Do We Consider Sustainability When We Measure Small and Medium Enterprises’ (SMEs’) Performance Passing through Digital Transformation?

Abstract

Small-medium enterprises (SMEs) represent 90% of business globally. Digital Transformation (DT) affects SMEs differently from larger companies because although SMEs have more flexibility and agility for adapting to new circumstances, they also have more limited resources and specialization capabilities. Thus, it is fundamental to measure SMEs’ performance considering different perspectives. Here, we describe and analyze the state-of-the-art of DT in SMEs, focusing on performance measurement. We center on whether the tools used by SMEs encompass the triple bottom line of sustainability (i.e., environmental, social, and economic aspects). To do so, in December 2021, we performed a comprehensive systematic literature review (SLR) on the Web of Science and Scopus. In addition, we also explored a novel approach for SLR: topic modeling with a machine learning technique (Latent Dirichlet Allocation). The differences and interchangeability of both methods are discussed. The findings show that sustainability is treated as a separate topic in the literature. The social and environmental aspects are the most neglected. This paper contributes to sustainable development goals (SDGs) 1, 5, 8, 9, 10, and 12. A conceptual framework and future research directions are proposed. Thus, this paper is also valuable for policymakers and SMEs switching their production paradigm toward sustainability and DT.

Sustainable Digital Transformation for SMEs: A Comprehensive Framework for Informed Decision-Making

“…SMEs are vital contributors to the global economy, operating as dynamic entities with a significant role in various industries. Defined by financial metrics or employee numbers, SMEs lack a globally standardized classification due to variations across countries and industries [51,52].…”

“…It fosters agility and adaptability, essential qualities for solving the complexities of modern businesses. Furthermore, DT empowers SMEs to incorporate sustainable practices, aligning with global initiatives for environmentally conscious business operations [51].…”

“…The standout advantage of the SDT framework for SMEs lies in its stakeholder-centric engagement. Unlike conventional digitalization efforts that may overlook the impact on people and the environment, the SDT framework prioritizes restructuring processes, enhancing human sustainability, and cultivating sustainable practices [51]. The proposal aligns seamlessly with stakeholder theory, ensuring active engagement and the satisfaction of diverse stakeholder needs [95].…”

How Digital Transformation Can Affect Product Innovation Performance Msmes: Evidence From West Java

“…Digital transformation is a change that arises from digital technology, while digitalization refers to converting information from analog to digital form and automating processes through technology (Hess et al, 2016). Thus, this research will consider digital transformation as a synonym for "digitalization," "digital innovation," and "digital transition" in line with (Costa-Melo et al, 2023).…”

“…The discontinuity between organizational innovation and digitalization makes it difficult for MSMEs to compete in a dynamic business environment. Every MSMEs needs digital transformation to compete (Costa-Melo et al, 2023).…”