The Perception of Barriers to E-commerce Adoption by SMEs: A Comparison of Three Countries

Electronic commerce (e-commerce) has been utilised as a vehicle to rapidly transform the world into an information society. Yet despite the proven potential of e-commerce in the small business sector, studies have shown that it is the larger businesses that have reaped the benefits, with small/medium enterprise (SME) adoption remaining relatively low by comparison. This slow growth of e-commerce adoption by SMEs has been attributed to various adoption barriers that are faced by small business owners/ managers. While many recent studies have begun examining the relationship between the perceptions of adoption barriers in developed economies, the relationship between the perceptions of these barriers has not been fully examined in developing economies. This chapter firstly presents the authors’ understanding of what defines an SME and then highlights our current understanding of the similarities and differences in barriers to e-commerce adoption by SMEs in developed and developing economies. It then describes and discusses a study which examines differences in the groupings and priorities, of barriers to adoption of e-commerce as perceived by SME owner/managers in a developing economy (Indonesia) and two developed economies (Sweden and Australia). The chapter finally describes the implications of these findings for practitioners and researchers. DOI: 10.4018/978-1-61520-627-8.ch008

[1]  Anders Lundström,et al.  SME perspectives on business support services: The role of company size, industry and location , 2005 .

[2]  James A. Wolff,et al.  Small‐Firm Performance: Modeling the Role of Product and Process Improvements , 2006 .

[3]  Eran Feitelson,et al.  Factors Affecting Environmental Behavior in Micro-enterprises , 2007 .

[4]  Rodney C. Runyan,et al.  Getting customers downtown: the role of branding in achieving success for central business districts , 2006 .

[5]  Jung P. Shim,et al.  Factors influencing corporate web site adoption: a time-based assessment , 2001, Inf. Manag..

[6]  Virpi Kristiina Tuunainen,et al.  Opportunities of effective integration of EDI for small businesses in the automotive industry , 1998, Inf. Manag..

[7]  J. Burn,et al.  Global strategies for SMe‐business: applying the SMALL framework , 2001 .

[8]  Darren B. Meister,et al.  Small Business Growth and Internal Transparency: The Role of Information Systems , 2004, MIS Q..

[9]  Elif Bascavusoglu-Moreau,et al.  Impact of SME policies on innovation capabilities: The Turkish case , 2011 .

[10]  Hernan Riquelme,et al.  Commercial Internet adoption in China: comparing the experience of small, medium and large businesses , 2002, Internet Res..

[11]  Michael Quayle E‐commerce: the challenge for UK SMEs in the twenty‐first century , 2002 .

[12]  Paul B. Cragg,et al.  Small-Firm Computing: Motivators and Inhibitors , 1993, MIS Q..

[13]  Norhayati Abdul Mukti Barriers to Putting Businesses on the Internet in Malaysia , 2000 .

[14]  Mira Kartiwi,et al.  Electronic Commerce Adoption Barriers in Small to Medium-Sized Enterprises (SMEs) in Developed and Developing Countries: A Cross-Country Comparison , 2007, J. Electron. Commer. Organ..

[15]  Nabeel Al-Qirim,et al.  Personas of E-Commerce Adoption in Small Businesses in New Zealand , 2006, J. Electron. Commer. Organ..

[16]  P. Thompson,et al.  SME Characteristics and the Use of the Internet to Expand the Scale and Geographic Scope of Sales: Evidence from the United Kingdom , 2011 .

[17]  William H. DeLone Determinants of Success for Computer Usage in Small Business , 1988, MIS Q..

[18]  N. Archer,et al.  Barriers to the adoption of online supply chain solutions in small and medium enterprises , 2008 .

[19]  N. Joglekar,et al.  Operational Hedging Strategies to Overcome Financial Constraints During Clean Technology Start-Up and Growth , 2010 .

[20]  Carla Carnaghan,et al.  E-Commerce and Tax Planning: Canadian Experiences , 2004 .

