Sustainability of SMEs in the Competition: A Systemic Review on Technological Challenges and SME Performance

Abstract

In the era of economic globalization, small and medium enterprises (SMEs) are recognized as an engine of sustainable economic development in both the developed and developing world. In literature, three competitive challenges-the sustainability challenge, the global challenge and the technological challenge-faced by industrial entities in the current globalized economy, are categorized. Of them, this paper undertakes a systemic review of the literature covering the theme of SMEs and technology in order to identify how technological progress in the SMEs, correlates with SMEs survival improvement in the global competition. The review identified six driving forces-social capital, link with Multi-National Corporations (MNCs) and Transnational Corporations (TNCs), innovation, sharing and networking, information technology, and adoption of productivity-enhancing technology-influencing technological upgrade in the SMEs. The review also identified two conditions for successful technological adaptation in the SME sector-availability of technologically skillful workforce in the economy, and identification of opportunities of new technologies in the competition. These conditions could be viewed in the macro environment and emphasize the need for the economies' readiness towards SMEs' success.

A Review of Global Challenges and Survival Strategies of Small and Medium Enterprises (SMEs)

“…At present, the economic competition is seen in global domains, and it has become severe after the 1980s with economic globalization (Gunday et al 2011) and turned more severe after accessing the WTO trade regime in 1995. As SMEs build a vital corporation to the economies in developed and developing countries, it is vital to consider the influences of economic competition on SMEs than other industries due to industry-specific features such as low technology base, high concentration in the labor-intensive sector, low entry barriers, relatively low fixed costs of production, and mainly producing price-taker goods (Sener et al 2014;Prasanna et al 2019). Today, the WTO is the leading multilateral organization which governs the global trade and promote the free trade conditions in the global economy.…”

“…The MNCs have primarily influenced the increased product competition in the global market due to their monopolistic practices and production and distribution merits under strong economies of Scale (Prasanna et al 2019). This trend has become a challenge for SMEs due to the increased domination of domestic and global markets by the MNCs in the economic globalization era.…”

“…Firstly, it might incur costs, and secondly, local suppliers provide instead of any technological assistance from TNCs (Chew and Yeung 2001). Besides, TNCs might not transmit their technical potentiality if there is no reciprocal transmission technological knowledge of know-how arriving from SMEs (Prasanna et al 2019). However, local organizations are more considered of local knowledge and soft technology than TNCs, and thus, soft technology indicates the procedure and product technologies (Chew and Yeung 2001).…”

Organizational and Environmental Factors with the Mediating Role of E-Commerce and SME Performance

“…Most of the prior researchers paid less attention to which indicators should be included in SMEs' performance and how SMEs' performance should be measured [26]. Mainly scholars have measured the SME's performance with profit, survival, value, growth, and public image [27].…”

Innovative Perspective of Marketing Engagement: Enhancing Users’ Loyalty in Social Media through Blogging

“…To be competitive, firms have to face sustainability, global, and technological challenges. For adaption of successful technological challenge, it is mandatory to have skillful workforce and to identify new opportunities [11]. This study argues that social media can be this potential and new opportunity.…”