Entrepreneurial Performance of Small and Medium Enterprises and Digital Transformation in Busia County, Kenya

Abstract

The impact of digital transformation on the operations of small and medium sized businesses (SMEs) in Kenya's Busia County was examined in this study. The study investigated the relationship between SME performance as the dependent variable and organizational culture, leadership commitment, digital literacy, and technology infrastructure as independent variables using a quantitative, correlational survey design with 317 SMEs as the sample size from Busia County, Kenya. The results indicate a positive correlation between SME performance and all independent variables. Higher revenue growth was driven by employee digital literacy (r=0.68) and leadership commitment (r=0.72). Data analytics was only 15% adopted, compared to 85% for digital tools like mobile money. The study concludes that the best way for Busia County SMEs to take advantage of digital transformation is to foster an innovative culture within the company, develop digital skills, and exercise leadership. This study recommends that significant investment should be directed toward comprehensive digital literacy and skills training for SME owners and employees while at the same time, improvements in reliable, affordable, and high-speed internet connectivity, particularly in rural and peri urban areas should be made a priority.