EMERGE Research Seminar, Rita Rahayu

Tue, 08 Oct 2013 11:17:00 BST

Rita Rahayu, a first year PGR student at the University of Huddersfield, presented her first year progression report to the EMERGE group about her research titled “Electronic-Commerce Adoption by Small and Medium Sized Enterprises in Indonesia: An Empirical Study of the Influencing Factors and the Impact on SME Performance”

The objectives of this research are to investigate the factors that influence Indonesian SMEs in adoption of e-commerce, and to investigate the impact of this adoption on Indonesian SMEs performance. This research is motivated by the slow rate of e-commerce adoption by SMEs in general and Indonesian SMEs in particular.

Indonesia is an archipelago consisting of more than 17,000 islands, with more than 52,000 SMEs dispersed over these islands. Geographically, Indonesian SMEs will benefit if they use e-commerce application on their business activities.  This is because e-commerce allows businesses to market and advertise their products electronically to all regions. However, the Indonesian SMEs are still, in fact, lagging behind in terms of the e-commerce adoption. Based on a survey of The International Communication Union (2007), several ICT indicators in Indonesia are still below the average in Asia and the world. The Nielson Global online survey (2008) also reported that Indonesia lies in bottom position (number 13 out of 14 countries) in Asia Pacific in terms of its online transactions. This condition raises the question of, what factors affect the Indonesian SMEs in adoption of e-commerce?.

Actually, there are wide ranges of e-commerce application that can be used by SMEs, starting from the simple form to the advanced form. The wider the scope of e-commerce used in SMEs, the more the benefits that will be realised by SMEs. The benefits gathered by businesses will affect the performance of SMEs. Hence, in this study, the impact of e-commerce adoption on SMEs performance is also investigated.

The survey method, using the questionnaire as an instrument, will be applied in this study. This research contributes to the IS literature, especially in e-commerce adoption by SMEs in developing countries. The result of this research can be used as an input for the Indonesian government in making policies related to the development of SMEs.

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