Determinants for South African SMEs to Adopt Broadband Internet Technologies

Abstract Internet based technology is globally endorsed as a stimulant for small business success (Chibelushi and Costello, 2009). For the last twenty years, the Small Medium Enterprise (SME) business segment is seen as a key driver to social and economic growth in South Africa (Manuel, 1995). The purpose of the research was to identify and rank all socio‐psychological influences on South African SMEs at macro (institutional), meso (industrial) and micro (individual) levels to adopt and use broadband based internet. The Technology‐Organisational‐Environmental (TOE) model proposed by Tornatzky and Fleischer (1990) was augmented with the Reasoned Action Approach (RAA) (Fishbein and Ajzen, 2011) to ensure reasonable inter‐relatedness and defragmentation of the various socio‐psychological items, including environmental, industry and technology level influences. Exploratory factor analysis was used to establish specific factors influencing broadband adoption amongst SMEs in South Africa. Three levels of statistical testing were conducted: testing strength of all items using exploratory factor analysis, testing factor impact on independent variables (business activity and turnover) through one‐way ANOVA and predictability testing using logistic regression analysis. This was done across multiple SME sectors and business sizes. Purposive sampling was used, with a target of both users and non‐users of broadband technologies, and a response rate of 14.1% (211 valid observations) was obtained across both sets. From the ANOVA analysis, there was a significant impact of technology drivers on retail businesses, and higher impact on manufacturing than on transport. It was found that organisational elements related significantly differently across varying sizes of businesses, especially between retail versus manufacturing entities. Finally, for the environmental factor, supplier and customer influence on SMEs weighed in relatively higher than competitor pressure. It is recommended that to enhance business climate for broadband adoption, key operator tactics for supply need to be defined and market conditions adjusted to influence demand. Ultimately, the paper suggests that an ecosystem of elements that must be managed to assist in widespread adoption, over and above technology readiness and possibilities in using broadband based ICT for SME growth.