Strategic drivers of digital transformation in small and medium enterprises

Abstract

This study explores the strategic drivers influencing digital transformation within small and medium enterprises (SMEs). The purpose of the research is to identify the key external and internal factors that motivate SMEs to adopt digital technologies and reconfigure their business processes in response to changing market dynamics. A systematic review methodology was employed, analyzing existing academic literature, industry reports, and empirical studies to synthesize current knowledge on the subject. The findings reveal that competitive pressure, evolving customer expectations, operational efficiency goals, technological advancements, and regulatory requirements serve as major catalysts for digital transformation in SMEs. The review further highlights that innovation capacity and organizational agility play critical roles in accelerating adoption and sustaining transformation outcomes. The study concludes that digital transformation in SMEs is not driven by a single factor but rather by an interplay of strategic motivations shaped by both market forces and internal organizational priorities. These insights contribute to a clearer understanding of digital transformation pathways and offer implications for SME policymakers, managers, and future research.