Pathways to digital entrepreneurship adoption among Malaysian SMEs: Analysing the determinants and technology readiness dynamics

Abstract This study explores the key factors influencing digital entrepreneurship (DE) adoption among Malaysian SMEs within the framework of technology, organisation, and environment (TOE), with a particular focus on how technology readiness moderates these effects. Using a cross-sectional survey of 307 SME owners and managers, the research employs SPSS and PLS-SEM to analyse the data and test hypotheses. The results reveal that relative advantage, compatibility, complexity, employee knowledge, and competitive pressure significantly drive digital transformation efforts. Interestingly, organisation size and government support do not exert substantial influence. The role of technology readiness, assessed through the Technology Readiness Index (TRI), emerged as a critical moderator: traits like optimism and innovativeness amplify positive relationships between compatibility, organisation size, and DE adoption, while discomfort and insecurity significantly affect how perceived relative advantages, complexity, and government support impact this process. These findings contribute empirical evidence from the Malaysian context, underscoring the importance of technology readiness in shaping digital transformation in SMEs. The insights gained provide actionable guidance for policymakers and entrepreneurs alike, emphasising the need to tailor strategies that enhance positive TRI dimensions to foster wider adoption of DE. Ultimately, this research enriches the understanding of DE adoption dynamics within emerging markets, offering a nuanced perspective that integrates technological attitudes with organisational and environmental factors, thereby supporting future efforts to accelerate digital transformation among SMEs in Malaysia.