescriptive models, these systems empower SMEs to make data-informed decisions that drive operational efficiency, customer satisfaction, and revenue growth. The paper presents a technical overview of real-time analytics architectures, covering data pipelines, APIs, and visualization tools suitable for SMEs. It evaluates cloud-based platforms and open-source solutions that offer cost-effective deployment, scalability, and minimal infrastructure overhead. Through case studies, the paper demonstrates how real-time dashboards have improved demand forecasting, optimized inventory management, enhanced marketing performance, and facilitated financial planning across diverse SME contexts. Despite these benefits, the transition to real-time systems presents challenges, including data quality issues, integration complexities, and a skills gap in data literacy. The paper discusses strategies to overcome these barriers through capacity-building, adoption of low-code/no-code platforms, and strategic partnerships with analytics providers. This work advocates for the mainstream adoption of real-time data systems as a catalyst for SME transformation. It underscores the critical need for digital inclusivity in business intelligence, where SMEs—regardless of size or sector—can harness the power of data to scale sustainably, innovate confidently, and compete effectively in an increasingly data-driven economy.

The vast majority of small and medium-sized enterprises (SMEs) across EU and OECD regions are medium-to-low-tech firms, and by far the main type of innovation that SMEs undergo can be described as incremental innovations whereby small changes in processes or management procedures are ongoing over a period of time. Despite this, regional innovation initiatives are recognised to be narrowly focused as well as biased towards high-tech firms and ‘radical’ innovations whilst incremental innovation assumes a secondary role. If SMEs are to achieve their growth potential, and especially manufacturing-based SMEs, we argue that an incremental approach to innovation, at least initially, is crucial. It is our contention that higher education institutions—by virtue of their knowledge base, mentoring capabilities, and access to resources—should seek to position themselves as key ‘practical implementation’ players for this form of regional innovation. On the basis of research and practical implementation projects carried out in medium-to-low-tech SMEs located in the UK North West, we present an interventionist framework to assist manufacturing-based SMEs to develop and implement sustainable agile growth strategies, and consider the policy implications of such an approach.

Despite the core role small and medium-sized enterprises (SMEs) play in driving economic development and job creation across both developed and developing nations, the growth of SMEs has continued to decline especially in Nigeria. Therefore, this study examined the effect of entrepreneurial leadership and learning orientation components on SMEs growth in South-West Nigeria. Survey research design was adopted for this study. The population comprised 149,317 owners/managers of SMEs in South-West Nigeria. A sample size of 498 was determined using Cochran formula. Simple random sampling technique and a validated questionnaire was adopted for data collection. Cronbach's alpha reliability coefficients for the constructs ranged from 0.702 to 0.829. Findings from partial least squares structural equation modeling revealed that entrepreneurial leadership and learning orientation components had positive and significant effect on the growth of SMEs in 2 2 South-West Nigeria (Adj R = 0.934; F = 0.497; SRMR = 0.050, NFI = 0.767, p < 0.05). SMEs should synergistically integrate entrepreneurial, visionary leadership with a strong commitment to continuous learning and knowledge acquisition, fostering an adaptable, opportunity-oriented culture aligned for capitalizing on emerging trends and propelling sustained growth trajectories in dynamic competitive markets.

This study presents a new theoretical understanding of how growth and business success is perceived by small and medium-sized enterprises (SMEs), by investigating how organic unintended growth is dealt with when growth is perceived as problematic. The study is based on a new structuring of current state-of-the-art growth literature as well as an explorative, longitudinal, in-depth, qualitative case study. The study contributes knowledge of how unintended growth firms may handle the growth-related dilemmas through different coping strategies: 1) prioritize existing customers, and only take on new customers if sufficient capacity is available and a high service standard can be maintained; 2) employ and empower self-managed employees with a sense of responsibility and team-spirit; 3) keep a flexible organization and make room for employees that are able and willing to adapt and take charge. The study can serve as inspiration to policy-makers, consultants and SMEs—and may potentially convince more owner-managers to pursue firm growth in future.

Small and medium-sized enterprises (SMEs) are businesses that fall within a specific range of criteria related to their size, which may include factors such as revenue, assets, or number of employees. Bangladesh has experienced a tremendous increase in SMEs in the past two decades. SMEs are the backbone of the Bangladeshi economy, and they play a significant role in the country's economic growth. Social media plays a significant and multifaceted role in the operations and growth of SMEs. This conceptual study delves into the transformative role of social media marketing adoption by SMEs in Bangladesh. Additionally, the study explores the increasing significance of artificial intelligence (AI) in social media marketing within the SME context. As technology, particularly AI, continues to reshape the business landscape, this chapter offers valuable insights for academia and stakeholders invested in the dynamic and burgeoning SME industry in Bangladesh.

