IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i20p13558-d948076.html
   My bibliography  Save this article

Barriers to Sustainable Digital Transformation in Micro-, Small-, and Medium-Sized Enterprises

Author

Listed:
  • Ramona Rupeika-Apoga

    (Faculty of Business, Management and Economics, University of Latvia, LV-1586 Riga, Latvia)

  • Kristine Petrovska

    (Faculty of Business, Management and Economics, University of Latvia, LV-1586 Riga, Latvia)

Abstract

Digital transformation empowers micro-, small-, and medium-sized enterprises (MSMEs) to rethink the way they make decisions and apply technology in meaningful and sustainable ways. The aim of this study is to investigate the main barriers to MSMEs’ sustainable digital transformation, given their global importance and function as the backbone of any economy. We apply the concept of sustainable digital transformation (SDT), which refers to the process of digitalizing the economy in a long-lasting, green, and organic way by building on its key strength: innovative companies and their business ecosystems. The study is based on a representative survey of 425 Latvian MSMEs, which was conducted in the spring of 2021. We combine a survey of MSMEs with a qualitative comparative analysis. Our study identified seven barriers to sustainable digital transformation for MSMEs, which can be classified into three levels of importance. We found that the most important barriers to MSMEs are IT security issues and the shortage of specialists in the external labor market. Furthermore, we discovered that some barriers differ depending on company attributes, such as the number of employees, revenue, and the ability to implement digital transformation independently. However, the barriers were evaluated similarly by company owners and managers. These findings can help MSMEs’ managers and owners, policymakers, and practitioners understand which barriers are impeding MSMEs’ sustainable digital transformation.

