Upstream and Downstream Digital Transformation for Development

This chapter examines the impact of digital transformation on small and medium-sized enterprises (SMEs), emphasizing the distinction between upstream technologies (e.g., automation, robotics, logistics) that enhance production efficiency and downstream technologies (e.g., e-commerce, digital marketing) that strengthen customer engagement. Based on empirical research from Italian manufacturing SMEs in the food sector, the chapter highlights how integrating these technologies with cross-cutting tools like AI and data analytics fosters innovation, supports new business models, and promotes sustainability. The findings demonstrate that while upstream technologies are key to improving operational efficiency and achieving sustainability goals, downstream technologies are essential for driving customer-focused innovation and differentiation. The study underscores the critical need for SMEs to adopt a holistic approach to digital transformation and provides actionable insights on using digital tools to achieve strategic competitiveness in a rapidly evolving global market.