The Role of Absorptive Capacity and Employee Empowerment in Digital Transformation of SMEs

Abstract

Digital transformation is a challenging task for companies and is frequently emphasised as being especially difficult for SMEs as they may be constrained on resources for large investments in new technology, lacking high-tech competences and without clear vision of digitalisation. Learning factories has emerged as a field of research, which addresses challenges of digital transformation. This is typically done via digital or physical learning factories focused on training skills and competences for specific technologies, strategic aspects of digitalisation and overall benefits of technology. While the learning factory research so far has focused on how to teach/learn new technological skills, we argue that embracing new processes or technologies relies not only on developing specific technological skills; it also relies heavily on developing the right organisational environment, which supports knowledge creation, knowledge sharing, continuous learning, and empowerment. We propose that a valuable addition to the learning factory research may be reached through the question: “Which practices do SMEs use to facilitate organisational anchoring of new knowledge gained through learning factories?” We approach this question based on empirical research of two SMEs that have participated in learning factory processes. The study follows a case study methodology and draws on interviews and observations from workshops with managers from the two companies. In particular, when dealing with learning factory programmes aimed towards Industry 4.0 in SMEs, we emphasise: (i) It is important to consider the organisational environment of the SMEs regarding their ability to empower employees and assimilate new knowledge in their organisation, i.e., their absorptive capacity, and (ii) learning factories have the potential to support a company's absorptive capacity.