Exploring digital transformation competencies for enhancing SME resilience and competitiveness

: insights from the Stuttgart economic region

Abstract

The rapid pace of digital transformation presents significant challenges for small and medium-sized enterprises (SMEs). In collaboration with the P3 Group in Stuttgart, this project investigated the hurdles SMEs in the Stuttgart economic region face during digital transformation and identified the competencies required to overcome these challenges. Moreover, the study explored how these competencies relate to the resilience and competitiveness of SMEs, drawing valuable lessons from this case. Leveraging established frameworks, this research employed a qualitative methodology involving semi-structured, in-depth interviews with 20 SME managers across various regional sectors. Key hurdles were identified at macro, meso, and micro levels, including the overwhelming pace of technological change, strategic and cultural barriers, and resistance to change, particularly in traditional sectors and among older generations. Six essential areas of competence emerged: (1) problem solving; (2) communication and collaboration; (3) safety; (4) leadership; (5) self-management; and (6) technological competencies. Among these, leadership and self-management were highlighted as particularly crucial. Thus, this research validates that simply adopting digital technologies does not guarantee a competitive advantage for SMEs. Aligning with existing research, these competencies help bolster SMEs’ competitiveness and resilience by helping to address challenges, ensuring adaptability and agility and, thus, stability. Moreover, they contribute to efficiency increase and support effective stakeholder relationship management. Key lessons from this case also highlight the importance of contextual factors such as industry dynamics, interorganizational relationships, regional support systems, geographical disparities, and cultural attitudes toward innovation. According to the derived recommendations, SMEs should align digital strategies with organizational culture and industry dynamics and use the identified portfolio of competencies to assess and bridge gaps. Moreover, they are advised to leverage regional support systems and collaborative networks with innovative niches to set up new regimes and influence the landscape, where policymakers are encouraged to support initiatives that facilitate digital adoption among SMEs. In summary, this project contributes to the broader discourse on digital transformation by providing empirical insights specific to SMEs in the Stuttgart economic region. Future research should explore these findings in diverse contexts to validate and expand upon the results.

Date of Award	18 Feb 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Luís Lourenço Santos Silva Soares (Supervisor)