Digital Transformation in Family Firms: Evidence from the European Union

Abstract

Recent global events, such as the Covid-19 pandemic and the disruptive advance of digital technologies, have triggered profound transformations in the European business landscape, particularly affecting small and medium-sized family-owned enterprises. Representing between 65% and 80% of businesses in the European Union and employing around 100 million people, these firms now face the challenge of reconciling foundational family values with the urgent need for technological adaptation. Digital transformation has evolved from a strategic opportunity into a critical condition for competitiveness, innovation, and sustainability. However, the adoption of digital technologies is not uniform. Internal factors, such as governance structures, organizational culture, digital skills, and technological infrastructure, significantly shape companies' readiness for digitalization. At the same time, external factors, such as access to public and private financing, the strength of local business ecosystems, regional innovation networks, and regulatory clarity, are crucial for enabling the adoption of technologies, particularly those with higher complexity. In this context, this thesis aims to analyse in an exploratory way how family businesses in the European Union are adopting digital transformation, analysing their implementation patterns, the internal and external factors that influence this process, as well as the capabilities and strategies that can facilitate effective adoption of digital technologies. The results obtained show a strong complementarity, allowing for a comprehensive and articulated understanding of digital transformation in European family businesses. Study 1 highlighted the following theoretical domains: i) "Digital Transformation: Dynamic Capabilities and Organizational Strategies", ii) "Challenges, Facilitators, Innovation, and Entrepreneurship in Technological Ecosystems," and iii) "Cooperation and Sustainability in the Digital Age". Study 2 reveals a still low and uneven adoption of digital technologies, identifying three distinct implementation patterns conditioned by factors such as sector, size, seniority and financial capacity. Finally, Study 3 shows that companies with internal and external conditions positively influence the adoption of digital technologies, especially when they have a favourable attitude towards digital transformation. This attitude, known as the ‘technological approach’, proved to be essential, in that the more positive it is, the greater the likelihood of adopting technologies. This research proposes an integrated model that links dynamic capabilities, contextual enablers, and organizational strategies, contributing to theoretical development and offering practical recommendations for business leaders and policymakers. The findings highlight the importance of fostering a more inclusive, strategic, and sustainable digital transition for family businesses in a rapidly evolving global environment.