Challenges of ICT Adoption by South African SMEs: A study of Manufacturing and Logistics Firms

Objectives
This paper investigates the impact of ICT adoption and use among South African SMEs in the
manufacturing and logistics sectors. South Africa is an emerging economy as seen by its recent
admission to the BRICS group of countries. The manufacturing sector provides a locus for stimulating
growth and use of emerging technologies in other sectors. The logistics sector is integral to the
movement of goods and supply chain linkages. The study identifies key ICT attributes and explores
how they influence adoption and use in Johannesburg.
Prior Work
The study draws on the Framework of e-commerce technology adoption by SMEs (Rashid and AlQirim, 2001) as an overarching framework along with influences from other key approaches; the
diffusion of innovations (Rogers, 2003), Technology Acceptance Model (Davis, 1989) and the
Resource Based View (Barney et al, 2011) that help us to understand ICT adoption and use in SMEs
Approach
The study uses both quantitative and qualitative research techniques. A total of 130 firms were
surveyed (66 in logistics and 64 manufacturing) and 52 interviews conducted (46 owner-managers
and the rest representing institutional representatives, academia and consultancy).
Results
Results show that the power of the supply chain drives growth and use of ICT (supply chain slavery)
in addition to internally driven firms, individuals and owner-managers. Also, most SMEs studied have
a high ICT skills shortage and rely on outside ICT vendors and consultants for their needs.
Interestingly, cost of ICTs was not seen as a constraint to ICT adoption. There is evidence that firms
in the logistics sector have to adopt government specified ICTs before trading (adoption through
policy).
Implications
The RBV approach infers that the key differentiators for ICT deployment in firms reside within the
internal context of an organisation. Because of the new technologies and prospects of external
knowledge transfers, the study shows that capabilities that are important to the organisation may
reside (externalised) outside the firm e.g. an effective ICT consultant or ICT vendor may play a role in
matching firm ICT needs and organisational objectives. As an emerging economy, South Africa is
primarily concerned with wider economic empowerment of the native population taking into account
its apartheid past. Notwithstanding the historical past (particularly race and gender disparities), this
study proposes the need to address sectoral challenges that foster competitiveness (targeted training,
funding, policy and empowerment initiatives).
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Value
The study contributes to the broadening of our understanding of the impact of ICT adoption and use in
SMEs especially from a firm, sector and developing country perspective. It also avails knowledge that
is of use to owner-managers, researchers and policy-makers by providing insights on the two sectors
and SMEs in general. Additionally, it provides current and up to date assessment of the impact of ICT
on SMEs in South Africa. Critically, this calls for consolidating on existing knowledge and extend
research to shed light on the transfer of specialised ICT knowledge to SMEs.