Improving the Mechanism for Developing Competitive Advantages of Small Businesses in the Digital Environment: The Case of Uzbekistan.

Digital transformation is reshaping the conditions under which small businesses compete and create value. This study examines the mechanism for developing competitive advantages among small businesses in the digital environment, with particular emphasis on digital capabilities, innovation, organizational flexibility, human capital, and market adaptation. The research combines theoretical analysis with an assessment of the current role of small businesses in Uzbekistan. Drawing on international experience and national conditions, the study proposes a conceptual mechanism that links digital resources to business process transformation, innovation, and competitive performance. The findings indicate that digitalization can generate sustainable competitive advantages when technological investments are supported by appropriate organizational capabilities and human capital.