A Study on Impact of Technology Adoption and Digital Capability towards the Operational Innovation and Performance of MSME

Purpose – “The purpose of this paper is to study the effect of technology adoption and digital capability on operational innovation and performance of the MSMEs by taking an example from the Regional OEM sector in Chengalpattu districts in Tamil Nadu, India.” Design/methodology/approach – “This paper develops a conceptual model encompassing Digital Capabilities, Technology Adoption, Operational Innovation and Performance. We use the Structural Equation Modeling (SEM) to validate this model with 201 MSME employees, supervisors and managers in the OEM Sector.” Findings – “The empirical results of our data analysis showed that Technology Adoption positively impacted the operation Innovation and Digital Capability has a significant impact on operational Performance. Besides our data indicates that Technology Adoption and Digital Capabilities do not have significant impacts on operational Performance and Innovation, respectively.” Practical implications – “With that enhanced understanding, OEMs can spotlight their actions on how to improve their Operational Performance and help them to improve the innovative work environment which helps further to perk up their firm’s competitiveness provoked by the Technology adoption mindset in MSMEs.” Originality/value – “There is a scarcity of research concerning the MSME's development with present advanced technological improvements, this study is believed to be the first that caters to the study on the impact of technology adoption and digital capability on MSMEs for improving operational competitiveness in OEMs with a practical approach.”