The Impact of Digital Technology, Digital Capability and Digital Innovation on Small Business Performance

Abstract

Nowadays, IT plays a key role for SMEs in boosting sustainable business performance. Unfortunately, Malaysian SMEs have been confronting some challenges such as failure to adapt technology, rapid technology change and high technology cost. It was claimed that Malaysian SMEs might be wiped out soon unless they master digital technology. To fill this gap, this paper aimed at identifying the level and examining the relationship between digital technology, digital capability and digital innovation toward Batu Pahat’s business by using the quantitative method focused on survey questionnaire to collect, analyze gather data and using SPSS software to test the hypotheses from the shops in Batu Pahat district. Some 120 online questionnaires were collected. The stratified sampling technique was used in this research. This research found a strong positive relationship between digital technology, digital capability and digital innovation toward business performance. Digital has both tangible and intangible benefits that will help companies profit and deliver customer expected outcomes.