Purpose This study was inspired by research of strategists on strategic innovation (SI), aiming to provide a unique model to enhance the digitization of small and medium-sized enterprises (SMEs) in Bangladesh to fill the gap toward a digital economy. Design/methodology/approach A survey was used to collect data from 180 SMEs in the manufacturing industry for this research. The results indicate that strategic innovativeness (SI), human capital (HC), infrastructure and technology and resistance to change significantly influence the digitalization in Bangladesh SMEs. Findings The link between SI and SMEs' digitalization in Bangladesh is mediated by HC. The results show that HC plays a big role in the connection between SI and the digitalization of SMEs. This study may be valuable for SMEs managers, researchers and policymakers in Bangladesh and other developing nations, who want to learn more about SI in adopting digitalization. Originality/value The specialized knowledge and abilities of strategists allow them to establish parallels between the past and present, enabling them to make a sustained forecast about the digital economy. This study encourages small and medium-sized businesses to develop their SI and advance their HC, which could further deject resistance to change toward enhancing and adopting digitalization in SMEs sectors.

The increasing pace of digitalization has made digital transformation a critical strategic priority for small and medium-sized enterprises (SMEs), particularly in developing economies. This study examines the effects of Digital Transformation Leadership (DTL) on Business Model Innovation (BMI) and Firm Performance (FP), while investigating the moderating role of Organizational Agility (OA). Data were collected from 500 employees working in Pakistani SMEs and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that Digital Transformation Leadership has significant positive effects on Organizational Agility, Business Model Innovation, and Firm Performance. However, Organizational Agility does not significantly moderate the relationships between Digital Transformation Leadership and either Business Model Innovation or Firm Performance. The structural model demonstrates satisfactory explanatory and predictive capability, confirming the strategic importance of Digital Transformation Leadership in enhancing organizational innovation and performance. This study contributes to the literature by providing empirical evidence from an emerging economy and by demonstrating that Organizational Agility functions as an important organizational capability but does not strengthen the effects of Digital Transformation Leadership on Business Model Innovation or Firm Performance. The findings suggest that managers should prioritize leadership capabilities and digital transformation initiatives while simultaneously developing complementary organizational capabilities beyond agility to maximize digital transformation outcomes. The study also provides practical implications for policymakers seeking to strengthen SMEs' digital competitiveness through investments in digital infrastructure, digital skills, and innovation support programs.