The digital transformation of SMEs: the difference between east and west in China

Abstract

With the advancement and widespread application of digital technology, digital transformation (DT) is becoming an increasingly important aspect in the long-term development of Small and Medium-Sized Enterprises (SMEs). However, the facts show that the digital transformation process is delayed and has a significant impact on SMEs in China, particularly during the recent epidemic era. During the DT, Chinese SMEs face numerous problems and difficulties. Therefore, the purpose of this study is to compare the features of SMEs' digital transformation in China between economically developed eastern coastal districts and the economically undeveloped western mainland district. The advancement of research on the digitalization of SMEs is critical to the practical value of boosting the digital economy in China. This study employed a questionnaire to survey 318 SMEs in China. The result discovered a considerable disparity between SMEs in different regional economies: (a) Eastern SMEs are more advanced than western SMEs in terms of digitization, digital investment, digital awareness and maturity levels of DT, (b) SMEs in various industries demonstrate diverse present digitalization conditions; the tertiary industry demonstrated the most significant transformation will, while the secondary industry demonstrated better transformation process execution. As a result, the findings provide the Chinese government with practical implications on how to deal with post-epidemic economic shifts as well as policy recommendations for the long-term sustainable development of SMEs.