In the modern era of rapid development, information technology has emerged as an essential tool in organizations worldwide. Today, the exponential progress in technological development has enhanced the digital landscape of the leading firms (e.g., high-tech SMEs), allowing organizations to discover newer ways of differentiation (Gomber et al., 2018). High-tech SMEs refer to the many scientific and technological companies that are engaged in scientific and technological research, developing activities, obtaining independent intellectual property rights, and creating high-tech products or services to achieve sustainable development. By the end of 2019, the number of SMEs in China had exceeded 30 million, contributing to more than 50% of the nation’s tax revenue, more than 60% of GDP, more than 70% of technological innovation achievements, and more than 80% of labor employment.

However, the positive development momentum of high-tech SMEs was broken by the sudden outbreak of COVID-19. From February to August 2020, the scale of revocation of high-tech enterprises in China reached 66,000 and the cancelation rate was 4.5% according to the global patent database of the State Intellectual Property Office, which was higher than the overall level of manufacturing and producer services, such that the number and proportion of revocation in high-tech SMEs were significantly higher than those of high-tech large enterprises.

In today’s fast-growing environment, the world’s economies have strived to create significant competitive positioning (Liu and Atuahene-Gima, 2018; Shah et al., 2019a). However, in recent years, the competitive advantage has dynamically evolved with the changing business environment. The evolving realities have allowed the emerging technologies to deliver innovative capabilities, thus establishing a profound foundation for firms’ core competencies and competitive advantage (Nayak et al., 2021). Prior studies have examined enterprise growth, development, and competitive advantage, and core competence has become an important research topic. Barney believed that only having valuable, heterogeneous, non-imitative, and irreplaceable resources can bring lasting competitive advantage to enterprises. Notably, science and technology is the primarily productive force (Scarbrough, 2003). In this regard, core technology competence could be achieved through increasing research and development (R&D) efforts, innovation, and transformation of technological achievements to gain competitive advantages and to show the primacy of technological core competence in high-tech enterprises (Ding and Liu, 2018; Sarfraz et al., 2020).

Undoubtedly, extended digitalization has increasingly forced firms to operate in fierce competition. The organizations functioning in such an environment have fundamentally attained a distinctive edge by embracing advanced technological competence. Core technological competence is the foundation and critical part of scientific and technical enterprises. However, in today’s social environment, the technological upgrading faced by high-tech SMEs has been very rapid. As such, high-tech SMEs must maintain one or several differentiated core technologies (Shah et al., 2019b; Feng et al., 2020). A company with core technology will be more competitive (Voinescu and Moisoiu, 2015). Independent innovation effectively builds the core competitiveness of high-tech SMEs. Therefore, high-tech SMEs should adapt to the external environment and constantly promote the upgrading of products and R&D.

A company’s resources can create excellent performance and transform it into a competitive advantage (Barney, 1991; Tukamuhabwa et al., 2021). Organizational capacity is also a scarce resource for the development of enterprises (Zavolokina et al., 2016). At the same time, organizations should be able to understand their environment and future change trends, increase innovation and R&D of new technologies, occupy the market, and form a productive circular relationship.

China’s technology R&D and transformation of scientific and technological achievements are guaranteed in a good organizational framework. High-tech SMEs are a group of typical technology-driven enterprises; to create more resource advantages than competitors, there must be a structure with a strategic vision to lead the enterprise to success. A flexible organization, through the accumulation of ability and knowledge, can respond to environmental changes at any time and find the most appropriate strategy to obtain a competitive advantage (Shan et al., 2019). Therefore, the current study will focus on the core technical competencies required to gain high-tech SMEs’ competitive advantage through organizational flexibility.

A firm’s technological capabilities strengthen its competence, thus providing a competitive advantage (Shan et al., 2019). Therefore, the purpose of this research was to examine the effect of core technology competence on competitive advantage. We investigated core technology competence in three dimensions based on the actual situation in China. Organizational flexibility is also divided into three dimensions, which are mediating variables. This extends previous research, which independently examined the impact of core technology and organizational flexibility on competitive advantage but found that core technology will bring core rigidity, which will hinder competitive advantage. The results will help us to fully understand how to manage enterprises to survive in the COVID-19 pandemic situation, and how organizational flexibility and technological transformation affect competitive advantage in the current context. Finally, we found that increasing R&D rather than conservative investment during the pandemic is an effective institutional mechanism to increase competitive advantage. This extends existing research that reports on the impact of technological R&D on competitive advantage.

