INTRODUCTION

Information and communication technology(ICT) has gained increased focus in scholarlydiscourse in research as a way to enablebusiness in a manner that is time-and-place-blind (Jones, Simmons, Pakham, Beynon-Davies & Pickemell, 2014).

Applying ICT to socio-economic development(such as development of small and medium-scale enterprises) endeavours is anopportunity that has been held with highregard by the international developmentcommunity (World Economic Forum (WEF),2010).

Definition of Key Terms

*

• Entrepreneurship is seen as the practice of starting new business

organisations in response to perceived opportunities (Sonawane,

2014).

*

• Linking the issue of ICT adoption to entrepreneurial development,

development is defined as the proactive pursuit of the objective of

moving to a state relatively better than what previously existed

(Boateng, Heeks, Molla & Hinson, 2008).

*

• Hence, entrepreneurial development could simply be defined as the

totality of the efforts of bringing positive and progressive changes in

business enterprises using ICT as a tool.

*

• Agro-based SMEs are defined as those entrepreneurial firms that are

engaged in the sourcing, production, processing (manufacturing) and

distribution (marketing) of farm produces (Goldberg, 1983).

*

• However, agro-based SMEs are often defined based on size: capital-

base (annual turnover) and number of employees (Bernaert, Poels,

Snoeck & De Barker, 2013; SMECORP, 2014).

*

• The current definition of SMEs in the country is: small enterprises are

those business firms with an annual turnover ranging from about

RM340,000 to RM17 million or comprising of between 5 and 75

employees, or both; while medium enterprises are those business

firms with an annual turnover ranging from about RM17 million to

RM56 million or comprising between 75 and 200 employees, or both

(SMECORP, 2015).

Agro-based SMEsSMECORP (2015)

•ICT

Includes any:

• facility

•System,

and

•device

that can be

employed to:

•collect

•process

•store, and

•diffuse

Information.

Njoh (2012)

Link between SME

Organisational Perception of ICT

Adoption and Usage

Manager & Employees

Perception

ICTs

+/-

There could be numerous reasons SMEs would consider using ICT in theirbusinesses. However, the adoption and use of ICT for entrepreneurialpurposes will chiefly depend on whether SME managers and employeesbelieve that using ICT in running business meets their particularentrepreneurial needs (Hoque, Saif, Albar & Bao, 2015; Taylor, 2015).

SMEs in

Malaysia

SMEs in

Malaysia

Employ

4,854,142,

which is 56.4%

of 8,460,971

in 2012

Constitute

99.2% of

645,136

businesses

27.0% of the

641,136

SMEs use

ICT

Contribute

31% to GDP

63.0% of the SMEs

use Internet

Constitute

32,188

SMEs (6.2%)

Contribute

6.6% to GDP

Growth Rate:

3.3%

Per AnnumSMECORP (2014)

LITERATURE REVIEW

Meanwhile, the objective of this paper(study) was to determine the critical factorsthat affect ICT usage among agro-basedSMEs for entrepreneurial development inMalaysia.

The literature has identified myriad offactors influencing ICT usage by SMEs inMalaysia. In order to identify those factors,this paper reviewed relevant literature thatfocused on SMEs’ ICT adoption.

Kapurubandara & Lawson (2006), Ismail, Nawi, Kamarulzaman & Abdullah (2014), Higon (2011)

External Factors:

Socio-economic Geographical Environmental Political/Legislative Market conditions Lack of financing Heavy regulatory burdens

Internal Factors:

Lack of skilled labour Low productivity Lack of managerial

capabilities Access to management &

technology Lack of effective technology

(ICT) adoption strategies

In spite of being key economic contributors in many countries, SMEssuffer from various challenges that undermine their technology usageand performance, often inherent and induced by:

*

•Managers of SMEs play a significant role in the development

and advancement of their organisation; hence, SMEs are

significantly influenced by their owners/managers (Abdullah,

Shamsuddin, Wahab & Abdul Hamid, 2012; Hilmi & Ramayah,

2009; Himi, Ramayah, Mustapha & Pawanchik, 2010; Rahman &

Ramos, 2014).

