If small and medium-sized enterprises (SMEs) want to achieve better performance in terms of innovation, they should increase their organisations’ willingness to take risks and embrace change, as this will enhance their digital innovation capacity and facilitate their digital transformation. These are the findings of a research project by Corvinus University, which examined the digital competitiveness of SMEs in today’s digitally turbulent environment.
Although digitization is a popular topic, it tends to be focused more on the practices of large enterprises, with much less attention given to the SME sector. While digital transformation is the key to survival for companies in today’s economic environment, small businesses find it much harder to launch digital transformation projects due to, among other things, scarce resources, limited expertise, and lower risk tolerance.
On behalf of researchers from the Corvinus University of Budapest, interviews were conducted with the senior managers of 235 small and medium-sized enterprises in the logistical and mechatronic industries of the Central Transdanubia region randomly selected from the database of the Hungarian Chamber of Commerce and Industry in 2019 Q4 and 2020 Q1. The authors of the paper published in the Journal of Competitiveness at the end of 2022 are researchers of the Corvinus University of Budapest: Andrea Kő, Ariel Zoltán Mitev, Tibor Kovács, Péter Fehér, and Zoltán Szabó.
The results show that the digitally turbulent environment itself has a positive impact on innovative performance. Firms operating in such conditions are more inclined to experiment with digital technologies and take on more financially risky projects. They also tend to be more successful in developing and launching new products and services than their counterparts operating in a less turbulent environment.
The combination of digital agility – the ability to adapt flexibly to a rapidly changing environment -, the ability to change, and the willingness to take risks increases firms’ digital innovation capability, and their digital transformation maturity.
“The main contribution of the research is that it provides a conceptual framework for improving SMEs’ innovative performance through digital agility and digital competitiveness in the context of digital turbulence,” said Andrea Kő, Head of the Institute for Data Analytics and Information Systems at Corvinus University, first author of the research.