The rest of this review is organized as follows: We propose the research model and hypotheses in section 2. Section 3 reports methodology and data collection. Section 4 reports the finding, and section 5 discusses the findings. We present the study contribution and limitations in section 6.

This study adopts the empirical research method, and the required data were collected by questionnaire. In the process of questionnaire analysis, we deleted the unreasonable options and improved the questionnaire. A seven-point Likert scale was selected for the questionnaire items measurement ranging from 1 to 7 (1—extremely disagree, 2—disagree, 3—slightly disagree, 4—uncertain, 5—slightly agree, 6—agree, and 7—very agree). The formal questionnaire consists of three parts: the first part is the background of the questionnaire—this part mainly explains the rationality of the survey purpose; the second part is the basic information of the survey enterprise and the personal information of the participants—to help confirm whether the received questionnaire is representative, and the third part is the main part of the questionnaire, with a total of 37 items, including core technology, organizational flexibility environmental uncertainty, enterprise performance, and four categories.

Core technical competence is the independent variable in this study. The measurement items of core technical competence are based on the studies of Long and Vickers-Koch (1995). The core technical competence variable was measured on a scale of 15 items. The core technical competence is divided into three dimensions: infrastructure and technology, state-of-the-art technology, and innovative R&D capability. Organizational capability is a mediating variable in this study, and the scale was adopted from the studies of Jansen et al. (2005) and Zahra et al. (2006). We can observe that high-tech SMEs are keen on technological upgrading, strategic cooperation, and creating competitive advantages with product technology innovation. Therefore, this study considers R&D investment, enterprise personnel size, and enterprise age as control variables. Competitive advantage scale was taken from the study of Chen (2008).

The sample size should be kept at more than 150 in the data analysis with the structural equation model (Anderson and Gerbing, 1988), and the ratio of measurement items to respondents should be in the range of 1:5 to 1:10. Still, a higher ratio is more favorable (Gorsuch, 1997). There are 37 measurement items in this study. According to this standard, the sample size of this study should be at least 210–420 self-built. At the same time, some scholars have proposed that too large a sample size will affect the maximum likelihood estimation. Through the careful consideration of the relevant research, this study determines the sample size as 300–400 to ensure the reliability of the research results.

Here are two ways to distribute the questionnaire: The first way is to distribute and recycle the questionnaire according to the pre-determined research objects, mainly select specific MBA students from universities and qualified middle and senior managers of enterprises selected through personal relations and distribute the questionnaire by directly receiving the enterprise site or e-mail. The second is to entrust the contact person in the organization for questionnaire distribution and collect the questionnaire. In this study, we have adopted an electronic questionnaire, which is more convenient in the current circumstances.

A total of 410 questionnaires were distributed, and 380 questionnaires were received from the participants. We have excluded 66 incomplete questionnaires from the received questionnaires. Finally, 314 valid questionnaires were kept for data analysis. The sample size met the requirements of the data analysis method for large sample data (Christopher Westland, 2010).

The current study data analysis includes two steps. First, we examined the measurement model to test reliability and validity. Then, we examined the structural model to test the research hypotheses. We examined data normality before data analysis. Table 1 shows the skewness and kurtosis values of each item which are below 2, suggesting good normality (Curran et al., 1996).

First, we checked the reliability through Cronbach’s α coefficient method. The composite reliability (CR) method should be used for measurement testing. In terms of validity tests, this study mainly adopts convergent validity and differential validity (discriminant validity) to measure the validity of the questionnaire. Each AVE (the average variance extracted) is greater than 0.5, reaching the acceptance standard; the CR value meets the threshold requirement of greater than 0.7, indicating that the questionnaire has good convergent validity. The test results of discriminant validity are shown in Table 1. The correlation coefficients of the variables are less than the square root of the AVE value of the variables. To sum up, the scale in this study meets the requirements in terms of reliability and validity.

Second, the main variables included in this study passed the test of reliability and validity. Structural equation modeling was used to analyze the assumed relationship between core technical competence, organizational flexibility, and sustainable competitive advantage. Based on the conceptual model constructed in this study and the corresponding research assumptions, the initial structural equation model’s path diagram is constructed using AMOS22.0. F1 represents infrastructure and technology, F2 represents state-of-the-art technology, F3 represents innovative R&D capability, F4 represents technological flexibility, F5 represents structural flexibility, F6 represents cultural flexibility, and F7 represents sustained competitive advantage. There are seven latent variables in the study. The study’s independent variables are infrastructure and technology, state-of-the-art technology, and innovative R&D capability. The four internal-derived latent variables (dependent variables) of enterprises’ are technological, structural, cultural, and sustainable competitive advantages. The model has residuals of e1–e33 and e34–e37, and their path coefficients are one by default. This study will verify the 15 impact paths set in the initial structural equation model. AMOS22.0 analyzed the initial structural equation model. Table 2 shows the values of average variance extracted and correlation.

