What is it about?

Many small and medium-sized businesses recognise the importance of digital transformation but struggle to take the first steps. Why do some companies make progress while others remain stuck, even when they have clear strategic goals? We examined this question using data from 136 small and medium-sized businesses operating in manufacturing and related sectors in Hidalgo, Mexico. Our research explored how strategic planning, perceived obstacles, technological knowledge and employee development are associated with companies' readiness to adopt digital technologies. The findings reveal an interesting paradox: businesses with a stronger strategic orientation may become more aware of the financial, technological and organisational barriers they face. This greater awareness is associated with lower levels of early digital adoption when internal capabilities are limited. However, technological knowledge helps reduce the link between strategic orientation and perceived barriers, while practices that support employee skills, participation and adaptability may help businesses cope with these obstacles. The study highlights why successful digital transformation requires more than strategic intentions or investment in technology.

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Why is it important?

Digital transformation is increasingly important for business competitiveness, yet many small businesses lack the resources, knowledge and organisational capabilities needed to adopt new technologies. Our research challenges the assumption that having a clear strategy automatically leads to greater digital progress. Strategic awareness may actually highlight obstacles that businesses are not yet prepared to overcome. The findings suggest that companies should focus on developing technological knowledge and strengthening their employees' ability to adapt to change. Starting with manageable digital tools, involving employees in improvement initiatives and gradually building internal capabilities may be more effective than attempting major technological changes without adequate preparation. These insights are particularly relevant for businesses in emerging economies, where financial constraints and limited institutional support can make digital transformation especially challenging. For policymakers, the study also suggests that financial incentives and technology investments should be complemented by training, technical assistance and programmes supporting organisational capability development.

Perspectives

One of the most interesting findings of this research is that being strategically prepared does not necessarily mean being ready for digital transformation. Companies that actively analyse their environment and identify technological opportunities may also become more aware of the difficulties involved in implementing change. Without the necessary technological knowledge and organisational capabilities, this awareness may become a source of hesitation rather than progress. I believe this finding offers an important lesson for managers, particularly in small businesses operating with limited resources. Digital transformation should not be viewed simply as a matter of purchasing new technologies. It also requires developing the knowledge, employee involvement and organisational adaptability needed to make those technologies useful. For me, the broader message is that digital transformation is fundamentally a process of organisational learning and capability development. Strategy provides direction, but people and capabilities are essential for translating that direction into action.

José-Vicente Tomás-Miquel
Universitat Politecnica de Valencia

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This page is a summary of: Building early digital transformation readiness in manufacturing-related SMEs: the role of strategic orientation and internal capabilities in a regional emerging-economy setting, Journal of Manufacturing Technology Management, October 2026, Emerald,
DOI: 10.1108/jmtm-12-2025-1249.
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