Digital Transformation for Entrepreneurship

The following sections are included:

• Dedication
• About the Editors
• About the Contributors
• Contents

This book is primarily composed of contributions from PhD students in the Entrepreneurship and International Business group at the Faculty of Business Administration, Tallinn University of Technology, Estonia. The PhD students — who form a talented group of individuals from different countries, such as Egypt, Estonia, Germany, Ghana, Italy, Kazakhstan, and Russia — explore various topics related to digital transformation for entrepreneurship. In this way, the topic of entrepreneurship is addressed by a new generation of researchers working in the field of entrepreneurship and related areas. The topic is discussed not only from different angles and perspectives but also from those that reflect this generation’s thinking on the subject.

The aim of this chapter is to set the frame for the book’s topic, namely digital transformation for entrepreneurship. In order to do so, the chapter starts broadly and introduces the topics of entrepreneurship and digital transformation, first individually and then combined. The outcome shows that there is a clear need for more systematic research, so this chapter opens the door for the subsequent chapters presented in this book and is intended to further our understanding of the need for digital transformation for entrepreneurship.

Digital transformation (DT), as a phenomenon, has been studied for around a decade. Its impact on the values, principles, and ethics of organizations has been studied even less. The ethics of entrepreneurial activity in the context of DT has been examined in academic literature with little attention. At the same time, societal awareness of risks and new challenges due to the digitalization of our everyday lives and business activities is rising. Entrepreneurs developing new technologies are at the forefront of DT. This chapter provides an overview of the issues of entrepreneurship and ethics, DT and ethics, and the challenges and outcomes when entrepreneurship meets the challenges of DT and faces ethical questions that impact not only the entrepreneurial activity but the society at large. Considering the basic ethical principles seems to be the next challenge in the DT ethics debates.

The recent global pandemic has forced companies to move operations online, and rapidly changing market conditions have increased the business need for digital transformation. This chapter evaluates the general characteristics of small- and medium-sized enterprises and considers the common barriers and supporting factors these organizations face during a digital transformation. To address those challenges, knowledge management is proposed as a useful framework. A set of practical recommendations follows that SMEs might employ as they plan digital transformation.

With the advent of digital transformation, a growing number of firms have become digital businesses, increasing the risk of cybercrime and other risks associated with their competitive knowledge, thus making the ecosystem in which they function more vulnerable. However, how these knowledge risks relate to the digital entrepreneurial ecosystems (DEEs) is not well understood. This chapter, therefore, situates the discussion of knowledge risks within the DEE and argues that such risks may have possible consequences for the ecosystem. These potential risks are identified through a critical analysis of existing knowledge on knowledge risks and the DEE. It has been determined that unlearning, cyberattacks, digitalization risks, knowledge leakage, and knowledge censoring are possible risks in the ecosystem. As a consequence of the unique effects of these risks, a conceptual model has been developed to better understand their nature. In addition, several recommendations were offered on how stakeholders, including government institutions, policymakers, and entrepreneurs, can contribute to the creation of an ecosystem that is digital, vibrant, and sustainable.

Entrepreneurship is important for the socioeconomic development of our communities. The long-standing debate on whether entrepreneurial skills are acquired or inherited was settled with the growing literature showing the direct benefits entrepreneurship education has on developing entrepreneurial intentions, mindsets, and setting up businesses. However, there has been recent calls for renovating entrepreneurship education to make it more active, engaging, and suitable to the digitally savvy new generations. Technology has, for a long time, played an important role in developing and improving the learning process, and most recently, its application has expanded to entrepreneurship education. This chapter provides a review of the transformative changes in entrepreneurship education and the role digital technology plays in them, expounding on the goals, benefits, and challenges of applying them.

Technology can be a source of stress at work, contributing to a variety of mental health problems. Therefore, it is important to understand how to mitigate the effects of technology-related stress and promote digital well-being at work in the context of increasingly virtual workplaces. This chapter overviews the factors causing technostress in contemporary organizations and delineates ways of enhancing digital well-being. Virtual workplaces can inflict stress by increasing work-related stressors (overload, time pressure, poor communication) and intensifying technostress-creating conditions. Also, technostress can result from how people feel obligated to relate to their work in the digitalized workplace and to a digitalized society at work, as well as from internalizing the “ideal worker” image. Digital well-being is achieved through the more mindful use of technology, the development of digital and remote work skills, and the design of organizational practices aimed at solving paradoxical situations where information and communication technologies can simultaneously promote and hinder employee well-being and productivity. Most importantly, technostress can be lessened by establishing norms governing technology in work and home contexts.

