Beyond resource constraints: how Ibero-American SMEs leverage AI for competitive advantage through strategic capability development

Purpose This study aims to investigate the development of growth hacking capability (GHC) in small and medium-sized enterprises (SMEs) and its impact on organisational performance, drawing on the resource-based view (RBV) and dynamic capability theory (DCT). Design/methodology/approach Using a hybrid analytical approach that combines structural equation modelling and artificial neural network, 392 respondents across 51 SMEs in China’s service and manufacturing sectors were surveyed. Findings The findings reveal that innovation (ß = 0.354), initiative (ß = 0.299) and management capability (ß = 0.176) significantly enhance GHC, which, in turn, directly improves organisational performance (ß = 0.342). Although organisational agility does not directly impact performance, it contributes indirectly through GHC. The findings highlight the strategic importance of data-driven decision-making in digital transformation and confirm the mediating role of GHC as a dynamic capability. Research limitations/implications This study is limited by its exclusive focus on Chinese SMEs, thus, suggesting the need for future research that conducts cross-national comparisons and longitudinal analyses. Practical implications Practically, SMEs are encouraged to foster an innovative culture, adopt forward-looking strategic planning and enhance managerial data literacy to cultivate GHC. Theoretically, the integration of the RBV and the DCT offers a novel lens for examining organisational capabilities in the digital era. Originality/value This study introduces GHC as a mediating variable, clarifying how innovation, initiative and managerial capability affect SME performance in digital contexts. It extends the RBV and the DCT to illustrate performance mechanisms.

Small- and medium-sized enterprises (SMEs) are increasingly embracing digital transformation (DT) to remain competitive; however, the enabling role of knowledge management (KM) remains underexplored. This systematic literature review investigates how KM supports DT in SMEs, focusing on strategic processes, tools, barriers, and policy contexts. A structured search was conducted in Google Scholar, Scopus, and Web of Science using the string: (“knowledge management” OR “KM”) AND (“digital transformation” OR “DT”) AND (“small and medium enterprises” OR “SME”). The search yielded 32,547 results, from which 19 studies met the eligibility criteria (English, 2020–2025, KM–DT focus, clear methodology). Results indicate that KM supports DT primarily through change management (31.58%), innovation enablement (21.05%), as well as improved decision-making and agility (15.79%). The most cited tools include KM systems, AI/analytics, and collaborative platforms. Major barriers include limited resources, lack of digital skills, and poor KM culture. Critical success factors identified are leadership commitment (26.32%) and strategic alignment (21.05%). Theoretical foundations are dominated by the Resource-Based View and Dynamic Capabilities Theory. While KM is proven to be a strategic driver of DT in SMEs, more empirical and policy-grounded studies are needed. This review provides a framework to guide future research and inform SME practitioners and policymakers.

Growing pressure for sustainability has intensified the need for small- and medium-sized enterprises (SMEs) to adopt environmental innovation while maintaining competitive performance. This study examines how green innovation strategy, environmental regulations, and green absorptive capacity jointly shape the sustainable performance of Chinese manufacturing SMEs. Drawing on Resource-Based View, Institutional Theory, and Dynamic Capability Theory, we develop and empirically test a model that positions green innovation as a mediating mechanism linking strategic intent and regulatory forces to environmental, social, and economic performance outcomes. Data were collected through a structured survey of 250 SME managers in Jiangsu Province and analyzed using PLS-SEM. Results show that green innovation strategy significantly enhances both green innovation and sustainability performance, and that green innovation partially mediates the effects of both strategy and regulatory pressure on performance. While environmental regulations positively influence green innovation, they do not directly improve sustainability outcomes unless translated into innovation. Furthermore, green absorptive capacity displays a boundary-conditioning role, unexpectedly weakening the strategy–innovation path when knowledge integration exceeds implementation capacity. The findings extend the sustainability-oriented innovation literature by clarifying the indirect nature of regulation–performance linkages and revealing conditions under which absorptive capability accelerates or impedes green transformation. The study offers practical guidance for policymakers seeking to design innovation-enabling regulatory frameworks and for SMEs aiming to balance capability development with strategic focus to advance sustainability transitions.