[21]  Archie L. Dick,et al.  The use of ICTs in Namibia's SME sector to access business information services , 2008, Electron. Libr..

[22]  Kurt Matzler,et al.  The Relationship between Transformational Leadership, Product Innovation and Performancein SMEs , 2008 .

[23]  Kalle Lyytinen,et al.  Contours of diffusion of electronic data interchange in Finland: Overcoming technological barriers and collaborating to make it happen , 1998, J. Strateg. Inf. Syst..

[24]  Tommy Gärling,et al.  Influence of Expert Advice on Expansion Goals of Small Businesses in Rural Sweden , 2003 .

[25]  F. Chirico The Creation, Sharing and Transfer of Knowledge in Family Business , 2008 .

[26]  Louis Raymond,et al.  Determinants of Web site implementation in small businesses , 2001, Internet Res..

[27]  William W. Lawrence,et al.  Small Business Operations Strategy: Aligning Priorities and Resources , 2007 .

[28]  I. Fillis,et al.  E-business Development , 2005 .

[29]  LuAnn Ricketts Gaskill,et al.  Impact of Operational Planning on Small Business Retail Performance , 1994 .

[30]  Lorna McKee,et al.  The Cultural Paradigm of the Smaller Firm , 2004 .

[31]  Igor Filatotchev,et al.  The Effects of Information Disclosure and Board Independence on IPO Discount** , 2008 .

[32]  Cheryl Dennis,et al.  Networking for marketing advantage , 2000 .

[33]  Nabeel Al,et al.  Electronic commerce in small to medium-sized enterprises: frameworks, issues and implications , 2003 .

[34]  G. Chakraborty,et al.  Is Informal Planning the Key to the Success of the Inc. 500 , 2007 .

[35]  A. Scupola,et al.  The Adoption of Internet Commerce by SMEs in the South of Italy: An Environmental, Technological and Organizational Perspective , 2003 .

[36]  Ekrem Tatoglu,et al.  An analysis of the factors affecting the adoption of electronic commerce by SMEs , 2005 .

[37]  R. Hinson,et al.  Strategic value and electronic commerce adoption among small and medium‐sized enterprises in a transitional economy , 2008 .

[38]  Alistair R. Anderson,et al.  Scottish Entrepreneurial Networks in the International Context , 2002 .

[39]  T. S. Robertson,et al.  Competitive Effects on Technology Diffusion , 1986 .

[40]  Kenneth L. Kraemer,et al.  China IT Report , 2001, Electron. J. Inf. Syst. Dev. Ctries..

[41]  Louis Raymond,et al.  Information technology: Threats and opportunities for small and medium-sized enterprises , 1993 .

[42]  Michael Wade,et al.  Does e‐Business Matter to SMEs? A Comparison of the Financial Impacts of Internet Business Solutions on European and North American SMEs , 2007 .

[43]  Chalermsak Lertwongsatien,et al.  Factors Influencing E-commerce Adoption in Small and Medium Businesses : An Empirical Study in Thailand , 2022 .

[44]  David J. Storey,et al.  Management Training and Small Firm Performance: Why is the Link So Weak? , 1996 .

[45]  Robert Gibbs,et al.  Going Away to College and Wider Urban Job Opportunities Take Highly Educated Youth Away from Rural Areas. , 1995 .

[46]  Richard Heeks,et al.  Exploring E-Commerce Benefits for Businesses in a Developing Country , 2007, Inf. Soc..

[47]  Martyn Warren,et al.  Farmers online: drivers and impediments in adoption of Internet in UK agricultural businesses , 2004 .

[48]  Annette Mills,et al.  A model of Internet adoption by SMEs , 2001, Inf. Manag..

[49]  Eric Cloete,et al.  Small Businesses’ Acceptance and Adoption of e‐Commerce in the Western‐Cape Province of South‐Africa , 2002, Electron. J. Inf. Syst. Dev. Ctries..

