The role of digital business transformation in frugal innovation and SMEs’ resilience in emerging markets

Abstract

PurposeThe present study aims to examine the relationships between digital business transformation, organizational learning, frugal innovation and Small and Medium Enterprises (SMEs) resilience in emerging markets.Design/methodology/approachEmpirical data collection has been implemented using a questionnaire method from 214 owners and managers of SMEs. The partial least squares structural equation modeling (PLS-SEM) approach was used to examine the measurement model and test hypotheses.FindingsThe results show that digital business transformation significantly impacts frugal innovation and SMEs' resilience in emerging markets. They also confirm the significant impact of frugal innovation on SMEs' resilience. Furthermore, the results revealed that organizational learning significantly impacts digital business transformation, frugal innovation and SMEs' resilience.Originality/valueThis study provides novel insights into the existing theories and literature regarding the determinants of SMEs' resilience in emerging markets. It also provides practical contributions, confirming the SMEs' need to develop their dynamic capabilities, including digital transformation, frugal innovation and organizational learning to maintain their resilience.