Abstract
This study investigates absorptive capacity's role in small- and medium-sized enterprises (SMEs) adopting digital innovations across six North Sea Basin regions. It addresses the scarcity of empirical evidence regarding Potential absorptive capacity (PAC) and Realized absorptive capacity (RAC) differences in impacting digital innovation adoption. In this study, digital innovations are the results of tailored projects whereby individual SMEs were assisted in the adoption of a digital solution relevant to their business objectives. Only 36 percent of these projects were successfully completed. Investigating data from 252 SMEs, our novel findings reveal conflicting impacts of PAC and RAC on digital innovation adoption. While RAC reduces the likelihood of a successful project completion, PAC significantly increases it. This highlights a trade-off in SMEs between resources, skills, and attitudes necessary for exploiting existing knowledge (RAC) versus exploring new knowledge (PAC)This study investigates absorptive capacity's role in small- and medium-sized enterprises (SMEs) adopting digital innovations across six North Sea Basin regions. It addresses the scarcity of empirical evidence regarding Potential absorptive capacity (PAC) and Realized absorptive capacity (RAC) differences in impacting digital innovation adoption. In this study, digital innovations are the results of tailored projects whereby individual SMEs were assisted in the adoption of a digital solution relevant to their business objectives. Only 36 percent of these projects were successfully completed. Investigating data from 252 SMEs, our novel findings reveal conflicting impacts of PAC and RAC on digital innovation adoption. While RAC reduces the likelihood of a successful project completion, PAC significantly increases it. This highlights a trade-off in SMEs between resources, skills, and attitudes necessary for exploiting existing knowledge (RAC) versus exploring new knowledge (PAC)