Drivers of SME Digital Transformation in the Context of Intergenerational Cooperation in Slovakia

Drivers of SME Digital Transformation in the Context of Intergenerational Cooperation in Slovakia

Anna Pilková, Marian Holienka, Juraj Mikuš
DOI: 10.4018/978-1-7998-9008-9.ch017
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Digital transformation is one of the key recent trends in business organizations, entire business sectors, and whole economies, and it reflects the recent economic, social, and technological challenges across societies. One of such challenges is the intergenerational context of (not-only) business enterprises that has become apparently relevant in recent years. In the following chapter, the authors offer a blended perspective on these two phenomena, with a purpose to examine the lived experiences of small business owner-managers from various generational groups with an aim to identify the key drivers, and experiences with digital transformation in Slovakia with the emphasis on the intergenerational cooperation. This chapter starts with introducing the context of the subject under investigation and explaining its background. Then, the empirical research undertaken by the authors is explained, its results are presented and discussed, and conclusions are offered.
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Entrepreneurship is one of the key drivers of the economic, social, and environmental development of society. Recent economic, social, and technological trends, such as fair sustainability of economic growth, digitalization and the industry 4.0, population aging, and the growth of the silver economy present many challenges that manifest into a change of typology of competitive advantage, nature of jobs, jeopardy of a significant proportion of jobs, to new requirements on knowledge and skills, but also lifestyle of individual groups of the population. These trends also pose challenges for the sustainability and development of entrepreneurial activities and need to be flexibly responded by finding new approaches to solve them. Europe is facing an industrial transformation that is part of long-term and structural global changes. Up to 70% of European businesses report a threat to their investment due to a lack of skills, while it is a particular challenge for SMEs (European Union, 2019). In Slovakia, SMEs represented 99,9% of all business entities, employed close to 70% of employees and contributed to the export by 40% as of 2019 (SBA, 2020).

The topic of digitalization and digital transformation has been pronounced in Slovakia since 2019 when the Government approved the 2020 Digital Transformation Strategy for Slovakia (Ministry of Investments, Regional Development and Informatization of the Slovak Republic, 2019). The aim of this document is for Slovakia to become a modern country by 2030 with an innovative and ecological industry benefiting from the digital knowledge and data economy, with an efficient public administration ensuring intelligent use of land and infrastructure, and with an information society whose citizens will reach their full potential and live a quality and safe life in the digital age. The document defines the policy and specific priorities of Slovakia in the context of the ongoing digital transformation of the economy and society under the influence of innovative technologies and global megatrends of the digital age. The strategy places primary emphasis on current innovative technologies, such as Artificial Intelligence, the Internet of Things, 5G Technology, Big Data, and Analytical Data Processing, blockchain, and supercomputers, which will become a new engine of economic growth, strengthening Slovakia's competitiveness. This document is followed by the Action Plan for the Digital Transformation of Slovakia for 2019-2022. It covers all areas of the vision of Slovakia's digital transformation in the fields of the economy, society and education, public administration, territorial development, and research. Despite the existing institutional framework, there is still a shortage of information on SMEs adoption level and how they cope with the ongoing digitalization and digital transformation, especially under the COVID-19 situation.

There is no doubt that key skills in the field of entrepreneurship are influenced by digitalization. Digitalization transforms entrepreneurship in two ways. First, it is the emergence of new entrepreneurial opportunities in the economy. Secondly, it is about transforming business practices, the ways in which these opportunities are best realized. Digitalization has an impact on the radical change/innovation of business models in entrepreneurship (Autio, 2017). This change affects both entrepreneurs in the early stages of entrepreneurship (starting entrepreneurs) and existing small and medium-sized enterprises (established entrepreneurs). As far as starting entrepreneurs are concerned, the new entrepreneurial dynamics will affect both those who want to start a business (stand-up stage and that will affect their choice), those in the start-up stage (in search of a scalable business model) as well as those who are already in the growth phase and have already found a scalable business model. In established small and medium-sized companies, digitalization affects their business models as well as their overall management systems (Autio, 2017). As for the particular benefits related to digitalization of SMEs, the most frequent positive effects include improved financial performance (Eller et al., 2020; Nwankpa and Roumani, 2016; Rivza et al., 2019), improved communication and outreach towards customers through digital channels (Rivza et al., 2019), and developed internationalization capabilities (Dethine et al., 2020; Herve et al., 2020),

Key Terms in this Chapter

Owner-manager: A person who owns (entire or a part of) a business enterprise and at the same time is actively engaged in its business management.

Intergenerational Entrepreneurship: Sharing knowledge, skills, experience and resources through partnerships and collaboration between different age generations (emphasizing seniors and youth) in starting and running a business enterprise.

Digital Capabilities (in Case of a Business Enterprise): Digital technology skills possessed by the people within a business enterprise that enable the enterprise to undertake digitalization and/or digital transformation and to remain operable in a digital environment.

Digitalization (in Case of a Business Enterprise): Integration of digital technologies into everyday life, activities and operations of an enterprise. Replacing former social and/or technical aspects of products, services, user experiences, processes, etc.

Small and Medium Sized Businesses: A business entity with less than 250 employees and less than 50 mil. EUR in annual turnover or balance sheet total of 43 mil. EUR (according to the size classification of the European Union). Typically, it does not reach the stage where ownership and management are separated.

Digital Transformation: Engagement of digital technologies leading to strategic disruptions of organizations in terms of increasing their strategic relevance and altering the ways how an organization generates value, and/or its organization structure and systems.

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