Digital and AI-enabled adoption and sustainable performance among SMEs in emerging economies: Determinants and evidence

Artificial intelligence (AI) reaches small and medium-sized enterprises (SMEs) mainly through broader digital systems. This research note integrates the Technology–Organization–Environment framework, the Resource-Based View and Dynamic Capabilities theory to examine digital and AI-enabled adoption (automation, data-driven tools and digital platforms) among 15,621 SMEs in 14 emerging economies, using the World Bank’s Firm-level Adoption of Technology survey. Logistic regression, Random Forest, XGBoost and SHAP analysis show that technology readiness, firm size, international linkages, technology finance and managerial education predict adoption. Internet connectivity acts as a gateway, and a spline model confirms a readiness threshold. Adoption is associated with financial and social performance, but not with operational or environmental performance, and management capabilities carry only a small part of this association. Managers and policymakers should therefore build digital readiness first and pair technology support with explicit environmental objectives.