A strategic innovation perspective on digital transformation: the example of small and medium enterprises

This chapter delves into the temporal aspects distinguishing digital transformation from radical innovation in the context of SMEs. It explores how future orientation (strategic focus on future perceptions) and future horizon (temporal distance for envisioning future events) influence both digital transformation and radical innovation. These temporal dimensions play a pivotal role in shaping innovation outcomes for SMEs. Digital transformation, being more complex and requiring continuous market adaptation, benefits from a shorter time horizon, contrasting with the predictable path of radical innovation. Our analysis of 268 SMEs shows that heightened future orientation enhances both innovation types similarly. Additionally, it confirms that digital transformation thrives with a reduced time horizon, while radical innovation benefits from an extended one. This study highlights the importance of considering these temporal dimensions for a comprehensive understanding of digital transformation and radical innovation outcomes, with implications for theories on digital transformation, innovation, and organizational learning.