Antecedents and Outcome of Digital Innovation in Small Business Owners: Focusing on the TOCE Framework*

Purpose: In this study, variables are selected from the TOCE perspective of technological characteristic variables, organizational characteristic variables, CEO variables, and environmental variables among several leading variables that affect the digital innovation of small business owners, and the impact of these digital innovations of small business owners on business performance is examined. The purpose was to provide implications through empirical analysis. Research design, data, and methodology:To achieve the purpose of this study, hypotheses were derived through literature research, and the process model was verified through empirical analysis along with theoretical consideration. To collect data, a sample was extracted from 296 small business owners who carry out digital marketing and employees with decision-making authority within the organization through an online panel survey specialist company, and the results of testing the hypotheses are as follows. Results:The results for Study revealed that, first, it was confirmed that technological factors had no significant effect on the introduction of digital innovation by small business owners. Second, from an organizational perspective, the organization’s technological capabilities were found to have a significant positive impact on the introduction of digital innovation, while the vulnerability of the organization’s professional manpower was found to have a negative impact. Third, the CEO’s innovativeness was found to have a significant positive impact on the adoption of digital innovation by small business owners, but the CEO’s support was found to be statistically insignificant. Fourth, in terms of environmental factors, customer pressure and government support had a statistically significant positive impact, while the positive relationship between competitor pressure and digital innovation of small business owners was found to be insignificant. Lastly, digital innovation of small business owners was confirmed to have a positive effect on business performance. Conclusions: First, the introduction of digital marketing by small business owners is still at the basic stage and does not contribute directly to profits, and small business owners who remain at the self-employment level find it difficult to expand their business or show significant differences in competitiveness from other businesses, so they cannot properly achieve the effects of digital marketing. There are aspects that are more difficult to perceive. Through the use of various social media, various practical promotional methods should be considered, such as on-site visits and interviews with small business owners who are showing results after introduction. Second, the introduction of digital innovation by small business owners requires the CEO’s understanding and execution ability of new technologies or systems, and innovations that are already providing services by introducing new technologies or have positive thoughts about new digital marketing increasing the proportion of well-established small business owners appears to be meaningful in introducing digital innovation. Third, in the case of small business owners, there is no significant differentiation between competitors, and it can be seen that small business owners with low entry barriers and high livelihood characteristics are more sensitive to customer feedback. Additionally, it can be seen that expectations and dependence on government support are high when introducing digital innovation. Therefore, government authorities proactively encourage the introduction of digital marketing to increase experience with digital innovation and reduce resistance to digital innovation through this experience, gradually improving awareness of small business owners to lead innovation themselves without relying on the government. There is a need to gradually promote digital innovation.