SMEs, digital transformation and sustainable development: a systematic review of barriers, enablers and outcomes

Although SMEs play a critical role in the employment market, economic growth, and sustainable development, their adoption of Industry 4.0 technologies in emerging economies remains fragmented. Although the volume of literature on the digital transformation of SMEs has increased, the concepts in the body of knowledge remain fragmented, discussing challenges, facilitators, and results in isolation. To mitigate this issue, 81 peer-reviewed articles published between 2010 and 2024 were reviewed, and the results demonstrate the significance of leapfrogging as a key facilitative approach that the resource-constrained SME segment employs to artfully convert challenges into opportunities for rapid innovation. The article discusses the usefulness of the Barrier-Enabler-Outcome approach, combined with the Resource-Based View, Dynamic Capabilities Theory, and Institutional Theory, for understanding frugal innovation. To inform and frame sustainable, resilient, and inclusive Industry 4.0 technology adoption, the authors develop the Frugal Leapfrogging Model. This model enriches the theory of digital transformation and provides relevant insights for entrepreneurship policy and the development of SMEs.