ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

Role of Technology and Innovation in the Success of SMEs

Doctoral Project

Presented to the Faculty

School of Business

California Southern University

in partial fulfillment of the

requirements for

the degree of

DOCTOR

OF

BUSINESS ADMINISTRATION

By

Yusuf A Memon

June 2020

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

DEDICATION

To Noor, Janu, Amna & Shagufta Memon, my family who supported me financially,

emotionally, and never gave up on me.

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ACKNOWLEDGMENTS

My goal was unreachable without the support and love from all the people that made it possible.

I also must acknowledge Allah S.W.T, who gave me the strength and wisdom to pursue this

degree and get this far. I recognize the continued efforts of Dr. Stephanie Hoon, the Committee

Chairs, and their attempts at guiding me through this process. Ensuring I gain maximized

benefits and produce quality content. Section in progress…

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

ABSTRACT

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

TABLE OF CONTENTS

Contents
DEDICATION............................................................................................................................................ii
ACKNOWLEDGMENTS..........................................................................................................................iii
ABSTRACT...............................................................................................................................................iv
TABLE OF CONTENTS.............................................................................................................................v
LIST OF TABLES......................................................................................................................................vi
LIST OF FIGURES...................................................................................................................................vii
ABBREVIATIONS..................................................................................................................................viii
CHAPTER ONE: OVERVIEW OF THE STUDY..................................................................................................1
Background of the Study........................................................................................................................1
Problem Statement.................................................................................................................................2
Purpose of the Study..............................................................................................................................3
Scope of the Research.............................................................................................................................3
Theoretical or Conceptual Framework...................................................................................................4
Methodology...........................................................................................................................................6
Research Questions................................................................................................................................7
Significance.............................................................................................................................................8
Limitations..............................................................................................................................................8
Summary of Chapter 1/Preview of Chapter 2.....................................................................................8
Organization of Remaining Chapters......................................................................................................9
Gaps in the Research.................................................................................................................................9
References................................................................................................................................................10

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

LIST OF TABLES

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

LIST OF FIGURES

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

ABBREVIATIONS

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

CHAPTER ONE: OVERVIEW OF THE STUDY

Background of the Study

The dynamics of decision making within an organization, especially for productivity,

lead to the use of different tools that serve as a reference. In turn, it helps to glimpse behaviors

that are part of a living system such as organizations, which are affected by multiple factors that

are part of their environment (Maldonado, 2011). Technological progress is the leading cause of

the productivity of the economy of an organization. Moreover, technology policy measures must

be designed in an appropriate way to avoid adverse effects on product innovation (Castaño,

2012). This study will be carried out with a qualitative approach to analyze a bibliographic

review of the sources related to the topic covered in this investigation. This study benefits the

tools, documents, and information about SMEs that they can obtain by relying on technology and

innovation. A literature review will identify the elements that provide SMEs with the tools to

take advantage of technology, and along with that, the focus will be on the success factor of

innovation.

The impact of innovation on the SMEs' performance is evident in an empirical study that

shows that small entrepreneurs are more productive due to technological management,

innovation, and business competitiveness. Because of this, the need arises to determine if

innovation, productivity, and technology are factors of the success of SMEs. However, the

relationship between innovation, technology use, and productivity has rarely been studied in

many countries. In this sense, research work was carried out from an academic point of view,

trying to collect articles and topics related to technology tools, innovation, and productivity in

organizations such as SMEs. In a theoretical framework, each section contains content about the

factors of Technology, Technological Innovation, and productivity.

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ROLE OF TECHNOLOGY AND INNOVATION IN THE SUCCESS OF SME’s

The use of technology has acquired significant importance for the organizations that

make up the economy, and there is acceleration in the technological process. Therefore, we want

to find the relationship between the use of technology and innovation in SMEs' success. Taking

this environment into account, organizations must be aware of environmental circumstances and

develop technological capabilities that will allow them to be innovative. Thus, managers focus

on strategies that contemplate the use of technology tools and success factors such as innovation

now to make decisions when making policies and deploying strategies (Maldonado, Mojica &

Molina, 2013). The following issues are successively considered: Identification of the research

problem, briefly exposing its relevance and importance, describing the objectives developed

during the research work.

