Beyond the basics: how digital transformation, orientation and competence fuel SME performance through resilience in the manufacturing sector

Purpose In emerging economies such as Pakistan, SMEs have a high failure rate, underscoring the need to understand what drives SME performance. This paper fills a knowledge gap by considering the impact of digital transformation, entrepreneurial orientation, entrepreneurial competencies and entrepreneurial resilience on SMEs' performance. Entrepreneurial resilience serves as a mediator between digital transformation, entrepreneurial orientation, entrepreneurial competencies and SME performance. Finally, environmental dynamism (ED) is used as a moderator between entrepreneurial resilience and SMEs' performance. Design/methodology/approach Data were collected from 453 managers of manufacturing SMEs in Punjab, Pakistan. Partial Least Squares Structural Equation Modeling is used for hypothesis testing. Findings Digital transformation, entrepreneurial orientation and entrepreneurial competencies have a significant and positive influence on entrepreneurial resilience and SME performance. Entrepreneurial resilience significantly enhances SMEs' performance. Additionally, entrepreneurial resilience significantly mediates the relationships among digital transformation, entrepreneurial orientation, entrepreneurial competencies and SME performance. Finally, ED significantly moderates the relationship between entrepreneurial resilience and SMEs' performance. Practical implications SME managers should prioritize digital transformation, entrepreneurial orientation, competence, resilience and ED to measure SMEs' performance. Policymakers can support these efforts by developing adaptive frameworks that enable SMEs to remain competitive in dynamic environments. Originality/value This is initial research that integrates digital transformation, entrepreneurial orientation, entrepreneurial competence, entrepreneurial resilience and ED to examine SME performance within the resource orchestration theory (ROT).