[Purpose] Our study aimed to empirically analyze the impact of digital transformation maturity on the innovation outcome of small- and medium-sized exporters (SMEs) in Korea. Specifically, we examined the synergies created by internal innovation capab...
[Purpose] Our study aimed to empirically analyze the impact of digital transformation maturity on the innovation outcome of small- and medium-sized exporters (SMEs) in Korea. Specifically, we examined the synergies created by internal innovation capabilities and external government support in the relationship between digital transformaton maturity and innovation outcome.
[Methodology] The final sample consists of 943 small- and medium-sized exporters.. The dataset was constructed by combining information from companies that participated in the 'Smart Factory Dissemination and Diffusion Project' by the Ministry of SMEs and Startups between 2018 and 2022, along with financial and patent data provided by Korea Enterprise Data. digital transformation maturity was classified into four stages—'Vulnerable', 'Basic', 'Moderate', and 'Excellent'—based on the project's implementation stages. Innovation outcome, was measured by the number of patent applications. A multiple regression analysis was conducted to identify causal relationships; a hierarchical moderated regression analysis including interaction terms was performed to test the moderating effects of innovation capabilities and government support.
[Findings] The verification of the main effect revealed that higher digital maturity has a positive effect on innovation outcome. Notably, the improvement in innovation outcome was most pronounced during the initial transition phase from the 'Vulnerable' to the 'Basic' stage. In addition, testing for moderating effects showed that a firm's internal innovation capabilities not only positively influenced innovation outcome directly but also significantly strengthened the positive relationship between digital maturity and innovation outcome. Conversely, government support had little direct or moderating effect on innovation outcome.
[Implications] Academically, we empirically tested the effects of SMEs’ digital transformation in South Korea's flagship manufacturing industries, moving beyond the limitations of previous studies that primarily focused on large corporations or global information technology firms. Practically, the findings of out study suggest that to maximize competitiveness, firms should organically align their digital transformation strategies with innovation ones and employ a flexible approach that actively utilizes open innovation and external networks to supplement scarce resources. Finally, from a policy perspective, we proposed sophisticated, customized support that encompasses software-oriented indirect support by precisely diagnosing the ‘digital maturity’ and internalization capabilities of individual firms.