Unlocking economic potential: digital transformation, business resilience, and Thailand's local digital economy

In an era of rapid digital disruption, many very small enterprises (VSEs) in emerging economies struggle to adapt and sustain competitiveness within the expanding digital economy. This research examines how digital transformation (DT) drives the development of Thailand's VSEs within the local digital economy (LDE), emphasizing the mediating role of business resilience (BR). Adopting a quantitative approach, data were collected through structured questionnaires from 370 VSE owners across Thailand and analyzed using structural equation modeling (SEM). The empirical framework assessed both direct and indirect pathways linking DT to LDE performance, with BR conceptualized as a strategic capability. The results reveal that DT exerts a significant positive effect on LDE outcomes, both directly and indirectly through enhanced resilience. Firms that integrate digital technologies with adaptive capabilities are more capable of navigating uncertainty, sustaining operations, and achieving long-term competitiveness. These findings extend the theoretical understanding of digital transformation by integrating dynamic capability and resource-based perspectives, positioning resilience as a key mechanism that converts digital potential into economic value. The study offers practical implications for policymakers and small business leaders seeking to promote resilient digitalization strategies that foster inclusive and sustainable local economic growth.