Digital Technology Adoption in SMEs: What Technological, Environmental and Organizational Factors Influence in Emerging Countries?

Abstract

The research aims to explore the technological, environmental and organizational factors that influence digital technology adoption in the small and medium enterprises (SMEs) sector in developing countries. A conceptual framework is proposed that combines the technology-organization-environment (TOE) framework and diffusion of innovation (DOI) theory to explore the determinants of digital technology, for example, information and communication technology (ICT) applicability in SMEs. In addition, this study identifies the major barriers to implementing ICT in the SMEs sector. A purposive 535 sample was accumulated from higher- and middle-level managers of SMEs firms through a structured questionnaire. Data and hypotheses were analyzed using partial least squares-structural equation modelling. Results show that relative advantage, complexity, observability, perceived cost, top management support, innovativeness of top management, competitive pressure and government support have significant determinants of ICT adoption in SMEs. Besides, compatibility, perceived trialability and organization readiness have not significantly influenced to use of ICT in SMEs. This research has crucial implications for practising managers, policymakers and SMEs business owners. To the best of the authors’ knowledge, this study is perhaps one of the first empirical surveys that widely provides a theoretical framework regarding ICT adoption in SMEs in Bangladesh.