Adaptation of strategic innovation management to regional sustainable development: Lessons from global SMEs and the DCT approach

This study examines how strategic innovation management can be adapted to support regional sustainable development in small and medium-sized enterprises (SMEs), using the digital transformation capabilities (DCTs) lens and a comparative focus on Kyrgyzstan and China. Beyond empirical comparison, the study advances innovation and regional development theory by conceptualising DCTs as regionally contingent mechanisms through which SMEs align innovation management practices with sustainability objectives under differing institutional and infrastructural conditions. The analysis integrates secondary statistical data from official sources (2020–2024) with a comparative case-study design encompassing Huawei, Alibaba, Gree Electric Appliances, the Zhejiang A&F University Smart Agriculture Park, and selected SMEs in Kyrgyzstan (Naryn-Agro, Osh-Fruit, Textile-Kyrgyzstan). Quantitative procedures include ANOVA with post-hoc testing and multicollinearity diagnostics (VIF), complemented by a PESTEL framework and expert validation of interview and case materials by two independent reviewers. The results reveal statistically significant cross-country differences in SME performance and digital adoption, with China exhibiting faster integration of advanced digital tools and more coherent, policy-enabled innovation ecosystems, while Kyrgyzstan demonstrates slower diffusion and sector-specific uptake concentrated primarily in agriculture. Case evidence further indicates that DCT-enabled practices yield sustainability benefits primarily when combined with supportive financing instruments, adequate digital infrastructure, and sustainability-orientated governance mechanisms. The study concludes that, in resource-constrained regions, regional sustainable development is best supported by hybrid strategies that integrate accessible digital tools, targeted capability-building, and coordinated government–business interaction, rather than by direct replication of large-economy digital transformation models.