ISSN: 2226-3624
Open access
Purpose: This study examines the role of digital transformation in enhancing the resilience and financial sustainability of small and medium enterprises (SMEs) in Libya. Given the persistent economic instability and policy constraints in the Libyan context, the research aims to identify how digital adoption supports operational continuity, adaptability, and long-term performance. Design/methodology/approach: A descriptive–analytical methodology was employed, combining quantitative surveys with qualitative interviews conducted across several Libyan cities. The analysis explores the relationships between digital transformation, organizational resilience, institutional support, and SME performance. Findings: Results indicate that SMEs with higher levels of digital adoption demonstrate greater operational efficiency, improved service quality, and stronger adaptive capacity. Digital transformation positively influences financial and economic sustainability, while organizational resilience partially mediates the relationship between institutional support and overall performance. Technical, infrastructural, and human-skill barriers were found to moderate the effectiveness of digital initiatives. Research limitations/implications: The study is constrained by limited data accessibility and a cross-sectional design, which preclude long-term causal analysis. Future research should incorporate longitudinal datasets and comparative sectoral studies to enhance generalizability. Practical implications: The findings highlight the importance of investing in digital infrastructure, continuous employee training, and institutional and governmental support, as well as proactive management of digital challenges. Integrating digital tools across business functions and regularly monitoring digital initiatives contribute to building long-term SME resilience and sustainable performance. Originality/value: This study provides one of the few empirical analyses on digital transformation and SME resilience in Libya, offering novel insights into how digital strategies can drive adaptability, operational efficiency, and sustainable economic growth in fragile and transitional environments.
Abdul-Latif, R. (2013). Libya status of women survey 2013. International Foundation for Electoral Systems.
AfDB. (2010). Technical assistance for small and medium enterprise development: The Socialist People’s Libyan Arab Jamahiriya. African Development Bank.
Al-Aradi, M. (2021). Challenges facing digital transformation in small and medium enterprises in Libya. Journal of Economic Development Studies, 8(2), 123–145.
Al-Buwaishi, H. (2019). The impact of digital transformation on the quality of banking services: An applied study on Libyan banks. Journal of Economic Research, 12(1), 45–67.
Al-Jubouri, A. (2020a). Digital transformation and innovation performance in Iraqi SMEs: An empirical analysis. Iraqi Journal of Administrative Sciences, 16(1), 45–60.
Al-Jubouri, A. (2020b). Keys to transitioning to the digital labor market in Iraq. Arab Center for Economic Studies, 7(1), 34–56.
Al-Masri, M. (2021). Digital transformation and organizational resilience among Jordanian SMEs. Jordan Journal of Business Administration, 17(3), 289–310.
Al-Masri, S. (2021). The role of digital transformation in enhancing the resilience of small and medium enterprises in Jordan. Journal of Digital Economy, 10(2), 78–101.
Al-Qahtani, F. (2022). The role of digital transformation in enhancing SMEs’ sustainability in Saudi Arabia. Arab Journal of Administrative Sciences, 29(4), 511–532.
Al-Trabulsi, F. (2022). The role of digital technologies in enhancing organizational resilience in Libyan institutions during crises: A case study of the COVID-19 pandemic. Journal of Management and Technology, 15(3), 89–112.
Amin, M., Khan, R., & Ahmed, S. (2025). Impact of digital transformation on SMEs’ marketing resilience. Journal of Global Entrepreneurship Research. https://doi.org/10.1007/s43621-025-01228-3
Asmiou, E. M., Al-Badri, H. M., & Ben Ismail, N. H. (2023). Enhancing the competitiveness of small and medium enterprises in Benghazi as a mechanism to activate their developmental role. In The 2nd Scientific Conference on Small and Medium Enterprises as a Tool for Economic Diversification (p. 428). Misrata, October 25–26, 2023.
Awad, J. A. R., & Martín-Rojas, R. (2024). Digital transformation influence on organisational resilience through organisational learning and innovation. Journal of Innovation and Entrepreneurship, 13, Article 69. https://doi.org/10.1186/s13731-024-00405-4
Bathina, J. M. J., Asmiou, E. M. M., & Al-Tarhuni, A. M. M. (2024, December). Activating the COPIT framework to enhance SME entrepreneurship and ensure sustainable development in Libya. Journal of Sustainable Research in Humanities.
Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N. (2020). Digital business strategy and value creation: Framing the dynamic cycle of control points. MIS Quarterly, 44(1), 1–37.
Bharadwaj, A. (2020). Digital transformation and organizational resilience: A study of SMEs in emerging markets. Journal of Business Research, 115, 1–12.
Bican, P. M., & Brem, A. (2022). Digital transformation and sustainability in SMEs: A systematic review. Sustainability, 14(4), 1234–1256.
Calice, P., Benattia, T., Carriere, A., & Davin, E. (2015). Simplified enterprise survey and private sector mapping: Libya 2015. World Bank Group.
CFR. (2016). Intervening better: Europe’s second chance in Libya. European Council on Foreign Relations.
Danvers, W. (2016). Next steps in Libya: Economic and governance stabilization in the face of political and security challenges. Center for American Progress.
Elgazzar, H.(2015). Labor market dynamics in Libya: Reintegration for recovery. World Bank Group.
ElMadani, M. A., & AlDhbbah, T. S. (2024). Digital transformation as an approach to achieving sustainable development in Libya. Journal of Social Studies, 30(5), 26–46. https://doi.org/10.20428/jss.v30i5.2533
Elmansori, E., & Arthur, L. (2014). Obstacles to innovation faced by small and medium enterprises (SMEs) in Libya. International Journal of Innovation and Knowledge Management in Middle East & North Africa, 3(2), 201–214.
General Information Authority. (2022). Proposed government digital transformation strategy in the State of Libya.
González-Varona, J. M., López-Paredes, A., Poza, D., & Acebes, F. (2024). Building and development of an organizational competence for digital transformation in SMEs. arXiv Preprint. https://doi.org/10.48550/arXiv.2406.01615
Heliyon. (2023). Sustainable digital transformation in small and medium enterprises (SMEs): A review on performance. Heliyon, 9(3), e13908. https://doi.org/10.1016/j.heliyon.2023.e13908
Martínez-Peláez, R., Escobar, M. A., Félix, V. G., Ostos, R., et al. (2024). Sustainable digital transformation for SMEs: A comprehensive framework for informed decision-making. Sustainability, 16(11), 4447. https://doi.org/10.3390/su16114447
Meelad, A. S., Khatibi, A., Tham, J., & Azam, S. M. F. (2024). Effects of business innovation and technology adoption on Libyan SMEs’ performance: Mediation by sustainable development. Journal of Business and Social Review in Emerging Economies, 10(2), 299–310. https://doi.org/10.26710/jbsee.v10i2.3057
OECD. (2016). The development dimension: SMEs in Libya’s reconstruction: Preparing for a post-conflict economy. OECD Publishing.
OECD. (2023). Digital infrastructure and resilience of SMEs: Policy recommendations. OECD Publishing.
Proietti, S., & Magnani, R. (2025). Assessing AI adoption and digitalization in SMEs: A framework for implementation. arXiv preprint. https://arxiv.org/abs/2501.08184
Sagala, G. H., & ?ri, D. (2024). Exploring digital transformation strategy to achieve SMEs resilience and antifragility: A systematic literature review. Journal of Small Business & Entrepreneurship. https://doi.org/10.1080/08276331.2024.2392080
UNDP. (2015). Instability and insecurity in Libya. United Nations Development Programme. https://www.humanitarianresponse.info/sites/www.humanitarianresponse.info/files/assessments/instability_and_insecurity_in_libya_final.pdf
Wang, Z. (2025). Digital transformation and organizational resilience: Financial and managerial pathways. Technological Forecasting and Social Change, 211, 122428. https://doi.org/10.1016/j.techfore.2025.122428
Alasfar, B. M. B., & Halim, H. A. (2026). Enhancing the Resilience of Libyan SMEs through Digital Transformation: Toward a Sustainable Economy. International Journal of Academic Research in Economics and Management Sciences, 15(1), 566–579.
Copyright: © 2026 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode