Technological, Organizational, and Environmental Drivers of Digital Technology and Innovation Adoption among SMEs in Upper Northern Thailand

Abstract

This study investigated the technological, organizational, and environmental drivers of digital technology and innovation adoption among small and medium-sized enterprises (SMEs) in Upper Northern Thailand. Grounded in the Technology Organization Environment (TOE) framework, the study employed a quantitative, cross-sectional research design. Data were collected through a structured questionnaire from 400 SME owners, entrepreneurs, and executives across eight provinces in Upper Northern Thailand using a multistage sampling approach. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed to assess the measurement and structural models and test the proposed hypotheses. The results demonstrated that technological, organizational, and environmental contexts all had positive and statistically significant effects on digital technology and innovation adoption. Organizational context emerged as the strongest predictor (β = .426, t = 7.912, p < .001), followed by technology context (β = .318, t = 5.847, p < .001) and environment context (β = .271, t = 4.966, p < .001). Collectively, the three TOE dimensions explained 68.40% of the variance in digital technology and innovation adoption (R² = .684). The findings highlight that successful SME digital transformation depends not only on technological readiness but also, and more importantly, on internal organizational capabilities and supportive external conditions. The study provides empirical support for the TOE framework and offers practical insights for SME managers and policymakers seeking to strengthen digital transformation, innovation capability, and sustainable competitiveness.