Problem Statement
The CCB (2012) indicates that 96% of organizations are small and medium

organizations. Therefore, the Government provides incentives for its role in job creation. In the

same report, NY is identified among the five most attractive cities in America to invest. Among

the activities identified with the potential to support are BPO and Offshore, software and

technology, research and development, business tourism and health, business infrastructure and

logistics, renewable energy, and clean technologies. Among these Government policies are the

Live Digital Plan, which aims to massively use the Internet, the Digital sector, to reach 50% of

the connected networks. By mid-2014, expectation shows that 15% of them are connected

(Association of Systems Engineers ASE, 2013).

However, there is still a digital gap in access to technology-related goods and services,

making it necessary to focus on policies that permeate these services (Montoya, Montoya, &

Castellanos, 2010). To close this gap, the technology Ministry allocated 28 billion$ to the

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deployment of applications so that the country's SMEs become engines of development due to

the Internet usage (Montoya, Montoya & Castellanos, 2010).

The strategies defined using technology will give employees a sense of belonging and

allow them to understand the organization to help build or add value to their services. In this

way, the use of technology in the organization transforms the employee's culture, who is part of

how these strategies are applied (Montoya, Montoya, & Castellanos, 2010). Among the variables

that facilitate the use of Technology is Technology and innovation. They are a direct function of

the variety and wealth of knowledge and the work done, primarily when innovation, without

distinction of positions, constitutes the significant variable. It involves the consideration of the

axis of productivity and fundamental support of competitiveness (Restrepo, 2004). The use of

technology can inhibit or potentiate the development and launch of services in organizations.

Multiple factors are part of the variables that facilitate the use of technology and innovative

activities (Jiménez, Martínez, & González, 2008).

Purpose of the Study

Even though researchers are working on other contexts concerning this topic, this

qualitative research approach allows familiarization with unknown situations, exploring.

Furthermore, describing success factors such as innovation and technology tools, obtaining

information, and allowing a complete investigation. However, efforts are required to determine

whether innovation and the use of technology are success factors for SMEs.

Scope of the Research

Thus, the scope of this research is exploratory. Qualitative research design is incorporated

to explain the problem selected for the study; conducting a review of documents that seeks to

rebuild SME's reality is an essential component of its productive fabric. Numerous analyzes of

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business reality have highlighted the involvement of these organizations. This research aims to

analyze the SMEs under the theoretical context of the factors related to the cause of change in

behavior. Interpretation of the aspects concerning essential elements, i.e., innovation and the use

of technology tools. However, multiple factors influence the research object but are not part of

this research.

The reason for selecting these two factors is because they have become a priority for

management. In addition to that, there are no studies that interpret these factors with the success

of SMEs. In the information consulted by the Chamber of Commerce, the highest percentage of

companies according to size is SMEs. Therefore, they were the investigation object. For

example, in 2011, 85% of the companies registered were micro-companies, 11% corresponded to

small companies, 3% to medium-sized companies, and 1% to large companies (Chamber of

Commerce, 2011-2010 - 2009). In March 2012, American SMEs were the most optimistic in the

region. 53% of small and medium-sized companies in America consider that their current

economic situation is better than a year ago, and 60% trust that their business will improve in the

coming months (Portafolio, 2012).

