Digitalization and Smes’ Sustainable Performance: A Conceptual Framework in the Context of Wuhan, China

Abstract

Digitalization has emerged as a transformative force for small and medium-sized enterprises (SMEs), enabling them to enhance operational efficiency, competitiveness, and long-term sustainability. However, the extent to which digitalization influences SMEs’ sustainable performance—spanning economic, environmental, and social dimensions—remains underexplored, particularly in the context of Wuhan, China. This conceptual paper aims to develop a theoretical framework that examines the role of digitalization in driving SMEs’ sustainable performance by integrating the Resource-Based View (RBV), Dynamic Capabilities Theory (DCT), and Institutional Theory. The study highlights key enablers and barriers to digital adoption among SMEs and emphasizes the significance of government policies, organizational digital capabilities, and sustainability-driven digital strategies. By synthesizing existing literature, this paper provides a structured conceptual model to guide future empirical research and policy development. The findings offer valuable insights for SME managers, policymakers, and researchers, underscoring the need for strategic digitalization investments, institutional support, and capacity-building initiatives to foster sustainable business growth.