Small- and medium-sized enterprises (SMEs) are increasingly embracing digital transformation (DT) to remain competitive; however, the enabling role of knowledge management (KM) remains underexplored. This systematic literature review investigates how KM supports DT in SMEs, focusing on strategic processes, tools, barriers, and policy contexts. A structured search was conducted in Google Scholar, Scopus, and Web of Science using the string: (“knowledge management” OR “KM”) AND (“digital transformation” OR “DT”) AND (“small and medium enterprises” OR “SME”). The search yielded 32,547 results, from which 19 studies met the eligibility criteria (English, 2020–2025, KM–DT focus, clear methodology). Results indicate that KM supports DT primarily through change management (31.58%), innovation enablement (21.05%), as well as improved decision-making and agility (15.79%). The most cited tools include KM systems, AI/analytics, and collaborative platforms. Major barriers include limited resources, lack of digital skills, and poor KM culture. Critical success factors identified are leadership commitment (26.32%) and strategic alignment (21.05%). Theoretical foundations are dominated by the Resource-Based View and Dynamic Capabilities Theory. While KM is proven to be a strategic driver of DT in SMEs, more empirical and policy-grounded studies are needed. This review provides a framework to guide future research and inform SME practitioners and policymakers.
Thango et al. (Tue,) studied this question.