The mechanism of digital transformation impact on innovation performance
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Introduction
Digital transformation refers to the integration of digital technology into all areas of a business, fundamentally changing how companies operate and deliver value to customers. This transformation has significant implications for innovation performance, which is crucial for the long-term success and competitiveness of enterprises. This synthesis explores the mechanisms through which digital transformation impacts innovation performance, drawing on insights from multiple research studies.
Key Insights
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Enhancement of Innovation Performance through Digital Transformation:
- Digital transformation significantly enhances both process and product innovation performance in manufacturing enterprises .
- The integration of digital technologies such as big data, AI, and cloud computing promotes green innovation and sustainable development .
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Role of R&D and Dynamic Capabilities:
- R&D capabilities, both exploratory and exploitative, mediate the relationship between digital transformation and innovation performance, with different mechanisms for each type.
- Dynamic capabilities, which include the ability to integrate, build, and reconfigure internal and external competencies, are crucial for leveraging digital transformation to improve innovation performance.
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Sectoral and Technological Content Differences:
- The impact of digital transformation on innovation performance varies by sector, with more pronounced effects in high-tech and state-owned enterprises .
- Enterprises with higher technological content experience more significant benefits from digital transformation in terms of innovation performance.
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Operational and Financial Performance:
- Digital transformation positively correlates with process-based operational performance and has a U-shaped relationship with profit-oriented financial performance, indicating initial costs but long-term benefits.
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Green Innovation and ESG Performance:
- Digital transformation promotes green technology innovation by alleviating financing constraints and attracting government subsidies .
- It also improves environmental, social, and governance (ESG) performance by enhancing transparency, reducing managerial short-sightedness, and fostering technological innovation.
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Moderating Factors:
- Environmental uncertainty moderates the relationship between digital transformation and sustainable innovation performance, with lower uncertainty strengthening the positive effects.
Conclusion
Digital transformation significantly enhances innovation performance across various dimensions, including process, product, and green innovation. This enhancement is mediated by R&D capabilities and dynamic capabilities, with sectoral and technological content differences influencing the extent of the impact. While digital transformation incurs initial costs, it offers long-term operational and financial benefits. Additionally, it promotes green innovation and improves ESG performance, particularly in high-tech and state-owned enterprises. Environmental factors also play a role in moderating these effects, highlighting the importance of a supportive external environment for maximizing the benefits of digital transformation.
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