Although digital entrepreneurship (DE) emerged in the early 1990s because of digital technologies and entrepreneurship, current researchers consider it a recent phenomenon. This chapter proposes to extend the concept of DE to include the concept of dimensions of DE. Using literature in the areas of digital knowledge base and ICT market, digital business environment, digital skills and e-leadership, corporate culture, and access to finance, the chapter proposes a conceptual model for digital entrepreneurship, identifying the components of such a model as well as specific indications of size overlaps in different domains. This model implies that digital transformation in SMEs is intertwined with other activities and entrepreneurial behaviours in small firms, and it argues that understanding digital transformation or the adoption of digital technologies in SMEs requires an understanding of its context, particularly in relation to diffusion innovation theory, innovation system theory, and entrepreneurial approaches to the digital transformation towards digital corporate success.
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A subset of entrepreneurship known as “digital entrepreneurship” involves the digitization of any or all components of a traditional firm. It appears likely that digital entrepreneurship will become more prevalent given the rapid development of digital activities across all countries, societies, industries, and organizations, suggesting a need for a greater knowledge of this phenomenon (Nambisan, 2017; Hannibal & Rasmussen, 2014; Matlay & Westhead, 2007). DE is supposed to result from the fusion of the entrepreneurial and digital technology industries. Figures 1 and 2 illustrate it more graphically by emphasizing the digital technology adoption procedures that lead to digital entrepreneurship success in small and medium firms, respectively. In general, research on digital entrepreneurship has involved both the domains of digital technology and entrepreneurship.
The use of digital technologies to increase organizational performance in terms of organization and management, marketing and sales and production, and the same kind of mediating role that entrepreneurial orientation plays in this context. The adoption of digital technologies to build new ventures that are digitized or to transform existing businesses from traditional organizations to improve their organizational performance and create economic and/or social value has attracted some study attention in general. Although both are present in the literature, little is known about the synergetic effects of both strategies and the impact of digital transformation on them, given that SMEs are entrepreneurial by nature.
Given that digital technology (DT) plays a critical role in the design and success of organizational business models, it also allows for the establishment of new ventures and the survival of the entrepreneurial ecosystem. As a result, DT encourages entrepreneurship (Zahra et al., 2023). Business owners and executives have shown a strong interest in managing the innovation of digital goods and services. This is unsurprising given how digital technologies are changing the way businesses produce, market, and distribute goods and services while also boosting the economy and raising people's living standards. As a result, more opportunities for business owners to benefit from digital transformation are becoming available (Scuotto et al., 2021; Loonam et al., 2018). SMEs must not be left behind as digital technology has transformed society and business activities, as this results in changes in entrepreneurship theory, practice, and education. In response to this interest, the authors present a framework for promoting and tracking digital entrepreneurship among SMEs through digital innovation strategy initiatives.
The significance of focusing on SMEs cannot be overstated. Numerous academics and researchers have demonstrated the importance of SMEs in achieving the 2030 Agenda's Sustainable Development Goals. According to the World Bank, small and medium businesses have between 10 and 49 employees and 50 to 249 employees, respectively (Kushnir et al., 2010). However, because they are also classified based on specific revenue and asset turnover thresholds, the local definition of SMEs varies by country. SMEs are critical components of the larger industrial ecosystem. Start-ups and young businesses, typically small or medium-sized businesses, are the primary drivers of net job creation in many countries. They also serve as the foundation for the private sector's innovation and sustainability. In emerging markets, there are approximately 25-30 million formal SMEs, 55-70 million micro-businesses and 285-345 million informal businesses. SMEs account for approximately 90% of all businesses and more than 50% of all jobs worldwide. In emerging economies, formal SMEs can account for up to 40% of GDP. These numbers are significantly higher when informal SMEs are included. According to projections, 600 million new jobs will be needed by 2030 to accommodate the world's expanding workforce, making SME development a top priority for many governments around the world. The majority of formal jobs are created by small and medium-sized businesses (SMEs), which account for seven out of ten jobs in emerging markets (Raniya, 2019).