Enhancing employee digital skills in SMEs for sustainable growth in the digital transformation era: A governance outlook

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Abstract

In the rapidly evolving Industrial Revolution 4.0, digital skills are a core factor enabling enterprises to maintain and grow in the global market. They improve production and business efficiency, enhance labor productivity, and strengthen competitiveness. However, the lack of digital skills among employees in Vietnam’s enterprises reduces competitiveness, hampers productivity, and hinders sustainable economic development. This study aims to identify and analyze key challenges faced by employees in small and medium-sized enterprises (SMEs) during the national digital transformation toward a digital economy and society. Using a mixed-methods approach, combining surveys and in-depth interviews with 306 SMEs in major cities, the study reveals four main barriers to developing employees’ digital skills: 1) financial constraints; 2) difficulty in allocating time for training; 3) limited access to training resources; and 4) insufficient government support. Based on these findings, recommendations are proposed to help SMEs overcome these barriers, build a digitally skilled workforce, and enhance competitiveness in the digital era.

Keywords: Digital Skills, Digital Transformation, Employee Upskilling, SMEs, Vietnamese Enterprises

Authors’ individual contribution: Conceptualization — T.T.D. and T.T.H.L.; Methodology — T.S.N. and T.T.H.D.; Software — T.S.N. and T.T.H.D.; Investigation — T.S.N. and T.T.H.D.; Data Curation — T.S.N.; Writing — Review & Editing — T.T.D., T.T.H.L., T.S.N., and T.T.H.D.; Supervision — T.T.D. and T.T.H.L.; Project Administration — T.T.D.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: J82, M10, O15, O32

Received: 22.05.2025
Revised: 14.08.2025; 23.12.2025
Accepted: 05.01.2026
Published online: 07.01.2026

How to cite this paper: Dam, T. T., Lam, T. T. H., Nguyen, T. S., & Dam, T. T. H. (2026). Enhancing employee digital skills in SMEs for sustainable growth in the digital transformation era: A governance outlook. Journal of Governance and Regulation, 15(1), 54–63. https://doi.org/10.22495/jgrv15i1art5