For small businesses operating far from major markets, technology is often presented as the obvious route to growth. A new study from Uttarakhand, India, suggests that the sequence may matter more than the technology itself. Among 293 ethnic minority enterprises, entrepreneurial and market orientation showed strong direct relationships with sustainable performance, while technological orientation played a smaller direct role and partly carried the benefits of the other two.
The distinction matters because digitalisation programmes frequently begin with tools: marketplace accounts, payment systems, smartphones and online selling skills. The new evidence points to a more conditional story. Technology appeared useful, but it worked partly as a route through which an enterprise’s existing entrepreneurial initiative and understanding of customers could reach the market.
A business question shaped by distance and scarce resources
The research, published in Future Business Journal on 25 September 2026, focused on ethnic minority entrepreneurs in Uttarakhand. The setting is important. Many of the businesses operate in handicraft, woodcraft and agriculture-related activities, often with limited access to formal finance, institutional support and large wholesale markets.
Rather than asking only what disadvantages these businesses face, researchers Raksha Benjwal and Anurag Nagar examined why enterprises exposed to similar constraints still differ in performance. They focused on three strategic orientations. Entrepreneurial orientation captures tendencies such as innovativeness, proactiveness and willingness to accept risk. Market orientation concerns understanding customers, competitors and market information. Technological orientation reflects a business’s tendency to adopt and use technology.
The researchers proposed that these orientations should not simply be treated as three independent ingredients. In a remote small enterprise, noticing an opportunity and understanding a customer do not automatically create a transaction. Digital tools can help turn that strategic intent into market access, payment and delivery. That makes technology a possible mechanism as well as a capability in its own right.
How the researchers tested the model
The sampling frame came from 2025 registration lists held by Uttarakhand’s Rural Enterprise Acceleration Project. After duplicate, inactive and ineligible records were removed, the researchers identified 3,500 eligible enterprises. They randomly sampled businesses and targeted 350 responses.
Data collection ran from September 2025 to March 2026. Six trained enumerators visited enterprises and sought the owner or the person responsible for decisions about pricing, purchasing and sales. Of 350 questionnaires administered, 304 were returned and 293 passed the researchers’ quality screening. That corresponds to an 86.9% return rate and an 83.7% usable response rate.
The survey adapted established measures of entrepreneurial, market and technological orientation, alongside a sustainable performance measure covering business growth, operational efficiency, competitiveness and longer-term outcomes. Items were rated on five-point scales. Because literacy could be limited, enumerators read items aloud in respondents’ preferred language after translation and back-translation procedures.
The measurement work was extensive. Standardised factor loadings ranged from 0.76 to 0.88. Cronbach’s alpha values ranged from 0.882 to 0.926, while composite reliability ranged from 0.920 to 0.935. Average variance extracted ranged from 0.624 to 0.744. The Kaiser-Meyer-Olkin measure was 0.917, and the exploratory factor analysis explained more than 60% of the variance.
The confirmatory factor model also met the authors’ stated fit criteria, including CFI = 0.926, TLI = 0.921 and RMSEA = 0.049. The researchers then estimated the structural model in AMOS and used 5,000 bootstrap samples for confidence intervals around the indirect effects.
Entrepreneurial and market orientation carried the strongest relationships
The central result was not simply that all three orientations were positively related to performance. Their relative roles differed.
Entrepreneurial orientation had the strongest association with sustainable performance. After technological orientation was included in the mediation model, the direct entrepreneurial orientation to performance path remained large and statistically significant at β = 0.63, p < 0.001.
Market orientation was almost as strong. Its direct relationship with performance remained significant at β = 0.62, p < 0.001 after technological orientation was included. The paper reports that market orientation explained 38.4% of the variance in enterprise performance in the relevant analysis.
Those findings are particularly interesting in owner-operated firms. In a large company, market information may have to move through departments before it becomes a decision. In a small workshop, the same person may observe customers, set prices and decide what to produce. The authors argue that this can reduce the coordination costs normally associated with market orientation.
That does not mean entrepreneurial behaviour or customer knowledge caused the higher performance. The study measured orientations and performance at one point in time. A successful business may also have more resources and confidence to behave proactively or invest in understanding its market. The coefficients therefore describe associations within the proposed model, not experimental effects.