The sustainable growth of Small and Medium-sized Enterprises (SMEs) is central to economic resilience and inclusive development. In ‎China, government-led initiatives have spurred the expansion of business incubation institutions to support entrepreneurship and innovation. ‎However, existing studies have not sufficiently examined how resource-based mechanisms within incubation models affect SME development. This conceptual paper proposes an integrated framework grounded in the Resource-Based View (RBV), Dynamic Capabilities Theory, and the Natural Resource-Based View (NRBV) to explore the relationship between incubation services, resource orchestration, and ‎SME performance. The study identifies key internal and external resources, such as financial, human, technical, and sustainability-oriented ‎capabilities, that influence incubator effectiveness. It highlights the importance of strategic resource alignment, capability development, and ‎environmental adaptation in supporting SME competitiveness. The framework also considers contextual factors such as regional disparities ‎and sector-specific needs, which may moderate the effectiveness of incubation efforts. By situating the discussion within China’s evolving ‎innovation ecosystem, particularly in regions like Fujian Province, the study contributes to theory-building in incubation research and ‎informs the design of more effective and context-responsive incubation strategies. The framework serves as a foundation for future empirical ‎research aimed at enhancing the long-term impact of incubation models on SME innovation, sustainability practices, and strategic growth‎.

Digitalization has emerged as a transformative force for small and medium-sized enterprises (SMEs), enabling them to enhance operational efficiency, competitiveness, and long-term sustainability. However, the extent to which digitalization influences SMEs’ sustainable performance—spanning economic, environmental, and social dimensions—remains underexplored, particularly in the context of Wuhan, China. This conceptual paper aims to develop a theoretical framework that examines the role of digitalization in driving SMEs’ sustainable performance by integrating the Resource-Based View (RBV), Dynamic Capabilities Theory (DCT), and Institutional Theory. The study highlights key enablers and barriers to digital adoption among SMEs and emphasizes the significance of government policies, organizational digital capabilities, and sustainability-driven digital strategies. By synthesizing existing literature, this paper provides a structured conceptual model to guide future empirical research and policy development. The findings offer valuable insights for SME managers, policymakers, and researchers, underscoring the need for strategic digitalization investments, institutional support, and capacity-building initiatives to foster sustainable business growth.

Determinants of environmental, financial, and social sustainable performance of manufacturing SMEs in Malaysia

Small and medium-sized enterprises (SMEs) play a central role in the United Kingdom’s economic structure, yet they remain particularly vulnerable to systemic shocks such as pandemics, economic restructuring, and supply chain disruptions. Recent crises, including COVID-19 and post-Brexit adjustments, have highlighted the uneven capacity of SMEs to absorb, adapt to, and recover from turbulence. This study examines how UK SMEs build business resilience by analysing the combined influence of internal organisational capabilities and external institutional support mechanisms. Drawing on Resource-Based View, Dynamic Capabilities Theory, and Institutional Theory, the research adopts a mixed-methods design. Quantitative data were collected through a structured survey of 400 UK SMEs and analysed using regression and structural equation modelling, while qualitative insights were generated from in-depth case studies with SME owners, financial institutions, and business support organisations. The findings reveal that leadership agility, digital readiness, and financial management capabilities are significant predictors of resilience outcomes. External factors, including government support schemes, access to finance, and business networks, were found to moderate and strengthen the effects of internal capabilities rather than substitute for them. The study contributes a multi-level model of SME resilience that integrates firm-level and institutional dimensions and offers evidence-based implications for policymakers and practitioners seeking to enhance SME sustainability in turbulent economic environments.

