Technological Innovation Capability in SMEs: A Systematic Review and Future Research Agenda

This study conducts a systematic literature review of how organisational characteristics and environmental uncertainty jointly shape the technological innovation capability (TIC) of small and medium sized enterprises (SMEs). The review draws on the resource-based view, dynamic capabilities theory and contingency theory to build an integrative analytical framework. Relevant articles were retrieved from Scopus and Web of Science using a structured search strategy and screened with PRISMA 2020 procedures. Fifteen peer reviewed studies published between 2016 and 2024 met the inclusion criteria. Descriptive analysis shows growing but fragmented attention to TIC in SMEs and uneven coverage of market, technological and policy uncertainty. Thematic synthesis indicates that structural flexibility, learning orientation, networking capability and investment in human capital are recurring drivers of TIC. The evidence on environmental uncertainty is more ambivalent. Moderate levels of market and technological turbulence often stimulate TIC, while high and persistent uncertainty can erode innovation investment in resource constrained firms. The review identifies gaps in theory integration, the treatment of multilevel contexts and the use of longitudinal and mixed methods designs. It proposes a future research agenda and offers implications for SME managers who seek to align internal capabilities with shifting environmental conditions.