Strategy for ICT Adoption in SMEs

Strategy for ICT Adoption in SMEs

Copyright: © 2020 |Pages: 16
DOI: 10.4018/978-1-5225-9425-3.ch011
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Adoption of ICT can help SMEs cut costs by improving their internal processes, improving their product through faster communication with their customers. In retrospect, even with such information as indicated above, and the importance of ICT as an enabler to other sectors and to economic development having long been recognized, SMEs seem slow in its adoption and use as compared to other sectors. While there has been growth in ICT use by large enterprises to gain a competitive edge, there is little evidence of its adoption and use by SMEs which continue to be faced by limited access to information and markets. As a result of this phenomenon, the study into deterrents of ICT adoption by SMEs is warranted. By adopting descriptive research design, the study employed stratified random sampling technique, the target population for the study being auto components manufacturing SMEs within Pune region in India.
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Entrepreneurship is increasingly recognized as an important driver of economic growth, productivity, innovation and employment, and it is widely accepted as a key aspect of economic dynamism. Transforming ideas into economic opportunities is the decisive issue of entrepreneurship (Baporikar, 2018a; 2018b). History shows that economic progress has been significantly advanced by pragmatic people who are entrepreneurial and innovative, able to exploit opportunities and willing to take risks (Hisrich, 2008). It makes sense therefore to conclude that, throughout the world entrepreneurship is the tap root from which Small and medium enterprises (SMEs) emerge, converting later to big enterprises in the world today. The rapid development of information and communication technologies (ICT) which changes the existing business structures and ways of communication extremely influence metamorphosis and the growth- spread of SMEs. It is known that the adoption and use of ICT represents fundamentals of competitiveness and economic growth for companies, organizations and even countries that are able to exploit them (Steinfield, LaRose & Chew, 2012).

On the other hand, technology has been a key element in the growth and development of societies. It is a combination of knowledge, techniques and concepts; it is tools and machines, farms and factories. It is organization, processes and people. The cultural, historical and organizational context in which technology is developed and applied is the key to its success or failure. In short, technology is the science and the art of getting things done through the application of skills and knowledge (Baporikar, 2016). SMEs, Small business entity is widely known and recognized in India next only to agriculture. In terms of its overall contribution to the Indian economy, Small and Medium Enterprises or Small sector, in fact, is better placed than India’s agricultural sector. SME often have limited IT/IS resources as well as they are lacking in expertise, these limitations often culminate in SMEs being incapable of exploiting their use of IT to its full potential or developing the information system (IS) (Chan and Chung, 2002). Technological innovation is a key factor in a firm’s competitiveness. Technological innovation is unavoidable for firms which want to develop and maintain a competitive advantage and/or gain entry in to new markets (Becheikh, Landry and Amara, 2006). SMEs find it difficult to make the upgrades as they need to stay competitive in both domestic and international markets (Rao, Phani kumar, Kalpana and Hymavathi, 2011). Among organisations different organisations of different sizes are more agile towards the changing situation and are ready to adopt new ideas for the development. The flexibility of SMEs, their simple organizational structure, their low risk and receptivity are the essential features facilitating them to be innovative; therefore, SMEs across industries have the unrealized innovation potential (Chaminade and Vang, 2006).

Key Terms in this Chapter

Globalization: Globalization is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happen. Worldwide integration and development, the process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications.

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.

Competitiveness: Act of competing for some honor, or advantage. Rivalry between two or more persons or groups for an object desired in common, usually resulting in a victor and a loser but not necessarily involving the destruction of the latter. The need for global competitiveness is much important for any industry to sustain in this competitive world.

Government: The organization, machinery, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it. It is a political system by which a body of people is administered and regulated.

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.

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