Theoretical or Conceptual Framework

Specify the success factor for the SMEs that will be part of this research are innovation

and technology. And the term development as the progressive evolution of an economy towards

better living standards. At the same time, focusing on these definitions, the definition of

organization is the axis of the country's economic development. So, they require special

industrial, social, and environmental conditions to develop their activity optimally. If the right

conditions do not exist, there is no sustained development. It is evident in emerging countries,

where the elements do not exist to appropriately take advantage of the innovation impact on

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economic growth (Scheel, 2012). Theoretical and empirical evidence is the basis of the

innovative approach. This approach supports the idea of individuals living and working in a

knowledge-based economy. The perception of technology and innovation is continuously

shaping the system's economic and regional development (Scheel, 2012). The new business

environment requires organizations to rethink their business strategies to adapt them to the new

business environment demanded by an increasingly globalized and competitive market. Thus,

incorporation of innovation and technology as two essential success factors is a must into the

design and implementation of business strategies that allow organizations to improve

(Maldonado, Mojica, & Molina, 2013).

Innovation means developing new products, new services, innovative technology, and

new business management systems, which can generate significant positive effects both in the

organization's performance and the improvement of the business environment. It allows the

productivity of organizations. On the other hand, the use of technology in organizations, in

SMEs, facilitates the development and implementation of quality activities both inside and

outside of companies (Maldonado, Mojica, & Molina, 2013). The internal development of

technology or its use highlights the organizations concerning the others, which is an essential

factor of stability and economic growth (Medina, Ballina, Barquero, Molina, & Guerrero, 2011).

Innovation is one factor that marks the most significant differences in performance between

organizations.

One factor that manages to increase effective and productive development in SMEs is an

investment in technology. Its use and application provide a series of potential advantages in all

functional areas of the organization. It allows greater agility in the generation, access,

distribution of information, greater coordination in decision-making, improved connection, and

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assistance to clients and suppliers. The correct use of technology in the organization of SMEs

can be an essential advantage. Informatics has come to play an active role in business

development, abandoning traditional passive participation (Medina, Ballina, Barquero, Molina,

& Guerrero, 2011).

Technology plays a decisive role in the selection process of SMEs that will remain in the

market, compared to those that will come out of economic reality because they cannot compete

and be productive under identical conditions (Medina, Ballina, Barquero, Molina, & Guerrero,

2011). A phenomenon leads to a more significant number of innovations in an increasingly

reduced period due to the acceleration of technological progress. Organizations must be aware of

the relationships between innovation and technology in their success. In response to this

phenomenon, it is vital to develop the technological capacity that will allow them to manufacture

innovative products with high added value or adopt new manufacturing processes (Molina &

Conca, 2000). Since the accentuation of the globalization process, American countries lagged in

innovation and consumption of new technologies. Whereas highly industrialized countries make

effective use of innovation and technology production (Bravo, 2012). The decision to focus on

innovation and technology due to its importance and its utilization in government policies.

Furthermore, the participation of these factors in organizations highlighting the use of

technology tools and innovation in organizations (Ministry of Technology, 2012).

Methodology

For the development of this study, we will consider the various theories and studies

carried out by researchers on companies that have made effective use of technology and

innovation. It will allow studying the contribution of these elements in production efficiency,

correction of errors, improvements in products, and communication tools that make

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administrative processes more effective. All of this improves decision-making, where

information and communication technologies occur, particularly on issues related to company

productivity and success. In this way, we will analyze the results of this research through

theoretical approaches. The approaches addressed in this document will provide information on

the general panorama of technology and innovation in small and medium enterprises. Therefore,

the collection of information focused on technology and innovation in SMEs is required,

considering the various aspects addressed and the benefits obtained in each of the company's

area.

It will allow identifying design, adaptation, and validation of specific knowledge

obtained from the data collection, to constitute a proper perspective to achieve the desired

results. The methodology used in this study will explain the role of every technology and

innovation in the success of companies. Therefore, the methodology will consist of qualitative

research that will consider the investigation of databases, which allows evidence of the evolution

in the theoretical and practical conceptions. This is noticeable in companies over time and since

the market changes using all technology and innovation.

Research Questions
1. Do technology and innovation manifest as a success factor of the SMEs?

2. Is the use of technology more important than innovation in SMEs under the theoretical

context?

