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Digital leadership, not delivery chops, predicts Nigerian SMEs' intent to adopt AI: strategic, interpersonal and personal capabilities raise owner-managers' stated readiness to implement AI, aided by an innovative organisational climate and amplified by medium firm size.

Leading in the Digital Age: Digital Leadership Capabilities, Organisational Innovation Climate, and AI Adoption Intention Among SMEs in Nigeria

A. Idowu, Y. Babalola · Fetched July 13, 2026 · Systems

semantic_scholar correlational low evidence 7/10 relevance Summary only summary available; pdf_status=paywall DOI Source PDF

Among Nigerian SME owner-managers, strategic, interpersonal and personal digital leadership capabilities are positively associated with intention to adopt AI, with organisational innovation climate partially mediating some effects and firm size strengthening the interpersonal pathway in medium firms.

Although small and medium enterprises (SMEs) anchor employment and output across Sub-Saharan Africa, their uptake of artificial intelligence (AI) lags global benchmarks, and prevailing explanations dwell on capital, infrastructure, and institutional voids while overlooking the leadership competencies that determine whether available resources are mobilised at all. Addressing this gap, the present study asks how the digital leadership capabilities of SME owner-managers shape their intention to adopt AI in Nigeria, and through what organisational mechanisms and under what boundary conditions this influence operates. Anchored in the Diffusion of Innovation Theory and the Tigre–Henriques–Curado model of digital leadership, a cross-sectional survey was administered to owner-managers of registered SMEs drawn from six states; a sample of 390 was derived from a population of 23,290 firms using the Taro Yamane formula with proportionate allocation, and 306 valid responses were retained. Partial Least Squares Structural Equation Modelling (WarpPLS 8.0) was applied after confirming reliability (Cronbach’s α: 0.69–0.84; composite reliability: 0.83–0.88), convergent validity (AVE: 0.56–0.67), and common method bias control. Strategic (β = 0.298), interpersonal (β = 0.245), and personal attribute (β = 0.129) capabilities each significantly raised AI adoption intention. In contrast, delivery-related capabilities (β = 0.090, p = 0.057) did not, indicating that pre-adoption intention is governed by cognitive-strategic and relational competencies rather than execution skills. Organisational innovation climate partially transmitted the effects of strategic and interpersonal capabilities, and firm size amplified the interpersonal pathway in medium-sized firms. The study contributes a leadership-centred account of AI adoption in an under-researched African setting and, by estimating mediation and moderation within a single framework, clarifies both why and when digital leadership translates into AI readiness, yielding capability-specific guidance for owner-managers and SME support policy.

Summary

Main Finding

Digital leadership capabilities of SME owner‑managers in Nigeria—especially strategic and interpersonal competencies (and to a lesser extent personal attributes)—significantly increase intention to adopt AI. Delivery‑related capabilities do not predict pre‑adoption intention. Organisational innovation climate partially mediates the strategic and interpersonal effects, and firm size (medium vs small) strengthens the interpersonal → intention pathway.

Key Points

The study reframes low AI uptake among Sub‑Saharan African SMEs as not only a capital/infrastructure problem but also a leadership capability problem.
Significant direct effects on AI adoption intention (standardised betas):
- Strategic capability: β = 0.298 (significant)
- Interpersonal capability: β = 0.245 (significant)
- Personal attribute capability: β = 0.129 (significant)
- Delivery‑related capability: β = 0.090 (p = 0.057, not statistically significant at conventional levels)
Organisational innovation climate partially mediates the effects of strategic and interpersonal capabilities on adoption intention.
Firm size moderates the interpersonal pathway: the positive effect of interpersonal capability on AI intention is amplified in medium‑sized firms compared with small firms.
Theoretical framing: Diffusion of Innovation Theory + Tigre–Henriques–Curado model of digital leadership; the study focuses on pre‑adoption intention (readiness), not on realized adoption or implementation success.

Data & Methods

Population and sampling:
- Frame: registered SMEs across six Nigerian states (population N = 23,290).
- Sampling: proportionate allocation using the Taro Yamane formula; intended sample = 390; retained valid responses = 306.
Design: cross‑sectional survey of SME owner‑managers.
Key constructs:
- Predictors: digital leadership capabilities disaggregated into strategic, interpersonal, personal attribute, and delivery‑related capabilities.
- Mediator: organisational innovation climate.
- Moderator: firm size (small vs medium).
- Outcome: intention to adopt AI (pre‑adoption).
Analysis:
- Partial Least Squares Structural Equation Modelling (WarpPLS 8.0).
- Reliability: Cronbach’s α range 0.69–0.84; composite reliability 0.83–0.88.
- Convergent validity: AVE range 0.56–0.67.
- Steps taken to control for common method bias.
- Mediation and moderation estimated within the same structural framework.
Limitations noted by design: cross‑sectional self‑report data (intention vs behavior), single‑country focus (Nigeria).

Implications for AI Economics

Rethinking adoption friction: Economic models of AI diffusion in low‑income settings should incorporate leadership capital as an independent constraint on adoption, not only financial, infrastructural, or institutional frictions.
Targeting interventions:
- Policy and donor programs should fund leadership development (strategic visioning, digital strategy, networking/partnership skills) for SME owner‑managers to raise AI readiness.
- Strengthening organisational innovation climates (e.g., incentives for experimentation, knowledge sharing) can amplify returns to leadership training.
- Medium‑sized firms may yield higher marginal returns from interpersonal leadership interventions.
Program design and cost‑benefit:
- Capacity building that focuses on strategic and relational competencies is likely to increase intention to adopt AI faster than training narrowly focused on technical delivery skills; delivery skills may be more relevant post‑adoption.
- Development practitioners should factor leadership capability gaps into uptake rate estimates and timelines for SME AI interventions.
Research and modeling directions:
- Incorporate leadership capability heterogeneity into diffusion models to better predict SME adoption rates and aggregate economic impacts.
- Conduct longitudinal and behavioral studies linking intention → actual uptake → productivity outcomes to quantify the economic returns to leadership interventions.
- Explore interactions between leadership capabilities and resource constraints (capital, digital infrastructure) to identify complementary or substitutable policy levers.

