This study explores the role of digitalization on Small and Medium-sized Enterprises in Albania, evaluating how the factors that enhance adoption of digital tools by SMEs. In a rapidly changing economic and technological landscape, digital transformation has become a key factor for business competitiveness and sustainability. Hence, the study aims to investigate the impact of digitalization on the performance of SMEs, focusing on how digital adoption, skills, institutional support, and training influence competitiveness and operational transformation. Using a quantitative research approach, data were collected from SMEs through structured questionnaires and analyzed using descriptive and inferential statistical methods.

The findings reveal that the adoption of digital tools has a significant positive relationship with market expansion and business performance, confirming that digital engagement enhances competitiveness and customer reach. However, no significant link was found between the number of digital tools used and the level of operational digitalization, suggesting that Albanian SMEs often implement technology in fragmented ways. High costs and a lack of digital skills were identified as the main barriers to digital transformation, while institutional support showed minimal influence on adoption levels. Interestingly, training initiatives displayed a reversed effect, indicating that existing programs may lack practical, implementation-oriented content.

The study concludes that although awareness of digitalization among Albanian SMEs is increasing, progress remains limited by financial constraints, skill shortages, and weak institutional coordination. The research contributes to the broader literature by providing empirical evidence from a developing economy context and by emphasizing the need for integrated policies, targeted financial assistance, and hands-on training to strengthen SME digital maturity in Albania.