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In digital transformation, the importance of information and communications technology small‐ and medium‐sized enterprises (ICT SMEs) is growing, but their potential and strategic behaviors responding to digital transformation were not fully understood. We empirically analyzed Korean ICT SMEs' strategic decisions for developing and commercializing digital transformation technologies through a structural model of competencies, R&D strategies, and technological commercialization. We found that open innovation and internal R&D are significant mediators between their competencies and technological commercialization. Sectoral discrepancy is also identified: R&D employment and open innovation positively influence on technological commercialization in ICT service, while patenting and internal R&D are significant for ICT manufacturing.

Firms have been undergoing a fundamental transformation of the Fourth Industrial Revolution, and the transformation is driven by the adoption and development of innovative technology such as big data or artificial intelligence. While the impacts of the Fourth Industrial Revolution technology on economic performance have been actively documented, Korean firm-level data indicates that still, the majority of firms have not yet utilized the Fourth Industrial Revolution technology. Hence, this study examines determinants and propensity for adopting and developing the Fourth Industrial Revolution technology. Probit model estimations show that size, internal R&D intensity, the ratio of intangible assets to the sum of intangible and tangible assets, and patent rights are positively associated with adopting and developing the innovative technology, while there are sectoral differences. Notably, a strategic alliance is the most substantial factor for the propensity of adopting and developing the Fourth Industrial Revolution technology. In sum, this study finds that not only internally accumulated intangibles and R&D investment but also active collaboration with other firms can facilitate diffusion of the Fourth Industrial Revolution technology. Therefore, building up the environment to prompt collaboration can be another effective way to accelerate transformation in addition to supporting R&D and intangible investment.

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