Digital readiness of small and medium enterprises in emerging markets: The construct, propositions, measurement, and implications

Digital readiness is becoming increasingly critical for resource-constrained small and medium enterprises (SMEs) to remain competitive. However, despite its necessity, there is a limited understanding of the digital readiness of SMEs, especially in emerging markets. Employing a multi-study, multi-method approach involving qualitative interviews and quantitative surveys with SME owners in emerging markets (E-SMEs), this work conceptualizes the digital readiness of E-SMEs and identifies its key drivers. In Study 1, using a qualitative grounded-theory approach, we identify five themes and offer 11 propositions elaborating on the key factors that affect E-SMEs’ digital readiness. In Studies 2 and 3, using surveys, we develop, test, and validate a multi-item measurement scale of digital readiness characterized by three dimensions: technological sensemaking, agility, and implementation. We draw important insights from our studies and discuss their managerial and policy implications for E-SMEs.