Table 3 presents the results of the relationships between study variables. As shown in Table 3, the path coefficients of the two paths fail to pass the significance test.

The empirical results show that the standardized path coefficient of infrastructure and technology and sustainable competitive advantage is 0.243 (p < 0.001). The standardized path coefficients of state-of-the-art technology and innovative R&D capability to sustainable competitive advantage are 0.044 (p = 0.460) and 0.075 (p = 0.277), respectively. This shows that the infrastructure and technology of core technology competence have a significant positive effect on sustainable competitive advantage. In contrast, state-of-the-art technology and innovative R&D capabilities have no direct effect on sustainable competitive advantage.

Infrastructure and technology are the foundation of enterprises. Enterprises with only solid basic skills can survive during the epidemic. Table 4 shows the recommended and actual values of model fit. As shown in Table 4, model fit indices have better actual values than the recommended values.

It is worth noting that the influence of state-of-the-art technology and innovation and R&D capability on competitive advantage are established under organizational flexibility.

Table 5 shows that organization flexibility fully mediates the effect of state-of-the-art technology, innovation, and R&D capability on competitive advantages. In contrast, organization flexibility partly mediates the effect of infrastructure and technology on competitive advantages.

Enterprises’ R&D capability does not directly affect the competitive advantage of enterprises in the study results. This may be due to enterprises’ high expenditure on resources and resources engaged in R&D during the COVID-19. Still, due to the shrinking market demand, this kind of input and output is not proportional to the income, and it is not necessary to carry it out during COVID-19.

Improving enterprise core technology competence can help enhance organizational flexibility, which is an effective way to improve core technology competence. The empirical analysis by constructing a structural equation model shows that the standardized path coefficients between infrastructure and technology and technology flexibility, structural flexibility, and cultural flexibility are 0.334 (p < 0.001), 0.290 (p < 0.001), and 0.288 (p < 0.01), respectively. The standardized path coefficients between state-of-the-art technology and technical flexibility, structural flexibility, and cultural flexibility are 0.185 (p = 0.004 < 0.01), 0.276 (p < 0.001), and 0.178 (p = 0.005 < 0.01), respectively. The standardized path coefficients between innovative R&D capability and technological flexibility, structural flexibility, and cultural flexibility are 0.292 (P < 0.001), 0.293 (P < 0.001), and 0.264 (P < 0.001), respectively. The results show that actively strengthening the core technology construction of SMEs can help cultivate and enhance enterprises’ organizational capacity.

The empirical results show that all dimensions of organizational flexibility positively affect sustainable competitive advantage, which strongly proves the importance of organizational flexibility in enhancing SMEs’ competitive advantage. By constructing a structural equation model for empirical analysis, we draw the following conclusions: The standardized path coefficient between technological flexibility and competitive advantage is 0.279. The standardized path coefficients between structural flexibility and competitive advantage were 0.179 (P = 0.008 < 0.01). The standardized path coefficients between cultural flexibility and firm performance are 0.215 and 0.215, respectively (p < 0.001). Thus, the dimensions of organizational flexibility have a significant positive impact on sustainable competitive advantage.

Significantly, this empirical study focuses on the degree to which firms’ core competencies provide a competitive advantage. However, to record the study findings, it is vital to understand the results in correspondence with the previous literature. Hence, this section highlights the prime drivers that provide a firm’s competitive advantage. Overall, this section illustrates the study results in light of previous literature reviews.

Undoubtedly, knowledge and technology build an enterprise’s core competencies (Zhou et al., 2018). A firm’s competitive advantage based on technology is the most fundamental tool driving its competitiveness. A firm’s technological innovation strengthens its core competencies, thus fostering competitiveness. In explaining this notion, the research states that the technological management construct adds value to a firm’s processes, thereby achieving a competitive advantage (Dezi et al., 2021). Hence, this prior research supports our study’s findings that reveal a positive relationship between firms’ technological competence and competitive advantage. Hence, this prior research supports our study’s findings that reveal a positive relationship between firms’ technological competence and competitive advantage.

