Digital Capability and Performance of Micro, Small, and Medium-Scale Enterprises: A Review

Abstract

Digital Capability is considered one of the cardinal strategies that MSMEs can adopt to enhance their competitiveness and improve performance. However, several business enterprises continue to experience various setbacks, such as poor performance and slow growth, where almost 70 percent of SMEs close their businesses before their third year in operation. This may be attributed to an unfavorable business environment and rapid technological changes, requiring an equal and efficient change in business strategy. This paper, therefore, sought to assess the effect of digital capability on the performance of micro, small, and medium enterprises. Specifically, the study aimed to evaluate the influence of digital infrastructure, organization competency, and digital operations on the performance of Micro, Small, and medium-scale enterprises. The study adopted a qualitative survey design where the scholar did a literature search on different online databases, mainly Google Scholar, EBSCO, and Science Direct. The study was desk research, which involved reviewing academic journals, scholarly articles, and published research. The findings indicated that digital infrastructure, organization competency, and digital operations significantly positively affected the performance of micro, small, and medium enterprises. The study recommended that further studies be carried out using quantitative techniques to assess further the relationship between digital capability and the business sustainability of MSMEs