New Insights on SME Digital Transformation

The paper, titled “Integrating SMEs’ Market and Technology Orientation: An Exploration of Digital Technological Opportunism, Agility, Future Focus, and Performance”, focuses on SMEs—entities that account for over 90% of global businesses—and offers a replicable methodology to overcome their longstanding challenges of limited scale and scarce resources.

Drawing on empirical data from 322 SMEs in the UK and the US, the research systematically dissects the key drivers and mechanisms that underpin successful digital transformation. Contrary to the conventional belief that customer demand should be the primary driver, the findings introduce a disruptive perspective: technology orientation has 2.3 times more impact on driving digital transformation than market orientation, positioning it as the decisive force behind future-focused strategies and enhanced organizational performance.

The study introduces the concept of a “capability-driven transformation” model, emphasizing the importance of strengthening firms’ sensitivity to emerging technologies and their ability to identify digital opportunities. This, in turn, supports the development of forward-looking strategic planning and significantly boosts performance. The data reveal that SMEs proactively adopting technologies such as AI and blockchain see a 21.3% increase in performance, while those regularly scanning tech trends and planning long-term technology roadmaps achieve a 41.3% improvement.

Importantly, the research also dispels a common myth in digital transformation: organizational agility has no significant moderating effect on performance. In other words, SMEs need not blindly pursue agile organizational structures. Instead, they should concentrate their limited resources on building technological capabilities.

The study further recommends a “dual capability synergy” approach—simultaneous investment in technological development (e.g., data analytics tools) and market insight (e.g., customer behavior tracking)—to enhance overall competitiveness.

This research offers a practical and scalable framework for SMEs worldwide to navigate digital transformation, especially supporting firms in emerging markets by lowering the barriers to internationalization and bridging the digital divide. It also provides a theoretical foundation for policymakers aiming to foster SME digitalization and drive inclusive economic growth.

Sai LAN

Associate Professor of Innovation & Entrepreneurship
DBA Supervisor at emlyon business school 

Academic Director of EDP Program
Associate Operation Director of Business Intelligence Center (BIC)

Dr. Lan is Associate Professor of Innovation & Entrepreneurship, and DBA Supervisor at emlyon business school. Dr. Lan has inter-disciplinary education background and rich work experiences in the IT industry in US, such as software architect for tech giant Motorola Inc., and several startup companies in Chicagoland. Dr. Lan earned his PhD in Strategy and Entrepreneurship from University of Illinois at Urbana-Champaign. Then he became a faculty member of Peking University HSBC Business School (PHBS) and served as the founding director of PHBS Research Center for Innovation & Entrepreneurship. Dr. Lan’s research interests focus on Innovation and Entrepreneurship, with special interests in digital platform, open source software ecosystems, and digital transformation. Dr. Lan has many SSCI and CSSCI journal publications, peer-reviewed academic book chapters, and paper presentations in major academic conferences, including Best Paper Awards in AOM and AIB annual conferences. He used to serve as the Asia Representative for the Academy of Management (AOM) STR division. Dr. Lan provided media commentaries for Shenzhen TV, Phoenix TV, TV Korea, China Daily, Southern Daily, and Global Talents, etc. He also provided consulting and executive training services to companies like Huawei, Rolandberger, Accenture, Byte Dance, China Post, and many tech startups.

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