2.1. Digital Technologies
The term digital technologies refers to the set of intelligent and innovative technologies, such as big data analytics, IoT, and cloud computing, that make it possible to achieve connection, communication, and automation. Digital technologies enable companies to transform their current product or service model into an intelligent model and to adopt data-driven strategies to become more competitive [
11]. The emergence and deployment of digital technology increase the innovation potential of businesses. In a world where companies operate in a highly competitive environment, they are increasingly under pressure to maximise their resources for innovation and to improve their performance. Therefore, companies that adopt innovation using digital technology can increase their performance and become innovative companies [
12]. The use of digital technologies such as artificial intelligence, cloud computing, data mining, and IoT in companies leads to major business advances such as increased customer experience and interaction, simplification of operations, and business innovation [
13]. Digital technologies, including information and communication technologies, have allowed some small businesses to combine independence and flexibility with larger domains and the accessibility of large companies in order to overcome some commitments [
14].
In addition, due to the COVID-19 outbreak of 2020, which has had a significant impact on global behaviour, the simultaneous maturity of several key digital technologies in information and communication technology have progressed at an unprecedented speed, and each sector and industry has been affected by evolution and innovation. Digital technologies such as artificial intelligence, IoT, blockchain, and the development of fifth-generation wireless networks (G5) have created an effective ecosystem for identifying and using new opportunities in business and industry [
15,
16]. Digital technologies and platforms are transforming existing businesses and industries. New business models, new products, new forms of innovation, and transformation in established businesses to adapt their business operations and strategies in the digital era are among the implications of digital technologies for businesses and entrepreneurship [
17]. The importance of digital technologies in the twenty-first century has been well perceived. The use of digital technology in business has been a determining factor in helping management, service, and production factors, increasing productivity and innovation [
18]. Digital technologies can help small- and medium-sized enterprises achieve growth and innovation. Digital technologies play a major role in any business and facilitate cooperation among companies, information storage and data analysis, and bring innovation to the business [
19]. The emergence of a diverse set of new and powerful digital technologies, platforms, and digital infrastructures has transformed innovation into extensive organisational and policy implications. The use of digital technologies has had a major impact on business innovation processes [
20].
Researchers argue that digital technologies in business have three aspects: new ways of organising, achieving collective goals, and innovation in processes [
21]. Digital technologies as an active element strengthen initiatives for businesses and have a major impact on innovation processes. Accordingly, the existing literature suggests that digital technologies can promote corporate innovation [
20,
22]. Digital technologies increase the range of opportunities to increase innovation. One of the most important of these is the collection of huge and diverse volumes of data. A large volume of data is generated while the end-user enjoys a digital product [
23]. Big data enables companies’ digital platforms to develop complementary technologies and services. For example, user participation is an effective way for organisations to reduce innovation challenges [
24]. Big data can be investigated in four management areas: big data and supply chain strategy, big data and customisation strategies, big data and strategic planning and strategic value creation, and big data and knowledge management [
25]. Big data analytics capabilities represent vital tools for business competition in highly dynamic markets [
26]. With the rapid popularity of big data analytics, academics and professionals are exploring the tools through which they can incorporate the changes these technologies make into their competitive strategies [
27].
Companies can use the “data utilisation” strategy to enhance service innovation through an inter-system approach and analyse customers, examine behaviours, assess the needs independently by users online to increase new product development based on their expectations, and address the end-user or other ecosystem actors. In addition, by using the “sell data” strategy, they can increase the company’s value chain from an extroverted perspective [
23,
28]. Big data enables companies to generate insights that can help enhance their dynamic capabilities, which has a positive impact on the innovation enhancing capabilities [
29,
30]. Big data analysis has expanded to gain a competitive advantage among companies [
31]. Artificial intelligence technology is also used as an effective enabler to increase the value of the business. Increasing attention to artificial intelligence in business is due to technological maturity. From a business point of view, artificial intelligence and data analysis systems systematise information and turn data into business decisions that facilitate corporate decision-making processes [
32]. Artificial intelligence changes companies and the way they manage innovation management. Artificial intelligence changes the organisation to an innovative digital organisation by replacing human resources. Companies use artificial intelligence to innovate their processes [
33].
