Deconstructing Digital Transformation: A Multidimensional Analysis of Digital Literacy’s Role in Shaping Human Capital and Driving Organizational Success

Meena G () and Santhanalakshmi K.
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Meena G: Faculty of Management, SRM Institute of Science and Technology, Kattankulathur, Chengalpattu District, Tamil Nadu, India
Santhanalakshmi K.: Faculty of Management, SRM Institute of Science and Technology, Kattankulathur, Chengalpattu District, Tamil Nadu, India

Economics, 2025, vol. 13, issue 1, 405-430

Abstract: This study presents a comprehensive investigation into the multifaceted relationship between digital literacy, human capital development, and organizational performance in the context of digital transformation. Through a rigorous mixed-methodology approach combining quantitative surveys and real-time digital usage tracking, we analyzed data from 250 employees across 23 organizations spanning multiple sectors (technology 26.5%, finance 16.7%, healthcare 13.6%). The research employs structural equation modeling and demonstrates robust interrelationships between variables (correlations ranging r=0.689 to 0.817), with digital literacy and employee commitment exhibiting the strongest correlation (r=0.817). Statistical analysis reveals that human capital significantly mediates the relationship between employee factors and organizational performance, explaining 72.3% of performance variance (R²=0.723). All constructs demonstrated strong reliability (Cronbach’s α: 0.739-0.787) and convergent validity (AVE>0.5). Multiple regression analysis identified attitude (β=0.218) and human capital (β=0.184) as primary performance predictors, while frugal innovation showed significant influence (β=0.172, p

Keywords: Digital Transformation; Human Capital; Frugal Innovation; Employee Commitment; Digital Workforce; Knowledge Management (search for similar items in EconPapers)
JEL-codes: M20 O15 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:econom:v:13:y:2025:i:1:p:405-430:n:1017

DOI: 10.2478/eoik-2025-0018

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