Digital Transformation and Resilience in MSMEs: A Systematic Literature Review of Barriers, Capabilities, and Policy Supports (2015–2025)

Abstract

Digital transformation has become a critical pathway for enhancing the resilience of micro, small, and medium enterprises (MSMEs), particularly in contexts marked by technological disruption and systemic shocks. This systematic literature review examines how digital transformation has shaped MSME resilience between 2015 and 2025, with specific attention to the roles of barriers, organisational capabilities, and policy supports. Guided by the PRISMA 2020 framework, the study synthesises evidence from 58 peer-reviewed journal articles and authoritative policy reports drawn from India and comparable emerging and advanced economies. The review traces a clear evolution in the literature from early emphasis on structural constraints such as finance, infrastructure, and digital skills, to subsequent focus on Industry 4.0 readiness, fintech adoption, and organisational capability development, and more recently to resilience-oriented perspectives encompassing artificial intelligence, digital platforms, and sustainability. To integrate these shifts, the study introduces a Thematic–Chronological Fusion Matrix, which maps changing research priorities across three distinct phases (2015–2018, 2019–2021, and 2022–2025), and proposes the MSME Resilience Cube, a conceptual framework positioning resilience as an outcome of the interaction between barriers, capabilities, and policy supports. The findings highlight that digital technologies alone are insufficient to strengthen MSME resilience; rather, resilience emerges through the alignment of internal capabilities with enabling institutional and policy environments. At the same time, the review identifies persistent gaps in measurement, causal identification, and policy implementation, particularly in relation to smaller firms and resource-constrained contexts. By reframing MSME digital transformation as a cumulative, capability-driven process rather than a crisis-induced response, this study offers a structured synthesis and sets out a focused agenda for future research and policy design.