Enhancing Sustainable Business by SMEs’ Digitalization

Abstract

In the digital and knowledge society, where SMEs are predominant contributors to economic and social development, SMEs’ digitalization is a lever for sustainable business. The purpose of this paper is to argue the importance of SMEs’ digitalization for their sustainable business operation and for strengthening their innovation and development potentials. The theoretical part of the paper gives an overview of the topic’ s backgrounds: sustainable business, the new digital business reality, digital technologies and their functionalities, the state of digital technologies adoption among European micro, small and medium-sized enterprises (SMEs), and the existent governmental and European Union’s (EU) support to SMEs’ digitalization. In the empirical analysis, we explore business digitalization in the European Union, focusing on Slovenia and Croatia. We found that both Slovenia and Croatia are on a promising path towards SMEs’ digitalization; however, they still need to diminish some gaps. We propose some requisite policy responses.