An Empirical Analysis of Digital Adoption Drivers and Scalability Challenges in Mushroom Processing SMEs

Mushroom Processing SMEs are small and medium enterprises engaged in activities such as cleaning, slicing, drying, canning, and packaging of mushrooms for commercial sale. These units play a vital role in adding value, extending shelf life, and enhancing market reach for mushroom growers. Purpose: This study investigates how digital tools influence scalability in mushroom processing SMEs in Pune District. It aims to identify the critical drivers and barriers of digital adoption and how these affect operational growth, efficiency, and market expansion in this under-researched Agro-processing sub-sector. Design/methodology/approach: A mixed-method sequential exploratory design was adopted. Qualitative insights were gathered through semi-structured interviews with 15 SME owners and analysed thematically. These findings informed a structured quantitative survey administered to 105 respondents, analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The study integrated the Unified Theory of Acceptance and Use of Technology (UTAUT) and the Technology–Organization–Environment (TOE) framework. Findings: The study reveals that digital awareness, perceived return on investment (ROI), and traceability adoption significantly affect digital uptake. Digital literacy mediates this relationship, while firm size moderates the impact on business scalability. Qualitative insights highlight resistance due to low awareness and limited digital trust. Quantitative results show strong statistical support for the proposed model Research limitations/implications: The study is context-specific to mushroom processing SMEs in Pune, limiting generalizability. Further, while mixed methods enrich understanding, resource limitations constrained sample expansion. Future studies may replicate the model across different Agro-processing clusters in India or compare cross-country data. Practical implications: Findings offer actionable insights for entrepreneurs, policymakers, and ecosystem enablers to improve digital literacy and promote traceability practices. Interventions can include subsidized ERP tools, mobile-based training modules, and targeted digital skilling programs Originality Value: This paper bridges critical gaps by combining two theoretical frameworks—UTAUT and TOE—in the niche domain of mushroom processing. It is among the first to empirically link digital adoption with scalability outcomes in Indian Agro-processing SMEs, offering new contributions to the field of enterprise digital transformation.