E-commerce adoption among SMEs has been much discussed in management
information technology and technological innovation literature. However, most
of these prior studies focused mainly on e-commerce awareness or factors that
influence e-commerce adoption. This study, on the other hand, attempts to
develop a holistic insight into e-commerce adoption by SMEs. It investigates
why some SMEs adopt e-commerce readily, and others do not. In addition, this
study investigates the appropriateness of government support for SMEs
encouraging them to adopt e-commerce. There is very little research that assesses
e-commerce adoption by SMEs, certainly none as extensive as this, and there is
also very limited empirical investigation of government support for SMEs to
adopt e-commerce. This study helps to fill this gap by exploring these issues
relating to e-commerce and SMEs.
The framework model proposed in this study was developed out of an integration
of various perspectives using the technological innovation literature, specifically
the DOl and TOE frameworks. This model considers internal factors (the
demographic characteristics of managers and their organisations), external
factors (particularly government support), and reasons for, benefits of, and
inhibitors to e-commerce adoption. Data for this study were collected through a
questionnaire survey of over three thousand SMEs in Malaysia and forty face-to-
face semi-structured interviews with SME managers and government officials .
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Results show there is a low level of adoption of e-commerce by SME managers
whether or not they received government e-commerce supports. E-commerce
usage hardly extends beyond e-mail. Online buying and complex websites, such
as websites with online ordering and online payment facility are not common.
Websites are used to provide contact details and information about the firm and
information about its goods and services only, without displaying prices. The
SME and SME manager demographic characteristics show significant
association with e-commerce adoption. Two important factors that facilitate e-
commerce adoption emerge from these characteristics namely SME location and
the manager's experience of living abroad. To encourage e-commerce adoption,
SMEs in developing countries need not only to have appropriate technology
infrastructure installed, but also to be in a location with good public
transportation services and efficient delivery methods. SME managers also need
experience of buying and selling on the Internet, which they might gain while
living abroad. The interviews raise a number of questions about the effectiveness
of government support programmes, and the ulterior motives of SMEs. The
benefits of e-commerce are more often perceived than achieved. Interestingly,
the reason that SMEs adopt e-commerce is to enhance company image, rather
than its efficiency. From the research findings, a series of recommendations for
e-commerce adoption among SMEs in Malaysia emerges, providing guidance for
policymakers, practitioners, and academics. Many recommendations, such as the
need to evaluate e-commerce initiatives, may perhaps be extended to government
K'T policies in the developing world as a whole. The study exposes many gaps,
often overlooked, between the rhetoric of e-commerce adoption and the reality.
The model proposed in this study may be comprehensive for e-commerce
adoption in firms. Future research can build on and extend the proposed
integrated model by including other potential factors from different contexts. It
will be helpful to explore other statistical analysis, either in the current model or
in an enhanced one. The findings will help towards a better understanding for
firms and government and suggest a quantitative basis for them to determine
favourable policies and conditions for expanding their e-commerce. This study provides the impetus for future research on many issues.