THE ROLE OF DIGITAL TRANSFORMATION IN ENHANCING INNOVATION WITHIN SMES IN FOOD INDUSTRY

Abstract

Restaurant business in Kazakhstan operates in a dynamic environment with fast changing trends and consumer demands. This creates numerous operational and economical challenges for the SMEs, despite the growing market. Thus, continuous innovation stands as a key for survival. This study aims to assess the digital transformation’s impact on the innovation capabilities of SMEs in Kazakhstan. After careful literature review, key factors chosen as enablers of innovations are ‘technology adoption’, ‘data analytics’, ‘supply chain integrity’, ‘operational efficiency’, ‘employee skills & training’. Data was collected from 57 SMEs in Astana through an online survey. Structural Equation Modeling with Partial Least Squares (SEM-PLS) was utilized for relationship analysis between key factors. The results indicated a significant effect of digital transformation on innovation performance. The strongest relationships were defined between pairs of technology adoption - operational efficiency (r = 0.687) and data analytics - employee skills & training (r = 0.583). Additionally, SMEs refer to the limited overall budget for DT initiatives as the most significant barrier. Limitations of the study are small sample size and few indicators for each latent variable.