This article presents a systematic review of 40 peer-reviewed studies published between 2013 and 2023, exploring the technological influence of digital transformation (DT) on sales performance in small and medium-sized enterprises (SMEs). The review identifies key internal drivers, such as innovation, leadership commitment, and organizational culture, and external enablers, including e commerce, cloud computing, and social media, that collectively enhance SMEs’ agility, operational efficiency, and customer responsiveness. Drawing on theoretical frameworks such as the Resource-Based View (RBV), Dynamic Capabilities Theory, and Knowledge-Based Theory, the review elucidates how digital capabilities translate into tangible sales outcomes. However, structural and behavioral barriers, particularly financial constraints, skill gaps, and resistance to change, remain critical obstacles to widespread adoption, especially in resource-constrained contexts. The study concludes with recommendations for SME leaders and policymakers, emphasizing integrative strategies and support mechanisms to unlock the full sales potential of digital transformation.

HRMARS - Purpose: This study aims to examine how strategic foresight and scenario planning enhance futures thinking among small and medium-sized enterprises (SMEs) in Malaysia. Drawing upon the Dynamic Capability Theory (DCT), the research conceptualizes strategic foresight as a sensing capability, scenario planning as a seizing and transforming mechanism, and futures thinking as a higher-order strategic competency. The study seeks to explain how these interrelated capabilities help SMEs strengthen adaptability, resilience, and long-term preparedness in uncertain environments. Design/methodology/approach: A quantitative, cross-sectional design is adopted, supported by a preliminary qualitative study with SME leaders. Data will be collected through a structured questionnaire from decision-makers in manufacturing and services SMEs. Partial Least Squares Structural Equation Modelling (PLS-SEM) will test the hypothesized relationships. Findings: The study is expected to show that strategic foresight and scenario planning both positively influence futures thinking, while their interaction further strengthens this effect. SMEs that apply structured foresight and scenario planning are anticipated to demonstrate higher adaptability, preparedness, and resilience in uncertain environments. Research limitations/implications: The focus on Malaysian SMEs and the cross-sectional design may limit generalizability and causal inference. Future studies should adopt longitudinal approaches or extend the model across regions and industries. Practical implications: Findings will guide SME leaders and policymakers in embedding foresight and scenario planning into strategic processes to enhance competitiveness and readiness for future challenges. Originality/value: This study offers an integrated DCT-based framework linking foresight, scenario planning, and futures thinking, providing new insights into cognitive and strategic capabilities in SMEs.

PurposeThis research seeks to unveil an integrative perspective on talent management (TM) in small and medium-sized enterprises (SMEs), particularly through a multilevel approach and within the French context. Drawing on dynamic capability theory and focusing on French SMEs as a rich domain for multilevel studies, the research aims to elucidate how these enterprises operationalize TM while addressing and integrating their distinct capabilities and requirements, internal dynamics and challenges.Design/methodology/approachThrough an integrative study based on a qualitative approach, we collect data from 15 French SMEs. In total, 20 semi-structured interviews with individuals from different levels, managing and working in SMEs, were conducted and analyzed thematically to identify patterns across all SMEs. Companies and interviewees represented a variety of sectors such as telecommunication, high-tech, circular economy, etc.FindingsWe present an integrative multilevel approach through TM in French SMEs, describing how SMEs operationalize TM. Across three main levels (organizational, collective and individual) and key SMEs’ capabilities, our results underscore the significance of top management commitment capabilities and SMEs' assessment capabilities, the involvement of line managers in facilitating strategic agility and cultivating the talent ecosystem and the outcomes of TM in driving SMEs' reconfiguration, extending beyond mere TM-level integrations and articulations. We address these findings for foreign SMEs intending to enter the French context and SMEs’ actors on the importance of contextual issues and level articulations while calling for future research focusing on group-level and managers’ roles in TM.Originality/valueThis article moves the TM research towards an integrative multilevel view in SMEs as a fertile ground for studying multilevel TM. As part of recent studies on TM in French SMEs within the broader European competitive context, it expands the integrative approach in SMEs by accommodating the unique requirements, the multilevel dynamics and the challenges that they encounter with TM, especially when compared to multinational enterprises (MNEs).

