Technology, Innovation, and Scale: Deconstructing the Core Drivers of SME Digital Transformation in the Post-pandemic Era

This study aims to investigate the key drivers influencing the level of digital transformation among Small and Medium-sized Enterprises (SMEs) in the post-pandemic era. Adopting the Technology-Organization-Environment (TOE) framework, this paper analyzes survey data collected from 220 SMEs in the Guangdong region of China. Using an Ordered Logit Regression model, the study systematically examines the impact of various factors across the technological, organizational, and environmental dimensions on the firms’ level of digital adoption. The findings indicate that innovation activities, existing technological competence (particularly in cloud computing, big data analytics, and robotics), and firm size are the most critical and robust drivers of digital transformation. Contrary to theoretical expectations and some existing literature, this study finds that external business environmental pressure and perceived internal organizational barriers were not statistically significant in the model. This finding highlights that, in the current economic climate, the digital transformation of SMEs is more of an endogenous process driven by internal capabilities and strategic intent, rather than a passive response to external pressures. The results of this study provide new empirical evidence to deepen the theory on SME digital transformation and offer targeted practical implications for business managers and policymakers.