Suggested Citation

  • Ramona Rupeika-Apoga & Kristine Petrovska, 2022. "Barriers to Sustainable Digital Transformation in Micro-, Small-, and Medium-Sized Enterprises," Sustainability, MDPI, vol. 14(20), pages 1-19, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:20:p:13558-:d:948076
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/20/13558/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/20/13558/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Scott L. Newbert, 2007. "Empirical research on the resource‐based view of the firm: an assessment and suggestions for future research," Strategic Management Journal, Wiley Blackwell, vol. 28(2), pages 121-146, February.
    2. Nataliia Dotsenko & Dmytro Chumachenko & Igor Chumachenko & Andrii Galkin & Tomasz Lis & Marek Lis, 2021. "Conceptual Framework of Sustainable Management of the Process of Forming a Project Team with Functional Redundancy," Energies, MDPI, vol. 14(24), pages 1-22, December.
    3. Rosa Maria Fanelli, 2021. "Barriers to Adopting New Technologies within Rural Small and Medium Enterprises (SMEs)," Social Sciences, MDPI, vol. 10(11), pages 1-15, November.
    4. Ramona Rupeika-Apoga & Stefan Wendt, 2021. "FinTech in Latvia: Status Quo, Current Developments, and Challenges Ahead," Risks, MDPI, vol. 9(10), pages 1-23, October.
    5. Patricia Ordonez de Pablos & Margaret A. Peteraf & Juan Ventura Victoria, 2007. "Foreword: the resource-based theory of the firm – challenges, new and old," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 4(1/2), pages 1-10.
    6. Baljinder Kaur & Sood Kiran & Simon Grima & Ramona Rupeika-Apoga, 2021. "Digital Banking in Northern India: The Risks on Customer Satisfaction," Risks, MDPI, vol. 9(11), pages 1-18, November.
    7. Ramona Rupeika-Apoga & Eleftherios I. Thalassinos, 2020. "Ideas for a Regulatory Definition of FinTech," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 136-154.
    8. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    9. Ramona Rupeika-Apoga & Larisa Bule & Kristine Petrovska, 2022. "Digital Transformation of Small and Medium Enterprises: Aspects of Public Support," JRFM, MDPI, vol. 15(2), pages 1-21, January.
    10. Constance E. Helfat & Margaret A. Peteraf, 2003. "The dynamic resource‐based view: capability lifecycles," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 997-1010, October.
    11. Truant, Elisa & Broccardo, Laura & Dana, Léo-Paul, 2021. "Digitalisation boosts company performance: an overview of Italian listed companies," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yan Chen & Zijin Wang & Jaime Ortiz, 2023. "A Sustainable Digital Ecosystem: Digital Servitization Transformation and Digital Infrastructure Support," Sustainability, MDPI, vol. 15(2), pages 1-16, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Do, Hoa & Budhwar, Pawan & Shipton, Helen & Nguyen, Hai-Dang & Nguyen, Bach, 2022. "Building organizational resilience, innovation through resource-based management initiatives, organizational learning and environmental dynamism," Journal of Business Research, Elsevier, vol. 141(C), pages 808-821.
    2. Xingwei Li & Jianguo Du & Hongyu Long, 2020. "Understanding the Green Development Behavior and Performance of Industrial Enterprises (GDBP-IE): Scale Development and Validation," IJERPH, MDPI, vol. 17(5), pages 1-23, March.
    3. Zhao, Nanyang & Hong, Jiangtao & Lau, Kwok Hung, 2023. "Impact of supply chain digitalization on supply chain resilience and performance: A multi-mediation model," International Journal of Production Economics, Elsevier, vol. 259(C).
    4. Busby, J.S., 2019. "The co-evolution of competition and parasitism in the resource-based view: A risk model of product counterfeiting," European Journal of Operational Research, Elsevier, vol. 276(1), pages 300-313.
    5. Zhang, Yucheng & Hou, Zhongwei & Yang, Feifei & Yang, Miles M. & Wang, Zhiling, 2021. "Discovering the evolution of resource-based theory: Science mapping based on bibliometric analysis," Journal of Business Research, Elsevier, vol. 137(C), pages 500-516.
    6. André de Abreu Saraiva Monteiro Alves & Fernando Manuel Pereira de Oliveira Carvalho, 2022. "How Dynamic Managerial Capabilities, Entrepreneurial Orientation, and Operational Capabilities Impact Microenterprises’ Global Performance," Sustainability, MDPI, vol. 15(1), pages 1-23, December.
    7. Nils Grashof, 2020. "Sinking or swimming in the cluster labour pool? A firm-specific analysis of the effect of specialized labour," Jena Economics Research Papers 2020-006, Friedrich-Schiller-University Jena.
    8. Jim Andersén, 2023. "Green resource orchestration: A critical appraisal of the use of resource orchestration in environmental management research, and a research agenda for future study," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5506-5520, December.
    9. Judith Cavazos-Arroyo & Rogelio Puente-Diaz, 2019. "The Influence of Marketing Capability in Mexican Social Enterprises," Sustainability, MDPI, vol. 11(17), pages 1-15, August.
    10. Jaya Prakash Pradhan & Mohammad Zohair, 2015. "Subnational Export Performance and Determinants," Review of Market Integration, India Development Foundation, vol. 7(2), pages 133-174, August.
    11. Fosso Wamba, Samuel & Queiroz, Maciel M. & Trinchera, Laura, 2024. "The role of artificial intelligence-enabled dynamic capability on environmental performance: The mediation effect of a data-driven culture in France and the USA," International Journal of Production Economics, Elsevier, vol. 268(C).
    12. Insu Cho & Young Hoon Kwak & Jaehyeon Jun, 2019. "Sustainable Idea Development Mechanism in University Technology Commercialization (UTC): Perspectives from Dynamic Capabilities Framework," Sustainability, MDPI, vol. 11(21), pages 1-16, November.
    13. Procel, Claudette, 2021. "Efficiency analysis of Catalonia’s construction industry pre- and post-financial crisis: a data envelopment analysis (DEA) approach," TEC Empresarial, School of Business, Costa Rica Institute of Technology (ITCR), vol. 15(2), pages 18-32.
    14. Mahavarpour, Nasrin & Marvi, Reza & Foroudi, Pantea, 2023. "A Brief History of Service Innovation: The evolution of past, present, and future of service innovation," Journal of Business Research, Elsevier, vol. 160(C).
    15. Harsh W. Mishra, 2012. "Book Review: Catherine A. Maritan and Margaret A. Peteraf (Eds), Competitive Strategy, Vols I and II," Vision, , vol. 16(3), pages 222-226, September.
    16. Richard J. Arend, 2020. "Getting Nothing from Something: Unfulfilled Promises of Current Dominant Approaches to Entrepreneurial Decision-Making," Administrative Sciences, MDPI, vol. 10(3), pages 1-22, August.
    17. Cleverton Rodrigues Fernandes & André Gustavo Carvalho Machado, 2019. "Technology Transfer Capability: development dynamics in higher education institutions," Brazilian Business Review, Fucape Business School, vol. 16(1), pages 1-15, January.
    18. Šmaguc, Tamara, 2022. "A Synthesis Of Overlapping And Divergent Areas Of The Resource-Based View Of The Firm And Entrepreneurship Theory," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 13(1), pages 1-15.
    19. Nicola Del Sarto & Alberto Di Minin & Giulio Ferrigno & Andrea Piccaluga, 2021. "Born global and well educated: start-up survival through fuzzy set analysis," Small Business Economics, Springer, vol. 56(4), pages 1405-1423, April.
    20. Lin, Hsing-Er & Hsu, I-Chieh & Hsu, Audrey Wenhsin & Chung, Hsi-Mei, 2020. "Creating competitive advantages: Interactions between ambidextrous diversification strategy and contextual factors from a dynamic capability perspective," Technological Forecasting and Social Change, Elsevier, vol. 154(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:20:p:13558-:d:948076. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.