How do digital technologies influence the dynamic capabilities of micro and small businesses in a pandemic and low‐income country context?

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It is not clear how extreme disruptions like COVID‐19 pandemic affects the dynamic capabilities (DCs) of micro and small businesses (MSBs) in the context of low‐income countries. Therefore, this study makes sense of how MSBs leverage DCs through digital technologies (DTs). Using mixed‐method and interpretive research approaches, the first phase of the study applied a deductive coding technique to analyze interviews from 30 MSB managers in Ghana. Coding activities revealed 21 DC constructs of MSBs in Ghana. Next, we contextualized and simplified the DC framework by proposing an interpretive blueprint of DC framework applicable to Ghana and other low‐income countries. The second phase, through a questionnaire, progressed the research by assessing how DTs influence the 21 DC constructs. Findings suggest that collective DCs of MSBs as a business sector did not change in a pandemic situation; nonetheless, the extent to which MSBs demonstrate DCs increased by up to 82%; and the use of DTs such as mobile payment and social media tools increased significantly. Interpretive reflections on the research outcomes argued that whilst the collective DCs of MSBs remain the same, each MSB uniquely explored opportunities by manifesting different combinations of DC constructs and DTs, at varying extents, and the knowledge of how MSB combines DCs could promote MSB management and digital innovation as low‐income countries seek to recover from the COVID‐19 economic downturn. Consequently, this research extends literature and progresses the UN sustainable development goals 8.3 as it helps to enhance policies that promote digital innovation, entrepreneurship, and growth of MSBs.