In general, research suggests that cloud computing, Internet of Things (IoT), big data, data mining, artificial intelligence (AI), blockchain, and cyber-physical systems are digital technologies that could create winners and losers worldwide. They cause entrepreneurship, change, and innovation in enterprises, especially small enterprises [
16,
34]. Adoption of digital technologies leads to innovation and entrepreneurial orientation [
35]. The use of digital technologies in business leads to entrepreneurial orientation in companies. Companies with entrepreneurial orientation are more flexible, have a high-risk acceptance, and perform more effectively [
36].
2.2. International Markets
The rate of internationalisation is a key concept in the international trade literature for businesses, and is often seen as a rapid entry into foreign markets. The importance of this issue creates opportunities and pressures for domestic companies in emerging markets in order to improve their competitive position [
37,
38]. Previous studies suggest that businesses can use internal networks with internationally experienced partners to accelerate their internationalisation process or they can cooperate with foreign partners to strengthen technological innovation capabilities and to improve international performance [
39,
40]. Many studies also suggest that internal networks are located in local markets, so a practical option for businesses is to gain foreign market knowledge to coordinate and guide internationalisation activities [
41,
42].
Relational capital, union activity, and foreign market knowledge are considered key factors in creating international business performance and improving the development of technological innovation capability [
39,
40]. Internal networks are located in local markets, so they act as a practical option for businesses to gain foreign market knowledge so as to coordinate and direct internationalisation activities [
41]. In the internationalisation of businesses, researchers have identified the significant role of foreign market knowledge [
43], and stated that gaining such knowledge could accelerate entry into the international arena [
44]. A lack of this knowledge leads to experimental decision making, which does not give a clear picture of the business decisions and leads to finding customers through weak links, trade fairs, and unwanted export orders, as well as to the experience of entering and re-entering the market. Acquiring knowledge leads to systematic and program-based decisions and stronger links [
45,
46]. Relational capital refers to intangible assets that can be acquired through the relationship between foreign companies and customers, and reflects an organisation’s ability to interact with a wide range of external stakeholders (such as customers, suppliers, competitors, and business and industrial associations) and leads to the implicit knowledge gained in these relationships [
47,
48].
Relational capital improves access to knowledge resources, builds trust in relationships with partners, and facilitates knowledge exchange by increasing the expectations and motivation for the value of knowledge [
49,
50]. Alliance proactiveness is defined as the willingness to find opportunities for strategic alliances with potentially valuable companies [
51]. Relationships with external partners can have several benefits for companies. To achieve such benefits, companies must develop competencies and capabilities that increase their ability to create and absorb value in inter-organisational collaboration [
52]. This orientation helps companies develop relationships with new partners through newly formed alliances. As companies can engage competitors through alliance proactiveness [
53], alliance proactiveness is a key in business performance. As a basis for alliance management capability, it enables companies to respond more quickly to emerging opportunities and gain initial benefits [
54], and can contact alliances before competitors or better predict the outcomes of alliances, which will lead to the success of alliances [
55]. Thus, alliance leadership can be a key tool for creating a suitable environment for alliances among companies and for ensuring competitive advantage through providing sourcing [
56]. It can also lead to superior market-based performance, and this impact is stronger for small companies and in unstable market environments [
57].
2.3. Entrepreneurial Orientation
Entrepreneurial orientation (EO) is an organisational orientation towards new entry and value creation, and depicts the entrepreneurial decisions, methods, and actions used to create a competitive advantage [
58]. EO is one of the most common and well-known research structures in the entrepreneurial literature. It is a strategic orientation implemented at the company level. It includes the methods adopted by the company to develop strategies, administrative philosophies, and behaviours that are inherently entrepreneurial [
59]. EO can be observed in the processes of an organisation and the organisational environment. It is considered the key to achieving better performance and helps companies find better solutions through differentiation so as to increase the acceptance of environmental complexities. EO leads to introducing new products, services, innovations, markets, or business models that did not exist before [
60]. Entrepreneurial orientation is a structure at the company level that seeks to actively attract and take advantage of every opportunity. It also results in creating organisational culture, practices related to the learning process, and the identification of new opportunities and innovation [
61]. EO displays the strategies within the mental framework as well as the perspective on entrepreneurship, which is reflected in the company’s ongoing processes [
62].
