Technological Factors and Digital Innovation Adoption: Insights from Family-Owned MSMEs in an Emerging Economy

Vollständiger Abstract

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Innovation through digital technologies, or digital innovation adoption (DIA), is of great importance to the success of family-owned micro-, small- and medium-sized enterprises (MSMEs) in today’s rapidly changing digitally driven business environment. These digital changes, which impact markets and business models, as well as products and services, are becoming increasingly frequent and highlight the technological influences on family businesses. Given the need to understand these influences on DIA in the context of family businesses, this study investigated the relationships between several technological factors and DIA among Kenyan family-owned MSMEs, as well as the relationship between DIA and the financial performance of these businesses. An online survey was administered, and a structured measuring instrument was used for data collection. Structural equation modelling was used to test the hypotheses, based on 355 usable questionnaires. The findings highlighted that the technological factors, particularly compatibility and cost, were related to DIA, and that DIA, in turn, was related to the perceived financial performance of Kenyan family-owned MSMEs. The study expanded family business research to non-Western contexts and responded to calls to investigate both digital innovation and the external factors that influence innovation adoption in the context of family businesses. These findings provide valuable insights to researchers, practitioners and policymakers working with smaller family businesses in Kenya that have relatively low levels of digital maturity, particularly regarding technological factors associated with DIA, and the MSMEs’ ability to compete in an increasingly digital global environment.