Outward foreign direct investment (OFDI) of small and medium-sized enterprises (SMEs) from emerging economies has emerged as a significant phenomenon in global markets. However, extant research has not paid sufficient attention to this trend. Particularly, there is a lack of understanding of how SMEs’ internal resources may interact with their domestic institutional environment in driving OFDI. Drawing on the resource-based view and the institutional theory, this study fills this gap and examines how research and development (R&D) intensity influences OFDI frequency of SMEs from China, one of the largest emerging economies, and the moderating effects of coercive pressure, normative support, and mimetic force from SMEs’ domestic, regional institutional environment. Using a sample of 2620 Chinese SMEs publicly-listed on the Chinese Growth Enterprise Market during 2010–2017, we find that R&D intensity can be viewed as a key strategic resource that drives Chinese SMEs’ OFDI frequency and that three factors in their regional institutional environment (regional marketization, ties to industry associations, and peer OFDI frequency in the region) strengthen the relationship between R&D intensity and SMEs’ OFDI. This study contributes to the literature on SMEs’ OFDI by demonstrating the importance of combining the resource-based view and institutional theory to examine the roles played by both SMEs’ internal resources and their domestic institutional environment in driving their OFDI activities in emerging economies.

Purpose The purpose of this paper is to establish how small- and medium-sized enterprises (SMEs) in water, beverage, soap, detergent, metal fabrication, wood and furniture manufacturing industries can sustain or improve their competitive advantage by integrating specific resources and capabilities. The paper seeks to offer an alternative framework “resource capability-based view (RCBV)” that provides a strategic marketing direction for SMEs regarding how innovative marketing practices and dynamic marketing capabilities integrate to create sustainable market advantage. Design/methodology/approach This current paper employed a quantitative survey design with a positivist methodological research paradigm. The paper used a multi-stage stratified and simple random sampling technique to collect data from 591 manufacturing SMEs in Ghana. SMEs in water, beverage, soap, detergent, metal fabrication, wood and furniture manufacturing industries were sampled for the study. A structural equation model was employed to test the study hypotheses to arrive at the findings. Findings The study found that product design and packaging innovations, promotion innovations, retail innovations and pricing innovations provide sustainable market advantage for water, beverage, detergent and metal fabrication SMEs. The paper also found that new product designs and packages are the major drivers of sustainable market advantage followed by innovative retail outlets. The paper further originated that integrating marketing competence (marketing resources and marketing capabilities) and innovative marketing activities provides a marginal improvement in competitive advantage. Physical resources may result in market advantage but integrating physical resources with dynamic marketing capabilities provides sufficient competitive sustainability in a competitive market. Practical implications SMEs in water, beverage, soap, detergent, metal fabrication, wood and furniture manufacturing industries should prioritise their key marketing resources and capabilities in product designs, promotion, pricing and retailing innovations in order to sustain market advantage. Old products should not be faded from the market but rather SME managers should employ innovative retail strategies, such as eco-friendly advertising, product re-branding and digital platforms (social network sites and websites), which are important to sustaining market performance. Government must develop targeted policies to bridge the information gap between SMEs and research institutions such as universities through regular subsidised entrepreneurial training and creation of semi-annual industry-academic fairs. The main theoretical contribution of this current paper is the development of “RCBV” as a framework which shows how SMEs can integrate specific resources and capabilities to achieve sustainable market advantage. This framework offers an integrative view of conventional resource-based view and dynamic capability theory (DCT) which are independently examined in the literature. Originality/value This current study has proposed an integrated and elaborative approach to the conventional resource-based view and DCT which does not provide a composite understanding in the literature. SMEs may lack the needed resources and capabilities to introduce new products or extant product lines but this paper has demonstrated that how SME can sustain market advantage of existing product(s) by synchronously using specific marketing resources and capabilities. The proposed framework offers a guide for SMEs to integrate their physical resources and capabilities to sustain their market advantage.