Digital platforms and the increasing pursuit of becoming more effective and flexible have affected many traditional work structures within and across organizations. This chapter introduces the concepts of smart working and smart leadership and delineates the challenges digital transformation poses for entrepreneurial leaders. It is argued that digital workplaces do not only mean the extensive use of digital technologies at work but new and complex configurations of human and technology relationships that reshape the very nature of work. Effective leadership requires a broad behavioral repertoire, mastering new roles and mindsets. Smart leadership, as a facilitative behavior that inspires change and produces innovation in the ways of thinking about work, emerges as a response to smart working practices. Entrepreneurial leaders fostering collaborative and open relationships, empowering employees, and facilitating knowledge sharing and trust help employees to perceive their work as significant and boost employee work engagement. To be an effective leader in a virtual environment, one needs to be skillful in using information and communication technologies for communication, creating and maintaining relationships and a sense of trust. The leaders of the digitalizing companies must be able to challenge how their organizations operate, engage their personnel in the process of redefining their work roles, and keep their minds open to the possibility that their own roles will change as well.

Today’s society is faced with rapid economic change. This change is so significant that new companies are quickly becoming the driving force of economic development around the world. It is primarily entrepreneurial companies that are shaping the global economy by challenging established standards and introducing a host of new, disruptive technologies and innovations. In the area of digital disruption, technological breakthroughs are taking entire industries and markets around the world out of their comfort zones. Against the backdrop of this change, it is no longer enough for leaders to ignore the transformative power of digitalization on business models or strategies. However, successful integration and use of new digital technologies and processes will only succeed if entrepreneurs are willing to question and, if necessary, adapt their previous strategic orientation and associated business models. The primary goal of this chapter is to demonstrate the opportunities that emerge for entrepreneurial players as a result of a shift away from innovative service or service-oriented business models. In doing so, the “Everything as a Service” approach will be examined in more detail to help entrepreneurs make the change to a service-oriented business model in a more structured way.

The future of entrepreneurial business finance is strongly connected with technological developments and the manufacturing of new investment products. New technologies make it easier to collect investor money and invest it in profitable business ideas. The technological transformation makes the pooling of funds easier and reduces processing and transaction costs. For business finance, this trend means that by allowing a larger group of retail investors to invest in collective funds, more liquidity will be provided to businesses. This chapter aims to provide a condensed overview of the most common funding methods and the changes they undergo. Furthermore, this chapter seeks to shed light on new forms of funding. Entrepreneurs will get familiar with recent emerging trends in business finance and learn about the latest terminology. Each of the funding methods is described in detail, and their advantages and potential shortcomings are summarized.

This chapter explores the motivations of small- and medium-sized enterprises (SMEs) to move to third-party digital platforms and the early-stage challenges in transforming their offline businesses into these online marketplaces. According to the findings of in-depth interviews with seven SMEs in Kazakhstan, online marketplaces enabled SMEs to scale their businesses by helping them overcome resource limitations and facilitating access to networks. Businesses are developing platform utilization capabilities by working with online reviews, digital representations of their products, and basic data science skills.

The aim of this chapter is to provide an account of the innovative strategies devised by microentrepreneurs as a consequence of the COVID-19 crisis in Kazakhstan. To do so, the chapter initially introduces the most recent developments of digital transformation and micro-entrepreneurship in the Kazakh context, and building on this overview, it closely examines the innovative practices implemented by a number of micro-entrepreneurs over the past two years. The outcome is a timely analysis of the country’s digitalization process, the recent approaches to dealing with the disruptive consequences of the global pandemic, and an insight into the present and future ways of doing business by micro-entrepreneurs in Kazakhstan.

Organizations globally are faced with numerous new challenges in their quest to become more sustainable and environmentally responsible. Challenges arise through institutionalized regulatory measures, environmentally conscious consumers, and sustainability-driven employees pushing corporations to increase their efforts in realizing the transformational change needed in order to preserve the planet. Small- and medium-sized enterprises (SMEs) are indirectly affected by these situational developments throughout the value chain, pressuring them into adherence to the same regulatory measures and ethos of employees and customers. Although SMEs have limited resources available to achieve similar commitments as global corporations, implementing sustainability management is still achievable. SMEs are agile and have the ability to support corporations in improving their own sustainability performance. This chapter proposes a generic framework to SMEs that can aid in their sustainability transformation journey. The study explores the example of one SME, “SCHUMACHER Brand + Interaction Design GmbH” (SCHUMACHER), and what steps it undertook in paving the road toward a sustainability transformation.

Throughout this book, the interested reader would have gained insights into different perspectives on the topic of digital transformation for entrepreneurship. The aim of the concluding chapter is to highlight some main takeaways that may initiate the next concrete steps.

The following section is included:

• Index