Mind the gap: Investigating the transfer of digital capabilities from the classroom to the business in SMEs

Kars-Unluoglu, Selen; Kevill, Alex; Estrada-Robles, Mariana; Harrington, Shelley

Abstract

Objectives: Digital transformation is critical for business productivity, innovation, and growth (BEIS, 2019; OECD, 2021). However, SMEs often lag behind larger firms in digital adoption (OECD, 2021). Learning factories, designed to improve digital capabilities, are one approach to addressing this gap. These spaces focus on teaching specific technologies and the strategic aspects of digitalization. Despite their popularity, there is limited research on their practical impact, particularly in SMEs. Our study explores how participants in learning factories embed their digital learning within their organizations, examining both the barriers and enablers to this process. While much scholarship focuses on individual learning, we investigate the relational dynamics that support digital transformation in SMEs.

Prior Work: Learning factories are often grounded in an acquisitionist view of learning (Elkjaer, 2004), assuming that individuals can transfer their newly acquired skills throughout the organization, thereby fostering digital transformation. However, this view overlooks the relational nature of organizational learning. There is evidence in the organizational learning literature to suggest that digital transformation cannot be achieved solely through individual capability development, as organizational learning is more than the sum of individual knowledge (Argote and Miron-Spektor, 2011). Recent research highlights the importance of relational factors, such as a digital mindset and leadership skills, in enabling digital transformation (Nadkarni and Prugl, 2021; Hanelt et al., 2021). Our study argues that focusing on these relational dynamics provides valuable insights for digital transformation in SMEs.

Approach: We conducted qualitative research with 77 SME practitioners who attended learning factory programs. Participants engaged in group reflection sessions using LEGO Serious Play®, reflecting on their organization’s digital transformation and identifying barriers and enablers. Three months after the program, semi-structured interviews were conducted to assess whether and how participants applied their learning within their organizations.

Results: Our findings reveal that digital transformation in SMEs is not just a technical challenge but a relational one. Practitioners who engaged others in their organization and built support for digitalization were more successful in applying their learning. Those who created opportunities to showcase their digital skills in ways that resonated with different audiences facilitated the integration of new capabilities. Relational embeddedness, trust, and collaboration enabled these practitioners to access resources and feedback necessary for successful digital transformation. Confidence and self-efficacy also played a key role in scaling digital capabilities from the individual to the organizational level.

Implications and Value: Our research highlights the importance of relational dynamics in digital transformation, contributing to the literature by linking individual digital learning to organizational-level transformation. The study provides insights for designing learning factory programs and has practical and policy implications for supporting SMEs in their digital journeys.

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: 38th RENT Conference
• Start Date: Nov 14, 2024
• End Date: Nov 15, 2024
• Deposit Date: Dec 27, 2024
• Publicly Available Date: Jan 2, 2025
• Peer Reviewed: Peer Reviewed
• Public URL: https://uwe-repository.worktribe.com/output/13549648