Journal: Journal of Innovation & Knowledge
Year: 2023
Citations: 232
DOI: 10.1016/j.jik.2023.100317

Abstract

Digital transformation has become a critical strategic priority for organizations seeking to maintain competitive advantage in the modern economy. This study explores the relationship between digital transformation initiatives and firms’ innovation performance, examining how digital technologies and processes influence organizational innovation capabilities. Using a comprehensive dataset of firms across multiple industries, we analyze the mechanisms through which digital transformation affects innovation outcomes. The research examines various dimensions of digital transformation including digital infrastructure adoption, data analytics capabilities, process digitization, and digital culture development. We investigate both direct effects and mediating factors that influence the relationship between digital transformation and innovation performance. The findings provide insights for managers and policymakers on how to effectively leverage digital transformation to enhance organizational innovation capabilities.

Summary

This comprehensive research examines the critical relationship between digital transformation initiatives and organizational innovation performance, addressing a fundamental question for businesses navigating the modern digital economy. The study investigates how digital technologies and processes influence firms’ innovation capabilities, using extensive empirical data from organizations across multiple industries to understand the mechanisms through which digital transformation drives innovation outcomes. The research provides valuable insights into how companies can strategically leverage digital transformation to enhance their competitive advantage and innovation potential.

The paper analyzes various dimensions of digital transformation including digital infrastructure adoption such as cloud computing and IoT systems, development of advanced data analytics capabilities for decision-making, comprehensive process digitization across organizational functions, and cultivation of digital culture that supports innovation and technological adoption. The research examines both direct effects where digital transformation immediately impacts innovation performance, and indirect effects mediated by factors such as organizational learning, knowledge management capabilities, and collaborative processes that digital transformation enables.

The study’s findings provide practical guidance for managers and policymakers on how to effectively design and implement digital transformation strategies that maximize innovation benefits. The research identifies key success factors for digital transformation initiatives, examines potential barriers and challenges that organizations face during digital transformation, and provides recommendations for overcoming these obstacles. The comprehensive analysis offers evidence-based insights for organizations seeking to understand how digital transformation investments can be optimized to drive innovation performance and sustainable competitive advantage.

Main Takeaways

• Multidimensional Digital Transformation: Effective digital transformation for innovation requires comprehensive approaches encompassing digital infrastructure, data analytics capabilities, process digitization, and digital culture development rather than isolated technology adoptions.

• Direct and Indirect Innovation Effects: Digital transformation influences innovation performance through both direct technological enablement and indirect effects mediated by improved organizational learning, knowledge management, and collaborative processes.

• Cultural Change Importance: Developing a digital culture that embraces technological tools and innovation processes is as critical as implementing new technologies for achieving innovation performance improvements.

• Strategic Implementation Requirements: Successful digital transformation for innovation requires strategic planning, comprehensive process redesign, and coordinated development of technological and organizational capabilities.

• Evidence-Based Management Guidance: The research provides practical, data-driven insights for managers and policymakers on how to effectively design and implement digital transformation strategies that maximize innovation benefits.

• Competitive Advantage Framework: Digital transformation serves as a mechanism for sustainable competitive advantage when properly integrated with innovation strategies and organizational change management.