Technology Adoption Readiness in Family-Owned SMEs: A Strategic Framework for Digital Transformation in Tier-2 Indian Cities

Abstract

Family-owned small and medium enterprises (SMEs) in India’s tier-2 cities form the backbone of regional economies, yet they persistently lag in digital transformation despite falling technology costs, expanding connectivity, and active government promotion. Mainstream adoption models — TAM, UTAUT, and the technology–organisation–environment (TOE) framework — explain part of this lag but miss the distinctive logic of family firms, where decisions are filtered through socioemotional wealth: the preservation of family control, identity, reputation, and succession. This paper develops a strategic readiness framework tailored to this context. We first analyse how family-firm characteristics and tier-2 city conditions jointly shape adoption behaviour, identifying six readiness dimensions: strategic intent, family governance alignment, digital capability, financial readiness, process maturity, and ecosystem support. For each dimension we specify observable indicators and staged interventions, integrating them into a maturity-graded framework that owners, advisors, and policy agencies can apply diagnostically. We argue that transformation programmes fail in family SMEs not primarily for technical or financial reasons but at the governance dimension — where digital initiatives collide with succession dynamics, informal authority, and trusted-relationship business models — and we show how readiness sequencing that respects socioemotional wealth converts family attributes from barriers into transformation assets. Implications are drawn for SME policy design, advisory practice, and future empirical validation.