Abstract:
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ABSTRACT
This research study aimed to examine the influence of digital tools transformation on the growth
of small and medium-sized enterprises (SMEs) operating in the service industry. It sought to
investigate various aspects, including identifying digital tools currently adopted by SMEs in the
service industry, the advantages and challenges associated with implementing digital tools, the
potential impact of digital tools on SME growth, and the relationship between digital tools
adoption and SME growth. Data gathering employed a mixed-methods approach that combines
a survey and interviews with SME owners and managers. By using this approach, the research
gathered comprehensive insights into the current state of digital tools adoption among SMEs in
the service industry. Data were analysed both quantitatively and qualitatively to find out the
central tendencies of the data and the thematic output respectively. The findings show that the
entrepreneurs acknowledge that the digital tools adoption was high but there were rooms for
improvement. The analysis also indicates that there were some barriers that were prohibiting
adoption of digital tools in SMEs, and these were related to the cost of the internet, the
availability and quality of the internet, the availability of the needed software and the knowledge
in using the software. The study showed that digital tools adoption had impact especially in
marketing, customer service and satisfaction, cost reduction in operation costs, and
product/service improvement due to feedbacks received from customers after service. Since
the findings of this research are valuable to policymakers, SME support organizations, as well
as SME owners and managers, there must be government initiatives to strengthen internet
infrastructure access, improve digital tool literacy among SMEs, and ensure affordable internet
user fees. Policies should be established to protect users of digital tools, preventing theft and
preserving SMEs' reputation, and discourage negative content and posting of harmful content