However, in today’s business environment, the technology infrastructure enables firms to outperform their competitors. Therefore, in this regard, the literature states that today’s firms capture the potential markets through their technology and infrastructure competence, thus achieving a competitive advantage (Qosasi et al., 2019). Moreover, in today’s technological era, state-of-the-art technology and R&D capabilities enhance high-tech SMEs’ performance and effectiveness. Perhaps, to attain a competitive advantage, today’s state-of-the-art innovations have helped businesses to improve their operations, thereby gaining an enduring competitive edge (Aceto et al., 2019). Our study results are consistent with the previous literature, meaning H1 (i.e., a, b, and c) is proven.

In particular, the turbulent business environment, unpredictable changes, and technological shifts have forced companies to cope with a dynamic changing environment. In this regard, organizational flexibility has allowed companies to combat the emerging business challenges, thereby profoundly gaining an enduring edge. In explaining this notion, the research states that the direct effect of organizational flexibility potentially provides marginal benefits to companies in the shape of competitive advantage (Koçyiğit and Tabak, 2020). Further, in recent years, technologies have rapidly evolved, thus requiring firms to adapt to the changing market environment (Chester and Allenby, 2019). In correspondence with the prior literature, our results also showed that organizational flexibilities (i.e., technological flexibility, structural flexibility, and cultural flexibility) promote a firm’s enduring competitive advantage. Hence, based on the current findings, we accept the prior assumptions made in H2 (e.g., a, b, and c).

The rise in organizations’ flexibility has inevitably increased scholars’ interest in a competitive advantage. Therefore, understanding this factor requires organizations to focus on different organizational flexibilities (e.g., technological, structural, and cultural) to attain improvised organizational outcomes. As such, the prior research states that a firm’s structural flexibility improves its technology and infrastructure, thus allowing the organization to operate in a turbulent business environment (Liu et al., 2018). Similarly, our study also showed a positive mediating role of organizational flexibilities, leading us to accept H3. Altogether, our study findings have found a significantly positive relationship, thus supporting the prior assumptions made in hypotheses H1, H2, and H3.

This research has a few limitations. First, although the topic selection and related research design are scientific and objective and the expected research objectives and some valuable conclusions are achieved, due to the limitation of the specific background, time, funding, and personal knowledge of COVID-19, the compositional dimensions and measurement of organizational flexibility of high-tech SMEs are still in the exploratory stage. Second, to narrow the scope of the study and make the research more accurate and targeted, this study takes high-tech SMEs as the main research object. To study the accuracy of the results, we used the size of the enterprise and the years of its establishment as a control variable, but there are other control variables that may also have an impact on the results of the study, which could be explored in future research.

The results of this study demonstrated that, during COVID-19, the only factors that could directly affect the sustained competitive advantage of high-tech SMEs were infrastructure and technology. During COVID-19, SMEs have been eager to seize market share through transformation and innovation; however, many enterprises neither are ready for transformation nor have the ability for cross-domain development, because new products and new technologies are updated too fast, and management cannot keep up with development. Management is busy creating momentum and making money, relaxing the cultivation and transformation of basic business and basic technology, resulting in enterprises not only failing to gain a competitive advantage but also failing to hold their position in the COVID-19 pandemic situation. Overall, with the impact of the global pandemic, the serious recession of the world economy, and the decline in domestic consumption, investment, and export, we should pay more attention to the cultivation of basic technology and skills.

The empirical results show that technological flexibility and structural flexibility have a significant positive impact on sustainable competitive advantage. Therefore, organizational flexibility with high flexibility and agility is an important basis for the formation of competitive advantage and plays a key role in the promotion of sustainable competitive advantage. Under the continuous influence of COVID-19, we should attach great importance to the organization from a strategic perspective. The promotion of flexibility can enhance a high-tech SME’s ability to resist environmental uncertainty and maintain a sustainable competitive advantage. In the COVID-19 pandemic context, high-tech SMEs should form an alliance under the consideration of the strategic goal between the individual enterprise and individuals, exchange complementary resources independently, reach the phased goal of the target product, respectively, obtain the long-term market competitive advantage, and then form a lasting and formal relationship.

The original contributions presented in this study are included in the article/supplementary material, further inquiries can be directed to the corresponding author.

TT wrote the main manuscript. KI proofread and revised the manuscript. AR gave the core idea. All authors contributed to the article and approved the submitted version.

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

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