In an era of rapid digital transformation, small and medium-sized enterprises (SMEs) are increasingly leveraging artificial intelligence (AI) and predictive analytics to enhance operational efficiency, optimize supply chain management, and improve overall business performance. This study explores the integration of AI-driven solutions in SMEs, focusing on their impact on demand forecasting, logistics optimization, and predictive maintenance. Using a mixed-methods approach, both quantitative and qualitative data were collected from 250 SMEs across various industries, supplemented by in-depth interviews with key decision-makers. The findings reveal that AI implementation leads to significant improvements in cost reduction (30% in logistics), operational efficiency (20% in inventory turnover), and predictive accuracy (15% improvement in maintenance planning). Despite these benefits, SMEs face challenges such as high initial investment costs, lack of AI expertise, and data management complexities. The study identifies best practices for overcoming these barriers, including phased AI adoption, strategic partnerships, and employee training programs. Additionally, the research highlights sector-specific AI applications, demonstrating its effectiveness in retail, e-commerce, and manufacturing industries. This study contributes to the growing discourse on AI adoption in SMEs by providing empirical evidence of its role in business optimization. It underscores the necessity of integrating AI into SME operations to remain competitive in a data-driven economy. The findings offer valuable insights for business leaders, policymakers, and technology providers, advocating for the development of AI frameworks that align with SME scalability and resource constraints. Future research should explore AI’s long-term impact on financial performance and sustainability, as well as its potential applications in emerging markets

This study investigates how artificial intelligence (AI) capabilities shape sustainable entrepreneurship (SE) among small and medium-sized enterprises (SMEs) in emerging economies. Focusing on knowledge management (KM) as a mediator, entrepreneurial orientation (EO) as a moderator, and government policy support (GPS) as an enabler, the research draws upon the Knowledge-Based View, Dynamic Capabilities Theory, and Institutional Theory. Using data from Saudi Arabian SMEs operating within the Vision 2030 agenda, the structural model demonstrates that AI primarily influences sustainability when firms possess robust KM systems capable of translating digital insights into actionable practices. Both EO and GPS strengthen the conversion of knowledge into sustainable outcomes, where EO fosters innovation and proactivity, and GPS provides essential resources and legitimacy. Nevertheless, excessive reliance on policy incentives may divert firms toward compliance rather than substantive transformation. Conceptually, this paper situates KM at the core of sustainability transformation, with policy support shaping the institutional context. The findings offer actionable guidance for SME managers and policymakers seeking to advance the United Nations Sustainable Development Goals (SDGs) through strategic engagement with AI and KM.

Small and medium-sized enterprises (SMEs) face significant challenges in financial decision-making due to resource constraints, limited access to capital, and unpredictable cash flow. To overcome these challenges, many SMEs are turning to artificial intelligence (AI) to improve efficiency and profitability. AI, through tools like machine learning and predictive analytics, has transformed how SMEs manage their finances, offering solutions that enhance accuracy, speed, and data-driven decision-making. AI-driven accounting tools are revolutionizing routine tasks such as bookkeeping, invoicing, and expense tracking. By automating these functions, SMEs can reduce human error, save time, and allocate resources more effectively. AI’s ability to integrate real-time data ensures that financial records remain up to date, enabling more accurate cash flow forecasting. For example, AI can predict liquidity needs based on historical data, seasonal trends, and market conditions, helping SMEs maintain healthy cash flow and avoid financial shortfalls. In addition to improving efficiency, AI plays a crucial role in optimizing revenue and profitability. AI-based pricing models allow SMEs to adjust prices dynamically, responding to market demand and competitor behavior in real-time. This data-driven approach ensures that businesses maximize revenue without compromising customer satisfaction. Moreover, AI helps SMEs identify high-value customers by analyzing purchasing patterns, preferences, and behaviors. By focusing on customer segmentation and tailored marketing strategies, SMEs can boost sales and customer retention. Despite the clear benefits, AI adoption in SMEs is not without challenges. High implementation costs, limited technical expertise, and concerns over data privacy can hinder the integration of AI tools. However, scalable, cost-effective AI solutions are becoming increasingly available, making it easier for SMEs to incorporate AI into their financial processes. As AI continues to evolve, it will play an even more significant role in helping SMEs navigate financial complexities, improve decision-making, and enhance long-term profitability.