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

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  • 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
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    References listed on IDEAS

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    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.
    2. Pushpkiran Singh & Tejas Dave & Ashish B. Joshi, 2024. "Moderating role of Digital Consumer Protection in Impacting the Intention to Use Digital Financial Services," International Review of Management and Marketing, Econjournals, vol. 14(5), pages 222-234, September.
    3. Jorge Aníbal Restrepo-Morales & Jaime Andrés Ararat-Herrera & Diego Alejandro López-Cadavid & Aquileo Camacho-Vargas, 2024. "Breaking the digitalization barrier for SMEs: a fuzzy logic approach to overcoming challenges in business transformation," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-22, December.

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