Orientation: The South African economy and, in particular, small and medium-sized enterprises (SMEs) have shown uninspiring performance, reflected in low levels of job creation, worryingly low levels of total early-stage entrepreneurial activity and entrepreneurial employee activity (EEA). As SMEs are the innovation and growth engine of an economy, the poor EEA levels (0.7%) indicate lacklustre levels of innovation and intrapreneurial activity.Research purpose: This study aims to fill the void by assessing the effect of intrapreneurial orientation (IO) at the employee level on internal SME growth.Motivation for the study: Despite this bleak outlook, to date no study has attempted to determine the influence of an IO on SME growth metrics.Research design, approach and method: The study is quantitative in nature, using an adapted questionnaire and employing a random sampling approach. Data were analysed by means of factor, correlation and regression analyses. A total of 290 responses were received from SME employees across South Africa.Main findings: The empirical study showed that only risk-taking, innovativeness, personal control, self-esteem and certain managerial factors positively relate to the growth of an SME.Practical/managerial implications: The findings provide insights for managers within SMEs on improving employee entrepreneurial activity and growth rates, by means of focusing on growth-supportive IO interventions.Contribution/value-add: The findings of this research are beneficial to academia and industry as the framework and measuring instrument offer additional insights into IO within SMEs.

Business revival in the new normal era is currently the main focus for Micro, Small and Medium Enterprises (MSMEs) after nearly a year of experiencing a downturn during the pandemic. Maintaining stable performance in the new normal era is currently the main strategy for MSMEs which have a strategic role in improving the national economy. MSME actors face many problems including limited business capital, business licensing, lack of innovation, and not a few MSMEs are still stuttering about digital technology today. Therefore, the contribution of various parties is needed in an effort to improve its performance. This study aims to develop a model for improving the performance of MSMEs through digital skills, workforce transformation and digital transformation as interventions. This digital change is urgently needed for MSMEs in increasing their readiness to face the current pandemic due to the limited space for MSMEs to move. Increasing digital transformation in MSMEs needs support from digital skills and workforce transformation from MSME human resources so that it will trigger an increase in MSME performance. This research was conducted using a survey method by distributing questionnaires to 250 MSMEs in Central Java. Analysis of research data was carried out by testing structural equation modeling (SEM) and using the variance approach (partial least squares), then data processing was supported by the SmartPLS application. The results show that increasing the performance of MSMEs can be improved through digital transformation. And in improving digital transformation through digital skill readiness and carrying out HR workforce transformation, so that MSMEs are more able to compete and adapt during a pandemic.

The introduction of Public-private Partnerships (PPPs) in infrastructure provision has changed the way in which governments around the world now view infrastructure provision. However, the introduction of PPPs to deliver infrastructure has not benefited the broader public. Although SMEs are important for employment creation, inequality and poverty reduction, the participation of SMEs (small and medium enterprises) in PPP projects is very low in developing countries. This is because PPP models in developing countries are developed based on those used in developed economies, and such models ignore the socioeconomic realities facing developing countries. The objective of this study is therefore to demonstrate that PPP projects in developing countries present an opportunity for growing the SME sector and create the needed jobs and contribute to poverty alleviation. The study has found that PPP projects have the potential to develop a sustainable SME sector, as it has found that SMEs do participate in PPP projects; however, their participation is curtailed by a number of challenges such as: lack of access to finance, limited human resources, low technological capabilities, and lack of access to markets. It also found that linking SMEs to PPP projects may address some of these challenges to a certain extent, especially if SMEs provide services to PPP projects during both the implementation and the operational phases of PPP projects. It also found that PPPs have not yet been identified by the South African government as one of the initiatives that can facilitate SME development. Most focus on PPP projects is only on ensuring that they include ownership by previously disadvantaged South Africans. The study recommends that a policy be developed that will incentivise PPP firms to use SMEs in their projects and penalise those PPP firms that fail to comply with the policy imperatives. It went on and found that the different South African government institutional initiatives or frameworks to support SMEs seem to be adequate; however, what is needed is a cohesive approach that links all these initiatives together and ensures that they support one another.

Local enterprise partnerships (LEPs) were introduced by the UK government in 2010 to promote local economic development. There is, however, a minimal pre-LEP baseline analysis concerning aspirations of small and medium-sized enterprises (SMEs) in LEP geographies. Employing Federation of Small Businesses 2010 data gathered before LEP policy activities began. This study examines growth and innovation intention of SMEs in LEP-defined areas. The analysis demonstrates how key internal SME strategic focus areas of staffing levels, training investment, research and development and online presence support their growth and innovation intentions. Results from fuzzy-set qualitative comparative analysis demonstrate that SMEs’ growth and innovation intentions and strategic areas that drive these intentions differ substantially between LEP-defined regions. This study contributes to knowledge providing baseline data outlining objectives and strategic foci of SMEs in different LEP areas, allowing LEPs to effectively evaluate programmes aligned with the requirements of their SMEs, potentially informing future policymaking.