Towards Sustainable Digital Innovation of SMEs from the Developing Countries in the Context of the Digital Economy and Frugal Environment

Zahid Yousaf, Magdalena Radulescu, Crenguta Ileana Sinisi, Luminita Serbanescu and Loredana Maria Păunescu
Additional contact information
Zahid Yousaf: Higher Education Department, Government College of Management Sciences of Manshera, Mansehra 23100, Pakistan
Magdalena Radulescu: Department of Finance, Accounting and Economics, University of Pitesti, Str. Targu din Vale, no.1, 110040 Pitesti, Romania
Crenguta Ileana Sinisi: Department of Management and Business Administration, University of Pitesti, Str. Targu din Vale, no.1, 110040 Pitesti, Romania
Luminita Serbanescu: Department of Finance, Accounting and Economics, University of Pitesti, Str. Targu din Vale, no.1, 110040 Pitesti, Romania
Loredana Maria Păunescu: Department of Cybernetics, Economic Informatics, Finance and Accounting, Petroleum-Gas University of Ploiesti, 100680 Ploiesti, Romania

Sustainability, 2021, vol. 13, issue 10, 1-28

Abstract: This study aims to explore the direct impact of the digital orientation, Internet of Things (IoT) and digital platforms on the sustainable digital innovation in the context of the digital economy and frugal environment. This study also investigated the mediating role of the digital platforms in these relations. The study was based on the quantitative research design and data were collected from the 397 CEOs and managing directors of Small and Medium Enterprises in Pakistan. Correlation and structural equation modeling approaches were applied for the analysis and testing of the hypotheses. Results revealed that the digital orientation, IoT and digital platform are major antecedents of the sustainable digital innovation. Results also show that the digital platforms mediate between both digital orientation-sustainable digital innovation link and IoT-sustainable digital innovation link. The rapid pace of change in the technology has forced the business organizations to think out of box and align their operational mechanism accordingly. The need for the sustainable digital innovation is a major need of the current decade for meeting the increasing demands of the society in a sustainable way. Organizations, especially SMEs, should be able to deal with these challenges and rapid technological transformations through cost effective frugal business models. The frugal innovation is an important element of sustainable digital innovation enables SMEs to reduce resources usage and waste and to enhance sustainable economic activities. In this way, they can develop and gain advantages in this highly competitive digital environment. This is the first study showing the bright harmony of the digital orientation, IoT and digital platforms for achieving the sustainable digital innovation in the rapid evolving digital economy.

Keywords: sustainable digital innovation; digital economy; digital orientation; Internet of Things (IoT); digital platform; SMEs; developing economies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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