Boosting SMEs survival: dynamic capabilities in business activities

During the current era of globalization, several industrialized economies, such as Germany, Japan, and the United States (US), have achieved success due to the presence of Small and Medium-sized Enterprises (SMEs) operating within their borders (Nathali et al., 2023). According to Moffat (2021), many people mistakenly believe huge businesses control the US economy. Meanwhile, per Brown (2018), virtually all enterprises in the US employ fewer than 500 individuals, categorizing them as small-scale business organizations. Specifically, the US has delineated an SME as a business entity that employs no more than 500 individuals. Since consumers place a high value on small businesses' responsiveness to community needs and desires, as well as their ability to adapt to changing economic conditions, small businesses have historically played a vital role in the American economy (Moffat, 2021). In a comparable manner, young, successful entrepreneurs emerge from Malaysia's thriving SME sector, which is crucial to the country's economy (Mustiraya et al., 2021). Furthermore, it helps other communities get jobs, which is great for young people (Mustiraya et al., 2021). Without a doubt, in today's times, it is essential for all businesses and companies to exhibit unwavering endurance in every given situation. Specific categories of establishments, particularly smaller and medium-sized ones, exhibit a lack of survival and yielding to external influences. Notably, the elevated failure rate of SMEs is extensively recorded. On a global scale, SMEs encounter considerable challenges that impede their sustainability, especially in unstable markets and during external crises. As reported by the U.S. Bureau of Labor Statistics, approximately 20% of small enterprises experience failure within their initial year, 50% by the fifth year, and merely around 33% endure beyond a decade (U.S. Bureau of Labor Statistics, n.d.). Correspondingly, data from the United Kingdom indicates that nearly 60% of minor enterprises discontinue their operations within a span of three years (Statista, n.d.). In contrast, SMEs have grown due to minimal entry barriers and entrepreneurial endeavors (SCORE, 2022). For instance, in the US, over 4.4 million new enterprises were established in the year 2022 (SCORE, 2022). Despite the ease of starting this type of business, entrepreneurs face hurdles and obstacles in continuing operations in the long run. Walker (2019) emphasized that SMEs have restricted internal resources. Therefore, it is imperative to devise a solution, such as employing the Dynamic Capabilities (DCs) approach.