Artificial Intelligence Adoption for Sustainable Growth in SMEs: An Extended Dynamic Capability Framework

The adoption of Artificial Intelligence is transforming enterprises worldwide, influencing various aspects of business operations and affecting all dimensions of the triple bottom line. Companies ready to leverage the potential of this technology can significantly improve their performance. Therefore, it is crucial to understand the relationship between internal capabilities and contextual factors on one hand, and Artificial Intelligence adoption and its impact on performance on the other. Within this research framework, this study introduces an extended dynamic capability framework to analyze the interplay between internal factors, Artificial Intelligence adoption, and companies performance. The proposed model is tested using Partial Least Squares—Structural Equation Modeling on survey data from 210 Italian innovative startups. The findings indicate that companies with well-developed dynamic capabilities, enabling them to adapt more effectively to environmental changes, are also better equipped to adopt Artificial Intelligence, leading to positive social, economic, and environmental performance.