EO is considered a vital element for companies’ competitive advantage, growth, and performance. Market share, sales volume, and increased earnings indicate high growth, which is related to the entrepreneurial orientation of a company. Studies have indicated that EO leads to innovation, risk-taking, and business performance activity [
63]. EO guides innovative strategies towards identifying and exploiting entrepreneurial opportunities, adopting innovative strategies to cope with crisis and environmental uncertainty in order to achieve the desired goals [
64]. EO shows the company’s strategic orientation towards innovation and risk-taking. As a structure at an organisational level, it shows a forward-looking orientation that supports innovation and risk-taking behaviour. Studies have identified innovation as the heart of EO [
65]. As a structure at the organisational level, it also shows a forward-looking orientation that supports innovation and risk-taking behaviour. EO results are not always positive and can lead to failure and even bankruptcy [
66]. Companies tend to participate in entrepreneurship to maintain performance and survive in highly dynamic and competitive environments. A review of the existing literature suggests a relationship between entrepreneurial orientation and innovation [
67]. EO is a crucial element for corporate innovation and affects corporate innovation performance [
68].
2.4. Business Innovation in Emerging Markets
Innovations are usually created in developed countries and then transferred to developing countries [
69]. However, innovation has expanded in resource-constrained environments, mainly in developing countries, in recent decades [
70]. Product innovations for low-service customers in developing countries have been identified as an opportunity to create new markets. However, the current literature shows limited studies on the methods of developing innovation capabilities for these poor customers in developing countries [
71]. Frugal innovation (FI) has emerged as a new way to serve consumers in developing countries [
72]. FI has been defined in various ways and overlaps with other concepts, such as resource-constrained innovation and destructive innovation [
71]. The quality and number of innovations developed in businesses from emerging countries is increasing dramatically. Frugal innovation (FI) represents a new entrepreneurial perspective in which resource-constrained small enterprises develop innovations for low-income customers in low-income countries. Frugal innovations also create new markets and contribute to the trade stability of products [
72]. Frugal innovation focuses on developing lower-priced but well-performing products that meet the needs of consumers with limited purchasing power in resource-constrained emerging countries [
73]. Innovations in desirable products with a high quality that meet the needs of consumers with resource limitations have created an extraordinary demand in emerging markets. Frugal innovations are mainly developed by local R&D subsidiaries of developed companies in emerging countries. A significant degree of independence for the R&D subsidiaries can facilitate the development of frugal innovation [
74]. Frugal innovation should meet the basic needs of resource-constrained consumers by providing value improved at an affordable price (cost). Based on whether companies put their main emphasis on reducing costs or increasing value, we identified two types of frugal innovation, namely, cost innovation and valuable cost-effective innovation [
6].
Previous studies have emphasised the systemic nature of market innovation. They suggest that a particular change in one market will probably lead to other changes in that market [
75]. Markets are not essentially closed systems, but overlaps and interferences among different markets are seen commonly and frequently. Now, the question is how market innovation is done at the intersection of two (or more) existing markets. By combining elements from different markets, innovators may seek to change one of these markets or create a new market. Combined market innovation is increasingly common in the world of modular processes and market intersections, and both conceptual and empirical works are needed to explain such processes and help managers deal with them [
76]. It is recommended that Western companies rely on emerging market partners when trying to develop frugal innovations for these emerging markets. This recommendation is based on the idea that emerging market consumer requirements may not be familiar to Western companies and that local developers may better understand local needs [
77]. Thus, large Western companies often work with companies in developing countries to develop products to meet local needs [
78], allowing them to combine advanced knowledge with local knowledge to develop appropriate solutions [
77]. Frugal innovations enable new and unprecedented applications. Companies need to adjust value creation mechanisms to implement frugal business models [
79].
A review of research in business innovation in emerging markets has formed the conceptual framework of the research. It indicates that in the formation of business innovation in emerging markets, there is probably a significant direct relationship between international market components and new digital technologies, and a mediating relationship between entrepreneurial orientation and business innovation. Identifying the contribution of each component and item in the formation of business innovation in emerging markets can help market stakeholders, strategists, and researchers analyse the conditions and requirements of such markets. In addition, by reviewing the research background to identify the theoretical gap, it was found that due to the importance of the use of new digital technologies in the present and future, and the impact of emerging markets from international markets in previous studies, the relationship between these two components in the form of business innovation has not been considered in emerging markets. Thus, the present study investigates the impact of international markets and new digital technologies on business innovation in emerging markets.