Internet‐based ICT adoption: evidence from Malaysian SMEs
| Pages | 224-244 |
| DOI | https://doi.org/10.1108/02635570910930118 |
| Date | 13 March 2009 |
| Published date | 13 March 2009 |
| Author | Khong Sin Tan,Siong Choy Chong,Binshan Lin,Uchenna Cyril Eze |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Internet-based ICT adoption:
evidence from Malaysian SMEs
Khong Sin Tan
Faculty of Business and Law, Multimedia University, Melaka, Malaysia
Siong Choy Chong
Putra International College, Melaka, Malaysia
Binshan Lin
Department of Management and Marketing,
College of Business Administration, Louisiana State University in Shreveport,
Shreveport, Louisiana, USA, and
Uchenna Cyril Eze
Faculty of Business and Law, Multimedia University, Melaka, Malaysia
Abstract
Purpose – The purpose of this paper is to investigate the innovative characteristics, benefits, and
barriers influencing internet-based information and communications technology (ICT) adoption
among the small and medium enterprises (SMEs).
Design/methodology/approach – A questionnaire-based survey was used to collect data from 406
managers or owners of SMEs in the southern region of Malaysia.
Findings – The results suggest that internet-based ICT adoption provides a low cost yet effective
communication tool for customers. However, security continues to be a major barrier. Finding on cost
as a barrier is mixed. The inferential statistics reveal that relative advantage, compatibility,
complexity, observability, and security are significant factors influencing internet-based ICT adoption.
Research limitations/implications – The study focuses only on the SMEs in the southern region
of Malaysia.
Practical implications – The findings offer valuable insights to policy makers in general and to the
SMEs in particular on the significance of the measured characteristics and the associated benefits and
barriers of internet-based ICT adoption.
Originality/value – The study is perhaps one of the first to comprehensively address internet-based
ICT adoption among the SMEs through the use of a wide range of variables.
Keywords Internet, Communication technologies,Small to medium-sized enterprises,Malaysia
Paper type Research paper
Introduction
The information and communication technologies (ICTs), particularly the use of
internet to conduct online business is quickly changing the conventional way of doing
business among brick and mortal companies. With the strong waves of globalization
and liberalization across the world, ICT is believed to be the most cost-efficient tool to
help companies gain bigger markets and the ability to compete with larger
organizations in attracting customers to their products, services and information
(Tan et al., 2009). This is in light with the advantages inherent in internet such as
speed, user-friendliness, low cost and wide accessibility which has allowed electronic
The current issue and full text archive of this journal is available at
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IMDS
109,2
224
Received 1 June 2008
Revised 15 July 2008
Accepted 21 August 2008
Industrial Management & Data
Systems
Vol. 109 No. 2, 2009
pp. 224-244
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570910930118
commerce (e-commerce) to be increasingly diffused globally, bringing countries
together into a global networked economy (Gibbs and Kraemer, 2004).
The continuous and growing interest in ICT adoption is also attributed to the
exponential growth in the number of internet users worldwide, with a bigger increase
reported from users in developing countries especially in the Asia Pacific as compared
to the USA and the European regions (International Telecommunication Union, http://
itu.int/ITU-D/ict/statistics). Specifically, it has been discovered that countries with
higher GDP per capita, literacy rate, well-established telecommunication infrastructure
and political stability will enjoy higher dispersion of internet. That is the reason why
advanced economies such as Hong Kong, Singapore, South Korea, and Taiwan lead
Asia in internet development, followed by countries like Malaysia, Brunei, and
Thailand (Hao and Chow, 2004).
In Malaysia, for instance, it has been reported in the Malaysian Communications
and Multimedia Commission’s web site (www.mcmc.gov.my) that the penetration of
internet in 2007 is about half the size of the population (47.8 percent of 28,294,120
people) as opposed to only 3,700,000 users in 2000 (International Telecommunication
Unit, www.itu.int). The strong growth is due to the initiatives undertaken by the
Malaysian government. For example, the Seventh Economy Plan (1996-2000) serves as
testament to the country’s serious attention on the necessary development of
infrastructure and environment of ICT so as to ensure that they are in place to enable
the country to move rapidly into the information age. In fact, investment in ICT in
Malaysia has expanded at a rate of 9.2 percent per annum from RM 3.8 billion in 1995
to RM 5.9 billion in 2000 (Economic Planning Unit, 2001). Such efforts have been
continued and expanded to the small and medium enterprises (SMEs) in the Ninth
Malaysian Plan (2006-2010) where various funds have been made available for ICT
development in these enterprises.
In addition, the National Information Technology Agenda was formulated in 1996
to help provide an ICT framework to develop Malaysia into an information and
knowledge-based society by 2020 (www.nitc.org.my/index.shtml). The ICT industry
received further boost when the Multimedia Super Corridor Malaysia (MSC Malaysia)
project was conceptualized in 1996 to expedite the transformation process [for more
information, see Chong (2006)]. The MSC Malaysia offers an ideal growth environment
for the ICT SMEs to transform themselves into world class companies through various
incentives provided under the Promotion of Investment Act 1986. As of March 2008,
there are 2,006 MSC Malaysia-status companies, in which more than 70 percent of them
are locally-owned, largely SMEs (MSC Malaysia web site, www.mscmalaysia.my).
It can thus be concluded that in many countries, the roles played by the government
and the growing number of internet users have far-fetched implications to SMEs
contemplating on using internet-based ICT to reach larger pool of potential customers
locally and worldwide. While several authors have identified various factors affecting
the adoption or non-adoption of web sites and e-commerce, there remain gaps to be
addressed. It has been reported that studies conducted so far provide narrow focus on
SMEs adopting e-commerce and that they are all fragmented. Tan et al. (2009) in their
analysis of prior studies concluded that while diffusion of innovation (DOI) remains a
popular model in investigating the behavior of users in adopting new technological
innovation, there are tendencies for researchers to combine the constructs of different
models, such as the theory of reasoned action, theory of planned behavior, and the
Internet-based
ICT adoption
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