Digital Literacy and Digital Transformation Activities of Service and Manufacturing SMEs

Abstract

Digital literacy of the workforce, firms' digital literacy activities for their employees, and firms' stages in the digitalization process are some of the major concerns of SMEs in their digitalization process. Firms that take effective actions for those issues can reduce their concerns in their digital transformation. However, SMEs' digital transformation and digital literacy activities might differ depending on firm-level characteristics. This paper investigates whether SMEs' dynamic capabilities differ depending on their firm-level characteristics, such as firm size and sector. This paper considers digital transformation, digital literacy of workers, and digital literacy activities of SMEs as dynamic capabilities since those activities are included and identified in Resource-Based View (RBV) as dynamic capabilities. The research team employs a telephone survey to collect data. Moreover, the researchers apply purposive sampling techniques to generate research samples. The researchers perform Chi-square test and ANOVA analyses to investigate the differences in 330 small-large, manufacturing, and service SMEs' dynamic capabilities. According to the results, while the digital transformation stages of SMEs do not differ depending on their sector and size, there are significant differences between the digital literacy activities of small-large and manufacturing-service SMEs. They indicate similarities regarding concerns of small-large SMEs for their workers' digital literacy. However, compared to manufacturing SMEs, service firms indicate greater interest in their workers' digital literacy. Country-specific, firm-specific, sector-specific, and executive-specific factors, including market structure, level of financial assets, close interactions with customers, education level, and responsibilities of firm executives, respectively, might explain those results.