Technology mattered, but mostly as an amplifier
Technological orientation was positively associated with performance but produced the smallest direct association of the three strategic orientations. In this setting, technology did not necessarily mean proprietary software or advanced research and development. It could mean a smartphone camera, digital payments, a marketplace listing or a delivery arrangement.
That helps explain the result. Widely available technology can expand reach without necessarily creating a durable competitive advantage on its own. A rival can often obtain the same tool quickly. What cannot be copied as easily is the owner’s knowledge of the product, customer and local market, or the judgement involved in spotting an opportunity before a competitor does.
The mediation analysis sharpened this point. Entrepreneurial orientation had a significant indirect relationship with performance through technological orientation of β = 0.10, SE = 0.04, t = 2.61, with a 95% bootstrap confidence interval from 0.03 to 0.18.
The corresponding indirect effect for market orientation was β = 0.08, SE = 0.04, t = 3.12, with a 95% confidence interval from 0.02 to 0.15. Because the direct entrepreneurial and market paths remained significant, the researchers classified both patterns as partial mediation.
Partial is the important word. If technology fully mediated the relationships, the results would suggest that entrepreneurial initiative and market knowledge needed a technological route to translate into performance. They did not. Businesses in these communities can still reach buyers through tourist traffic, seasonal fairs and community intermediaries. Digital channels add another route rather than replacing every existing one.
Why the order of support may matter
The findings have a practical implication for small-business development programmes. Giving a business a digital storefront does not create a distinctive product, identify a promising customer segment or make the owner more responsive to demand. If technology partly transmits the value of those strategic capabilities, digital training may deliver more when it follows product and market development rather than being treated as the starting point.
The authors accordingly argue for sequencing support. Product development and customer identification could precede digital modules. They also question whether subsidising inexpensive technology is the best use of scarce development funding when the harder problem may be helping owners use those tools to complete actual transactions.
This interpretation is more useful than a simple claim that digitalisation improves small-business performance. The study suggests that digital capability has context. A marketplace listing can widen the route to customers, but the listing still needs a product worth choosing and a business that understands who is likely to choose it.
Strong measurement does not remove the causal limits
The researchers took several steps to assess whether the survey method itself was driving the relationships. In Harman’s single-factor test, the first unrotated factor accounted for 16% of total variance, well below the commonly used 50% diagnostic threshold. A common latent factor analysis produced changes in factor loadings below 0.05 across items.
Those checks strengthen confidence that one obvious form of common-method bias was not dominating the results, but they cannot turn a cross-sectional survey into a causal experiment. All major variables were self-reported. Objective revenue, employment or profit records were not used to establish performance, and reverse causation remains possible.
Generalisability is another constraint. The sample came from handicraft, woodcraft and agriculture-related businesses in one Indian state. Minority-owned technology firms in a major city, for example, may face a very different relationship between technological capability and competitive advantage. The authors also note that technological orientation was measured using only two indicators, limiting how fully the construct could capture areas such as information technology infrastructure, research investment and innovation management.
A longitudinal design would be particularly valuable next. Following the same firms over time could test whether changes in strategic orientation precede changes in performance, whether successful firms subsequently become more entrepreneurial or technologically oriented, and whether the mediating role of technology becomes stronger as digital channels mature.
The broader lesson is about capability, not gadgets
The study adds a useful qualification to the enthusiasm surrounding small-business digitalisation. Among these 293 enterprises, technology was not irrelevant. It had its own positive relationship with performance and carried part of the relationship from entrepreneurial and market orientation to performance. But it was not the strongest strategic factor.
For resource-constrained enterprises, the scarce asset may be less the digital tool than the judgement that determines what to do with it. That distinction changes the policy question. Instead of asking only how to get more small firms online, development programmes may need to ask whether firms first have the product insight, customer knowledge and entrepreneurial capacity that make being online economically useful.
Source Information
Study: Strategic orientations and sustainable performance: evidence from ethnic minority enterprises
Authors: Raksha Benjwal and Anurag Nagar
Journal: Future Business Journal, Volume 12, Article 303
Published: 25 September 2026
DOI: 10.1186/s43093-026-01009-y
Study design: Cross-sectional survey of 293 ethnic minority entrepreneurs in Uttarakhand, India, analysed using exploratory factor analysis, confirmatory factor analysis and structural equation modelling, with 5,000 bootstrap samples for mediation estimates.
