Abstract
Every SME needs to use ICT artifacts to cope with business development. The adoption and use of ICT involve different actors who make sense of ICT in relation to their work environment. This chapter focuses on the cordons or barriers in ICT adoption that deter them from having a competitive advantage. The purpose of this chapter is to explore the interactions between different actors in the SME network and analyze how they influence the SME ICT adoption process. The study contributes to the body of knowledge through a new construct that enriches the conceptual framework with the findings of the research.
TopIntroduction
Small and Medium Enterprises are important to all economies in the world, but especially to developing countries. For this reason, governments around the globe, invest more of their time in the development of the SMEs sector to foster economic growth (Travica, 2002). On what we may call the “static” front, SMEs contribute to the mainstream economy to the creation of “decent” jobs; especially for those that run SMEs. With all this information, coupled will make SMEs the biggest employer and may close the inequality between the rich and the poor. On the other hand, SMEs are a nursery for the larger firms of the future, many of these larger firms started on a small scale before they expanded their operations to be accorded a large firm status. They contribute directly and often significantly to aggregate savings and investment, and they are involved in the development of appropriate technology. A sector might have considerable weight in GDP, say, but be easily substituted by other sectors, in which case its share of GDP could greatly overstate its true importance. It is a fact, at any level of a country’s development, that some needed activities involve few or no economies of scale while others involve considerable higher economies of that sort. The size of this distribution is greatly influenced by SMEs. International trade can also influence that distribution. An important challenge in many countries is to assure that a significant share of output takes place outside the overly capital intensive large-scale sector. Achievement of this goal is more difficult if SMEs activity, in general, is discouraged by policy or setting within. It can be facilitated when large firms subcontract other parts of that process to smaller more Labour intensive firms. It can also be facilitated by the phenomenon referred to as “clusters” in which small firms collaborate to handle those aspects of the business that are indeed characterized by economies of scale. The ideal setting within which SMEs can play a positive contribution to the maximum thus includes these structures and their advantages. In developing countries with large informal or micro-enterprise sectors, SMEs constitute the middle of the size range, a fact that explains much of their strategic importance. In terms of organizational structure, SMEs are, considerably more complicated, involving largely the self-employed and people employed in other large organizations.
The SME sector has a critical role in the development of the economy, reduction of poverty and the creation of employment in developing economies (Hellberg, 2000). Given traditional methods and newer ICT tools, adding increasing value to Small and Medium Enterprises operations and they remain competitive in the business. Small and Medium Enterprises should be encouraged to be at the forefront of all economic activities to ensure that their participation is meaningful and that they remain competitive in the market. Small and Medium Enterprises are faced with many barriers that prevent them from ICT adoption. However, competition among SMEs and larger businesses is difficult since the well-established business has the resources at their disposal and the capacity to adapt easily ICT and usage while this is the opposite for smaller businesses. Adopting a mixed methods approach this study is based on the Davis (1989), Technology Acceptance Model which comprises of two theoretical constructs, perceived usefulness and perceived ease of use, which are the fundamental determinants of system use, and predict attitudes toward the use of the system, that is, the user’s willingness to use the system. Many of the challenges faced by SMEs hinders them from adopting ICT and increasing their competitiveness. Importantly, there is also a relative need that SMEs adopt ICT. However, this can only be achieved when barriers affecting its adoption are determined, addressed by both SMEs and the relevant stakeholders in the sector. Hence, the objectives of this study are to investigate and determine the barriers to ICT adoption and the usefulness of ICT by Small and Medium Enterprises for gaining competitive advantage.
Key Terms in this Chapter
Cordons: Anything serving to obstruct, or preventing, access, or progress. Anything or something that limits a quality or achievement or the act of limiting or the condition of being limited or cause delay. Barriers come in many forms and from many sources. They can be temporary or permanent. When evaluating a barrier, it is necessary that one looks at all the activities that precede the delay as well as the activities that follow the delay.
Business: Pertains broadly to commercial, financial, and industrial activities.
Small and Medium Enterprises (SMEs): Is a term for segmenting businesses and other organizations that are somewhere between the “small office-home office” size and the larger enterprise. Country to country this term may vary, but it is usually based on the criteria of investment, number of employees and turnover, etc.
Information technology (IT): The umbrella term that encompasses the entire field of computer-based information processing: computer equipment, applications, and services, telecommunication links and networks, digital databases, and the integrated technical specifications that enable these systems to function interactively. IT is study or use of systems (especially computers and telecommunications) for storing, retrieving, and sending information.
Challenges: Something that by its nature or character serves as a call to make special effort, a demand to explain, justify, or difficulty in a undertaking that is stimulating to one engaged in it.
Transformation: The act or process of transforming, change in form, appearance, nature, or character or alteration, especially a radical one. A change in position or direction of the reference axes in a coordinate system without an alteration in their relative angle.
Innovation: Something new or different introduced, it is the act of innovating which includes introduction of new things or methods. Innovation is also introduction of a new idea into the marketplace in the form of a new product or service, or an improvement in organization or process. The process of translating an idea or invention into a good or service that creates value or for which customers will pay.
Competitive advantage: An advantage that firms has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the knowledge, skills, structure, product offerings, distribution network, and support.
Technology: The branch of knowledge that deals with the creation and use of technical means and their interrelation with life, society, and the environment, drawing upon such subjects as industrial arts, engineering, applied science, and pure science; method for convening resources into goods and services.