[50]  Eugene F. Brigham,et al.  Cost of Capital to the Small Firm , 1967 .

[51]  H. Lundgren,et al.  Internet adoption barriers for small firms in The Netherlands , 2000 .

[52]  M. Quaddus,et al.  An Investigation into the Factors Influencing the Adoption of B2B Trading Exchanges in Small Businesses in Western Australia , 2005, PACIS.

[53]  David Gefen,et al.  On the Need to Include National Culture as a Central Issue in E-Commerce Trust Beliefs , 2006, J. Glob. Inf. Manag..

[54]  K. Mole Tacit knowledge, heuristics, consistency and error signals: How do business advisers diagnose their SME clients? , 2007 .

[55]  Markus Will,et al.  Talking about the future within an SME , 2008 .

[56]  Athanasios Hadjimanolis,et al.  Barriers to innovation for SMEs in a small less developed country (Cyprus) , 1999 .

[57]  R. MacGregor,et al.  A basic model of electronic commerce adoption barriers: A study of regional small businesses in Sweden and Australia , 2005 .

[58]  H. Barry,et al.  SMEs and electronic commerce: a departure from the traditional prioritisation of training? , 2002 .

[59]  T. Holmes,et al.  An exploratory comparison of Internet use by small wood products manufacturers in the North Adirondack Region of New York and the State of Louisiana , 2004 .

[60]  Chung-Shing Lee,et al.  An analytical framework for evaluating e-commerce business models and strategies , 2001, Internet Res..

[61]  Mira Kartiwi Case Studies of E-commerce Adoption in Indonesian SMEs: The Evaluation of Strategic Use , 2006, Australas. J. Inf. Syst..

[62]  Louis Raymond,et al.  Short‐term effects of benchmarking on the manufacturing practices and performance of SMEs , 2004 .

[63]  Donald L. Amoroso,et al.  E-Commerce Infrastructure Success Factors for Small Companies in Developing Economies , 2004, Electron. Commer. Res..

[64]  Nerys Fuller-Love,et al.  Management Development in Small Firms , 2006 .

[65]  Harry Matlay,et al.  "Blanket" approaches to promoting ICT in small firms: some lessons from the DTI ladder adoption model in the UK , 2001, Internet Res..

[66]  Nancy J. Miller,et al.  The Importance of Community Values in Small Business Strategy Formation: Evidence from Rural Iowa [*] , 2000 .

[67]  Jaideep Motwani,et al.  Understanding Adoption of Internet Technologies Among SMEs , 2005 .

[68]  M. Kyobe The Impact of Entrepreneur Behaviors on the Quality of e-Commerce Security: A Comparison of Urban and Rural Findings , 2008 .

[69]  Stephen K. Callaway,et al.  More bang for your buck: Small firms and the importance of aligned information technology capabilities and strategic flexibility , 2007 .

[70]  Janet Toland,et al.  Electronic Commerce for the South Pacific: A Review of E-Readiness , 2004, Electron. Commer. Res..

[71]  M. Kapurubandara,et al.  Barriers to adopting ICT and e-commerce with SMEs in developing countries : an exploratory study in Sri Lanka , 2006 .

[72]  David Tucker,et al.  Implementing Electronic Commerce in SMEs: Process and Barriers , 2004, J. Electron. Commer. Organ..

[73]  Abby Ghobadian,et al.  Short- and Long-Term Performance in Manufacturing Smes: Different Targets, Different Drivers , 2004 .

[74]  Izak Benbasat,et al.  Electronic Data Interchange and Small Organizations: Adoption and Impact of Technology , 1995, MIS Q..

[75]  Michael Taylor,et al.  SMEs and e‐business , 2004 .

[76]  Christo Boshoff,et al.  The influence of the owner-manager of small tourism businesses on the success of internet marketing , 2007 .