Navigating Digitalization Advancement at SMEs: The Moderating Role of Government Policy in Emerging Markets
This study investigates the influence of AI-driven automation and digital skill readiness on the digitalization process of SMEs in emerging economies, considering the moderating role of government policy. In light of the economic and infrastructural limitations common to these contexts, the study addresses a significant knowledge gap concerning how internal capabilities and external regulatory support affect SME digital transformation. Methodologically, a quantitative, survey-based research design was employed. A total of 385 respondents, including SME owners, IT specialists, HR managers, and government policymakers from Nigeria, India, Indonesia, and Vietnam, completed a 5-point Likert scale questionnaire to gather data. Stratified random sampling ensured representativeness across industries and geographic regions. Descriptive statistics, reliability testing, linear regression, and moderation analysis were conducted using SPSS. According to the study, digital skill readiness (β = 0.64) and AI-driven automation (β = 0.78) significantly enhance SME digitalization. Furthermore, the relationship between AI-driven automation and digital transformation is positively moderated by government policy (β = 0.63), which amplifies the benefits of regulatory support, incentives, and infrastructure investment. These findings emphasize the importance of external support and internal capabilities in driving sustainable digital growth among SMEs. By combining the Resource-Based View (RBV) theory with the Technology-Organization-Environment (TOE) framework, this study contributes to the growing body of research on SME digitalization. It presents a comprehensive model showing how workforce preparedness, policy environments, and technological competence influence digital transformation in SMEs. The findings help governments and SME leaders align technology adoption with workforce development and institutional support in emerging economies.
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Navigating Digitalization Advancement at SMEs: The Moderating Role of Government Policy in Emerging Markets
Semantic Scholar · 2025
Abstract
This study investigates the influence of AI-driven automation and digital skill readiness on the digitalization process of SMEs in emerging economies, considering the moderating role of government policy. In light of the economic and infrastructural limitations common to these contexts, the study addresses a significant knowledge gap concerning how internal capabilities and external regulatory support affect SME digital transformation. Methodologically, a quantitative, survey-based research design was employed. A total of 385 respondents, including SME owners, IT specialists, HR managers, and government policymakers from Nigeria, India, Indonesia, and Vietnam, completed a 5-point Likert scale questionnaire to gather data. Stratified random sampling ensured representativeness across industries and geographic regions. Descriptive statistics, reliability testing, linear regression, and moderation analysis were conducted using SPSS. According to the study, digital skill readiness (β = 0.64) and AI-driven automation (β = 0.78) significantly enhance SME digitalization. Furthermore, the relationship between AI-driven automation and digital transformation is positively moderated by government policy (β = 0.63), which amplifies the benefits of regulatory support, incentives, and infrastructure investment. These findings emphasize the importance of external support and internal capabilities in driving sustainable digital growth among SMEs. By combining the Resource-Based View (RBV) theory with the Technology-Organization-Environment (TOE) framework, this study contributes to the growing body of research on SME digitalization. It presents a comprehensive model showing how workforce preparedness, policy environments, and technological competence influence digital transformation in SMEs. The findings help governments and SME leaders align technology adoption with workforce development and institutional support in emerging economies.