Perceived Benefits and Barriers of ICT Adoption among SMEs

Perceived Benefits and Barriers of ICT Adoption among SMEs

Khong Sin Tan (Multimedia University, Malaysia) and Uchenna Cyril Eze (BNU-HKBU United International College, China)
DOI: 10.4018/978-1-4666-3886-0.ch029
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Abstract

Small and Medium Enterprises (SMEs) are a key economic sector in Malaysia. In 2005, there were 99.2% or 518,996 SMEs in the country. They contributed to 65.1% of employment and 47.3% of labor productivity. Due to the importance of SMEs, the Malaysian government formed National SME Development Council (NSDC) in 2004 to oversee the development of SMEs in the country. On the other hand, in order to leverage the power of ICT, particularly the Internet, Malaysian government formed National Information Technology Council (NITC) in 1994 to provide information and communication technology (ICT) assistance to Malaysian companies. This chapter examines perceived benefits and barriers of Internet-based ICT adoption among SMEs in Malaysia. Questionnaire was used to collect data from 406 managers/owners of SMEs in Malaysia. Analysis reveals the composite ICT benefits and barriers to ICT adoption. The chapter ends with a discussion and interpretation of the findings including key implications for research, practice and policy.
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Introduction

The definition of SMEs in Malaysia was standardized nationwide in the second meeting of National SME Development Council (NSDC) in 9th June 2005. Table 1 and Table 2 illustrate the new definition of SMEs.

Table 1.
SME definition in terms of annual sales turnover
SizePrimary
Agriculture
Manufacturing (including Agro-Based) & Manufacturing-Related ServicesServices Sector (including ICT)
Micro< RM 200 k< RM 250 k< RM 200 k
SmallRM 200 k - < RM1 mRM 250 k - < RM 10 mRM 200 k - < RM 1 m
MediumRM 1 m - RM 5 mRM 10 m - RM 25 mRM 1 m - RM 5 m
SME< RM 5 m< RM 25 m< RM 5 m

Source: National SME Development Council, 2005

Table 2.
SME definition in terms of full-time employees
SizePrimary AgricultureManufacturing (including Agro-Based) & Manufacturing-Related ServicesServices Sector (including ICT)
Micro< 5 employees< 5 employees< 5 employees
Small5-19 employees5- 50 employees5-19 employees
Medium20-50 employees51-150 employees20-50 employees
SME< 50 employees< 150 employees< 50 employees

Source: National SME Development Council, 2005; Ndubisi 2008

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