3. What is the influence of innovation and technology on the productivity of SMEs?

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Significance
 To analyze the mentioned factors of the SMEs and under the theoretical context and

indicate if technology, innovation, and productivity have greater importance in the

development of the SMEs

 To carry out a literary review that allows evidence of the influence of the success factor

mentioned in the Productivity of the SMEs

 General State of the art of the relationship of the technology variables, innovation, and

productivity in the development of SMEs

Limitations
This research is an invitation to continue with deployment at a strategic level based on

support tools such as technology and innovation to increase SMEs' productivity. The current

research will not consider the strategies of an organization to improve the productivity of

organizations. The success factors, such as innovation and the use of technology tools, were

identified. However, neither is carrying out the identification of sources of innovation. Nor the

methods or patterns of innovation applicable to the organizational field. It is necessary to

incorporate into the topics of innovation and technology management the influence of the

globalization of markets and rapid technological changes as they affect the productivity of

organizations. Another restriction is the number of information sources that refer to SMEs with

success factors, productivity, innovation, and technology tools that hinder the research process.

Summary of Chapter 1/Preview of Chapter 2

The introduction provides a precise, brief, and sufficient description of the role of

technology and innovation in SME's success. Objectives constitute the "why" of the work and

refer to what we want to achieve with the experiment, determining specific goals, well written,

duly quantifiable, these must be the precise and transparent. Justification describes the reasons

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why we choose this topic by compilation of the interest of an investigation. It must also clarify

the scope, extension, and depth, considering the time we must develop the reception document.

The theoretical framework is the organized presentation of the general and particular theoretical

elements (methodologies and processes of other similar works proposed by recognized

researchers and students), and the explanation of the basic concepts on which the activity carried

out is based. The methodology presents the method of investigation of this work. A description

of the research gaps is specified at the end.

Organization of Remaining Chapters

The paper is structured as follows: in the second chapter contains the literature review;

the previous empirical studies are pointed out and analyzed. In the third chapter, the explanation

of the methodology used is present: how the data was gathered and collected and analyzed. In the

fourth chapter includes the presentation of results. The fifth chapter will be a discussion in

addition to that; it will consist of the conclusions, the limitations of the work, and potential future

research.

Gaps in the Research

Some gaps hinder the access and proper use of technology in SMEs, such as lack of

training, poor access to specific software. The guidelines of the managers have an unfavorable

attitude to the constant updating of technology in their organizations. Public policy must have an

objective, access to necessary and specific equipment, and professional training at the different

hierarchical levels of SMEs (Mora, and others, 2012). By incorporating technology in SMEs,

they can benefit productively, as shown by studies carried out in the eighties, which identifies the

positive influence of technology investments on the organization's productivity.

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References

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importance of training and a strategic attitude, 131 - 155.

Álvarez, R., & García, Á. (2010). Productivity, Innovation and Exports in the Chilean

Manufacturing Industry. El Trimestre Económico, 155 - 184.

Blenko, M. W., Mankins, M. C., & Rogers, P. (2010). The Decision - Driven Organization.

Harvard Business Review, 55-62.

Bond, I. E., & Houston, M. (2003). Barriers to Matching New Technologies and Market. Journal

of Product Innovation Management, 20-135.

Bortesi, L. (2009). Qualitative aspects of productivity. Financial Alternative, 7-15.

Bravo, E. (2012). Globalization, technological innovation, and poverty. Approach to the new

conceptualizations in Latin America. Open Space Venezuelan Notebook of Sociology,

546 - 556.

Cáceres Carrasco, R., & Aceytuno Pérez, M. T. (2008). Innovation as a source of business

opportunities., 135 - 156.

Cáceres, R., & Aceytuno, M. T. (2008). Innovation as a source of business opportunities., 135 -

156.

Druker, P. F. (2002). Management in the future society. New York: St Martin's Press.

Duarte, F. (2010). Digital economy, websites, and SMEs of the handicrafts sector in Peru.

Accounting and Business, 76-84.

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