Environmental Saturation and Uneven Digital Adoption Among Service SMEs in Qatar: A PLS-SEM Study

Abstract

Qatar offers small and medium-sized enterprises (SMEs) an unusually uniform environment for digitalization, with advanced infrastructure, generous public programs, and strong market pressure, yet digital adoption varies widely between firms. This study asks whether that environment still explains the variation. Using the technology-organization-environment (TOE) framework, we surveyed owners and managers of service-sector SMEs through 165 invitations in April 2026 and analyzed 158 screened responses with partial least squares structural equation modeling (PLS-SEM). The model tested the effects of technological readiness, organizational readiness, environmental support, competitive pressure, and customer expectations on digital adoption, each measured on five-point scales. Organizational readiness was the strongest predictor (β = 0.671), technological readiness had a smaller significant effect (β = 0.297), and the model explained 74.5% of the variance. No environmental construct was significant, although four of the five environmental conditions were rated near the top of the scale. We interpret this as environmental saturation, a reading the diagnostics favor over a measurement ceiling: conditions shared by nearly all firms no longer distinguish adopters, leaving a divide in internal capability. Policymakers should fund diagnosed capability gaps, training, and implementation advice rather than further general provision, and managers should prioritize leadership commitment and staff skills.