SMEs Fail to Achieve Growth due to Slow Adoption of ICT

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By Amina Faki

Information Communication Technology (ICT) and especially, the use of internet and Web service are changing the traditional way for companies to do business.

With the progressive globalization of the economy, ICT are among the most versatile tools to allow small and medium enterprises (SMEs) to compete profitably in larger and more dynamic markets.

The advent of ICT offers considerable opportunities for large and small firms across all avenues to expand their customer base, enter new products and rationalize their business by competing in the global economies.

SMEs have generally been slow to adopting and evaluating ICT, they have failed to reach the levels of adoption required to realize the benefits associated with it during formative stages of the enterprises. Many SMEs are unaware of the potential of ICT in enhancing their business operations which they consider not applicable to the products and services.

Small and Medium Enterprises (SMEs) play a very important role in the economy in terms of wealth creation and provision of employment opportunities. However, competition from more established firms poses a great challenge to their existence. With the adoption of Information and Communication Technologies (ICTs), it is envisaged that they can compete more effectively and efficiently in both domestic and international markets.

There is the need for SMEs in Kenya, to adopt ICT. The perceived benefits of ICT have motivated a few SMEs to adopt and invest in it.

ICT is a major source of competitive advantage as well as a cost effective way for SMEs to reach customers globally and compete with their counterparts who are global.

Below are some of the factors that lead to slow adoption of ICT in SMEs in the country;

Lack of awareness contains numerous factors that hinder the adoption of ICT by SMEs. This includes; uncertainty of technology benefits, lack of guidance and unfamiliarity of technologies.

Cost is a critical element in the adoption of ICT. Cost is mostly related to technological factors such as training, maintenance costs, information systems and software.

Lack of technology environment including lack of critical mass use, unavailability of ideal technology, and e-business infrastructure are major external hindrances obstructing technology adoption and use by SMEs.

Among other barriers that lead to the slow adoption of ICT are external pressures ie the requirements by trading partners and competitiveness from other players, organizational readiness( most organizations are not ready to embrace the change that comes with technology.), the perceived benefits of technology, and inability to acquire complex opportunities.

The majority of SMEs in the country find it difficult to cope with the required speed of change of technology.

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Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory