Technology Adaptation and Survival of SMEs: A Longitudinal Study of Developing Countries

In the current era of internationalizing business activities and globalizating markets, technology has become an essential tool for enhancing market competitiveness. With globalization, a country's economic and business scenarios can change drastically. Many companies have seized on opportunities to pursue, and sometimes achieve economies of scale. Especially in some countries, however, the technological revolution creates significant challenges for small business entrepreneurs. Technological development plays a pivotal role in making small and medium enterprises (SMEs) competitive, as well as leading to sustainable growth. Under such circumstances, it is relevant to consider a country's technological environment for ways that can lead SMEs towards sustainable development. In the present study, we explore the impact of volatility in technological environments on the sustainability of SMEs in developing countries with emerging economies. We use the Global Competitive Index Report for the period 2012-2016, in which six parameters were applied to define the technological environment of developing nations. Two factors, namely, institutional capabilities and external capabilities emerged as significant factors according to factor analysis. We also studied the impact of emerging factors in new technological environments on the sustainability of SMEs in the specific time period using a regression analysis. The results indicate that both institutional capabilities and external capabilities become significant when time is taken as a selection variable. The high significance of the time variable indicates the dynamism of today's technological environments. As well, institutional capabilities were found to have a strong impact on a business' sustainability, in comparison with external capabilities and the high level of technological volatility.