Assessment

Paper Typecorrelational Evidence Strengthlow — Findings are based on cross-sectional, self-reported intentions (not observed adoption or economic outcomes) and therefore only establish associations; despite reasonable measurement checks and SEM, there is no quasi-experimental variation or longitudinal design to support causal claims and potential selection, omitted-variable and common-method biases remain. Methods Rigormedium — Study uses a reasonably sized, proportionally allocated sample (306 valid responses from a sampling frame of 23,290 registered SMEs), reports reliability (Cronbach’s α 0.69–0.84), composite reliability (0.83–0.88) and AVE (0.56–0.67), and applies PLS-SEM with tests for common-method bias; however, the cross-sectional design, reliance on self-reported intention measures, possible non-response/selection bias, and absence of robustness checks (e.g., alternative identification strategies, sensitivity analyses, or validation with behavioral outcomes) limit rigor. SampleCross-sectional survey of owner-managers of registered SMEs drawn from six Nigerian states; initial sample frame 23,290 firms, sample size calculated via Taro Yamane with proportionate allocation, 390 returned surveys and 306 valid responses retained; variables are self-reported measures of digital leadership capabilities (strategic, interpersonal, personal, delivery-related), organisational innovation climate, firm size, and intention to adopt AI. Themesadoption org_design IdentificationCross-sectional survey of SME owner-managers with Partial Least Squares Structural Equation Modelling (WarpPLS) to estimate associations, mediation (organisational innovation climate) and moderation (firm size); reliability and convergent validity reported and common-method bias tested — no exogenous source of causal variation or temporal ordering. GeneralizabilityLimited to registered SMEs in six Nigerian states — may not represent unregistered, informal, or other-region SMEs in Nigeria or other African countries, Context-specific institutional, cultural and infrastructural factors in Nigeria may limit transferability to other countries, Findings concern stated intention to adopt AI, not observed adoption behavior or productivity/wage outcomes, Owner-manager self-reports raise risk of social desirability and common-method bias, Possible sectoral heterogeneity not detailed — effects may differ across industries, Cross-sectional design prevents inference about temporal dynamics of adoption

Claims (11)

Claim	Direction	Outcome	Confidence & Evidence	Details
A cross-sectional survey of owner-managers of registered SMEs was drawn from six states; a sample of 390 was derived from a population of 23,290 firms using the Taro Yamane formula with proportionate allocation, and 306 valid responses were retained. Other	null_result	sample size / survey responses	Reading fidelity high Study strength high	n=306 0.5
The measurement instruments demonstrated acceptable reliability and convergent validity: Cronbach's α ranged from 0.69 to 0.84, composite reliability from 0.83 to 0.88, and AVE from 0.56 to 0.67. Other	null_result	measurement reliability and convergent validity (Cronbach's α, composite reliability, AVE)	Reading fidelity high Study strength high	n=306 Cronbach’s α: 0.69–0.84; composite reliability: 0.83–0.88; AVE: 0.56–0.67 0.5
Strategic digital leadership capabilities significantly increase SME owner-managers' intention to adopt AI (β = 0.298). Adoption Rate	positive	intention to adopt AI	Reading fidelity high Study strength medium	n=306 β = 0.298 0.3
Interpersonal digital leadership capabilities significantly increase SME owner-managers' intention to adopt AI (β = 0.245). Adoption Rate	positive	intention to adopt AI	Reading fidelity high Study strength medium	n=306 β = 0.245 0.3
Personal attribute digital leadership capabilities significantly increase SME owner-managers' intention to adopt AI (β = 0.129). Adoption Rate	positive	intention to adopt AI	Reading fidelity high Study strength medium	n=306 β = 0.129 0.3
Delivery-related digital leadership capabilities did not significantly affect AI adoption intention (β = 0.090, p = 0.057). Adoption Rate	null_result	intention to adopt AI	Reading fidelity high Study strength medium	n=306 β = 0.090, p = 0.057 0.3
Organisational innovation climate partially mediates the effects of strategic and interpersonal digital leadership capabilities on AI adoption intention. Adoption Rate	positive	intention to adopt AI (mediated by organisational innovation climate)	Reading fidelity high Study strength medium	n=306 0.3
Firm size amplifies the interpersonal capability → AI adoption intention pathway in medium-sized firms (moderation by firm size). Adoption Rate	positive	intention to adopt AI (moderated by firm size)	Reading fidelity high Study strength medium	n=306 0.3
Analysis was performed using Partial Least Squares Structural Equation Modelling (WarpPLS 8.0). Other	null_result	statistical analysis method	Reading fidelity high Study strength high	n=306 0.5
The study is theoretically anchored in Diffusion of Innovation Theory and the Tigre–Henriques–Curado model of digital leadership. Other	null_result	theoretical framework used	Reading fidelity high Study strength low	not reported 0.15
Although SMEs anchor employment and output across Sub‑Saharan Africa, their uptake of AI lags global benchmarks, and prevailing explanations emphasize capital, infrastructure, and institutional voids while overlooking leadership competencies. Adoption Rate	mixed	AI uptake relative to global benchmarks; emphasis of prior explanations	Reading fidelity high Study strength low	not reported 0.15