From AI Readiness to Knowledge Advantage: Explaining SME Performance through a TAM-TOE-KBV Framework

Abstract

This study examines the determinants of the innovation readiness of SMEs, as well as the effect of AI on knowledge creation and SME performance in Ghana. The study builds on the extended Technology Acceptance Model, the Technology-Organisation-Environment framework, and the Knowledge-Based View, and examines the relationship between technological, organisational, and environmental factors and AI readiness, as well as between AI readiness and knowledge-based competitive outcomes. A cross-sectional quantitative design was used. The secondary data analyzed were harmonized to create a confirmatory analytical dataset of 412 SME observations from Ghana derived from the World Bank Enterprise Survey 2023, SME Reports, Ghana eTrade Readiness Assessment, and the Bank of Ghana FinTech Sector Report Q1 2025. The findings show that the quality of digital infrastructure, financial resource availability, and top management’s commitment are the most important factors for readiness to engage in AI innovation. The organisation's absorptive capacity has a significant mediating effect on the relationship between knowledge creation and AI readiness, and between firm performance and AI readiness. But it’s also significantly influenced by the regulatory landscape, and that can vary from firm to firm depending on the size. This study adds to the digital innovation and SME performance literature by introducing TAM, TOE, and KBV in the context of sub-Saharan Africa. It contextualises the potential contribution of the National AI Strategy 2025-2035 in creating enabling conditions for AI readiness, knowledge building, and performance improvement of SMEs in Ghana.