The Imperative of Digital Transformation and SMEs’ Inbound Open Innovation Strategies: The Moderating Role of Partner Diversity and Technological Uncertainty

Abstract

Digital transformation (DT) has become an unavoidable imperative for small- and medium-sized enterprises (SMEs), not only as a technological adoption but also as a strategic motivation that guides their innovation choices. This study aims to investigate how the strategic motivation for digital transformation (DT) drives the firms’ choice of inbound open innovation (IOI) strategies, focusing on the breadth and depth of external search. Drawing on firm-level data from the 2022 Korea Innovation Survey (KIS), we find that DT decreases search breadth while increasing search depth. Moreover, partner diversity intensifies the negative effect of DT on search breadth, whereas technological uncertainty amplifies the positive effect of DT on search depth. From these findings, we show that SMEs with stronger strategic motivation for digital transformation tend to deepen their inbound OI search rather than broaden it, and in the Discussion Section, we highlight the potential risk of overemphasizing depth at the expense of breadth, which may constrain their long-term innovation potential.