Meaning ● Absorptive Capacity in Small and Medium-sized Enterprises (SMEs) represents an organization’s ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends, directly impacting SMB growth. In the context of automation and implementation, it signifies the capacity to effectively learn about, adopt, and integrate new technologies or processes into existing business operations. The degree to which an SME can utilize external technological advancements dictates its innovative potential and overall competitive advantage. ● Effectively leveraging external opportunities enhances operational efficiencies and the ability to rapidly adapt to evolving market demands. The implementation of automation strategies is heavily reliant on an SME’s proficiency in understanding the technology’s capabilities and aligning them with the business model. This capacity helps businesses innovate quickly and reduces the time required to get products to market, ultimately accelerating growth. A robust absorptive capacity also allows SMEs to proactively identify and address potential challenges associated with technological changes, minimizing disruption and maximizing the return on investment. Without this, attempts at implementing and automating are likely to lead to decreased productivity.
