Meaning ● Absorptive Capacity, in the context of Small and Medium-sized Businesses (SMBs), reflects the organization’s capability to identify, assimilate, transform, and apply external knowledge for innovation and competitive advantage. It is crucial for SMBs seeking growth through automation and the implementation of new technologies.
Scope ● For SMBs, enhancing absorptive capacity involves cultivating an environment that values continuous learning, investing in employee training, and actively seeking external partnerships with technology vendors and industry experts. A strong absorptive capacity enables SMBs to effectively evaluate and integrate new automation tools, thereby improving operational efficiency, customer experience and overall business performance in a scalable manner. Building this capacity prepares an SMB to adapt quickly to market changes, innovate effectively, and secure a sustainable position within its competitive landscape by strategically leveraging new information and technologies. Furthermore, leadership commitment and the establishment of clear knowledge-sharing processes are vital components in maximizing the impact of absorptive capacity within the SMB framework, creating a competitive edge.
