Impact of Digital Transformation on Organizational Innovation in SMEs in Kenya

Purpose: The purpose of this article was to analyze the impact of digital transformation on organizational innovation in SMEs in Kenya. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The impact of digital transformation on organizational innovation in SMEs in Kenya has been significant. Adoption of digital tools like cloud computing, mobile applications, and data analytics has led to improved product development, operational efficiency, and customer engagement. SMEs leveraging these technologies report increased productivity, faster decision-making, and better resource allocation. However, barriers such as high initial costs, limited digital infrastructure, and skills gaps hinder wider adoption, particularly in rural areas. Research suggests that digital marketing and social media also play crucial roles in enhancing market reach and customer satisfaction. Unique Contribution to Theory, Practice and Policy: Technology-organization-environment (TOE) framework, dynamic capabilities theory & disruptive innovation theory may be used to anchor future studies on the impact of digital transformation on organizational innovation in SMEs in Kenya. In practice, SMEs in Kenya should adopt a more holistic approach to digital transformation by integrating various digital technologies across their business operations. From a policy perspective, the Kenyan government must prioritize the development of digital infrastructure, particularly in underserved and rural areas, to support SMEs in their digital transformation journey.