Digitization of Enterprises: Assessing the Adoption and Impact of Digital Tools in Small and Medium Enterprises in Gilgit-Baltistan

Abstract

This study investigates the adoption and impact of digital tools among Small and Medium Enterprises (SMEs) in the remote region of Gilgit-Baltistan, Pakistan, with a specific focus on gender differentials. Employing a mixed-methods research design, the study analyzes data from 55 SMEs through quantitative surveys and in-depth qualitative interviews. The findings reveal a "mobile-first" digital landscape where social media and communication apps (e.g., WhatsApp, Instagram) are the dominant business tools, while adoption of advanced systems like ERP remains low. Statistical analysis demonstrates a strong, positive relationship between digital adoption and business performance, with regression results indicating that digital maturity is a significant predictor of revenue growth (R² = 0.658). However, the qualitative analysis identifies severe infrastructural deficits—specifically unreliable internet connectivity—as the primary barrier to scalability. Furthermore, the study highlights a distinct gender divide: while female entrepreneurs face greater structural constraints regarding training and finance, they are successfully leveraging social commerce to bypass traditional mobility restrictions and access wider markets. The research concludes that while digitalization is a potent driver of economic resilience in Gilgit-Baltistan, unlocking its full potential requires targeted policy interventions in physical infrastructure and gender-inclusive digital literacy programs.