Enhancing the Resilience of Libyan SMEs through Digital Transformation: Toward a Sustainable Economy

Abstract

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.