Reveal the Evolutionary Trajectory of Digital Innovation in Small and Medium-sized Enterprises

The continuous maturation and advancement of information technology and digital technology are compelling enterprises to embark on the journey of digital transformation. Numerous large enterprises have successfully undergone digital transformation. However, small and medium-sized enterprises (SMEs), as the largest group in the business world, face challenges in their digital transformation due to constraints in capital, technology, talent, and other aspects. This paper aims to summarize the obstacles hindering SMEs by reviewing relevant literature. The challenges faced by SMEs during the process of digital transformation include limited product portfolios, high capital costs, environmental fluctuations, inadequate understanding of digital technologies, limited human resources availability, and a need for standardized practices. Technological challenges also exist within this context due to resource limitations and insufficient knowledge about information management among SMEs. Nevertheless, these companies can leverage their relatively small scale and flexibility to achieve successful digital transformation through improved management capabilities. The objective of this article is to overcome these challenges effectively with sustainability at its core focus on driving innovation compliance with regulations/guidelines employee upskilling is crucial for SMEs' success in achieving balanced growth while undergoing sustainable digital transformations. Lastly, this paper emphasizes the complexity and diversity involved in SMEs' journey towards digitization providing feasible strategy suggestions based on reflection discussion combined with case analysis.