*

•Accordingly, Saleh, Caputi and Harvie (2008) found factors

related to government policies as the major factors affecting

ICT adoption and usage among Malaysian SMEs; in the same

study, it was discovered that managerial skills and labour

productivity were the least factors that affected the SMEs.

*

•Contrarily however, Hilmi and Ramayah (2009) and Hilmi, et al.

(2010) suggest that managerial creativity is a critical factor that

affects SMEs’ productivity. Those claims are consistent with

Higon (2011), Bayo-Moriones and Lera-Lopez (2007).

Cognitive

• Managers,

employees become

aware of ICT

Affective

• Managers and

employees

develop feelings

toward ICT

Behaviour

• Managers and

employees adopt

and use ICT in the

business

Through deliberate analysis of perceived benefits and feasibility...

If the feelings are favourable...

ICT adoption process is inthree stages (Petroni & Rizzi,2001). The stages are:

...which is translated into organisational willingness.

CONCEPTUAL FRAMEWORK

The UTAUT model is a unified model that was developed by Venkatesh, Morris,Davis and Davis (2003).

The model consists of four core determinants of ICT intention and usage namely,performance expectancy, effort expectancy, social influence and facilitatingconditions alongside four moderators namely, gender, age, experience andvoluntariness of use (AlAwadhi & Morris, 2008; Venkatesh, et al., 2003).

This paper performed some critical adjustments as is normally accepted inliterature (see AlAwadhi & Morris, 2008; Al-Qeisi, Dennis, Hegazy & Abbad,2015) in the model by incorporating two predictors namely, SME organisationalsize (SS) and managerial creativity and innovativeness (C&) as determinants ofICT usage alongside the four key predictors.

This paper deemed those adjustments as necessary because the literaturesuggests SME organisational size (Dholakia & Kshetri, 2004; Windrum &Berranger, 2003) and SME managers’ creativity and innovativeness (Agarwal &Prasad, 1998; Bayo-Moriones & Lera-Lopez, 2007; Higon, 2011; Rahman &Ramos, 2014; Rogers, 2003; Rosen, 2005) significantly influence organisationalpolicies and operations, which include ICT adoption and usage decisions.

.

1

Voluntariness of Use

Social Influence

experience

Managerial Creativity &

Innovativeness

Facilitating Conditions

SME (Organisational)

Size

Performance Expectancy

Age

ICT Usage

Effort Expectancy

gender

Material

&

Method

•A pre-tested and validated, four-section questionnaire, consisting of 138

items

•Originally printed in English language and translated into Malay language

•Self-administration (70% using face-to-face while 30% using drop-and-

pick methods)

•Only Section A (demographic information section) consisted of open-

ended questions; the rest of Sections B – D consisted of close-ended

questions

•Five-point Likert scale was used

Research

Instrument

•400 personnel of 43 agro-based SMEs

•Population of workers was 10,400 (SMECORP, 2014)

•Population of agro-based SMEs was 840 (SMECORP, 2014)

•The agro-based SMEs were randomly selected (Babbie, 2010)

•The SMEs’ personnel were purposively selected (Babbie, 2010;

Cochran, 1977; Sekaran, 2003)

Research

Sample

•Selangor

•Selangor was chosen because the state has the highest

concentration of SMEs in the country (Saleh & Burgess, 2009;

SMECORP, 2014)

Research

Location

High-tech-user SMEs were excluded because they offered minimalcooperation & to save resources. Low-tech-user SMEs would contributelittle information, they were also excluded.

The respondents were selected from among the bulk within the averageusage level (see Jacqueline & Barrios, 2007; Wolter, 1985).

The respondents were first contacted via telephone and the aim andnature of the research was explained to them. Thereafter, permissionfor a face-to-face questionnaire administering was sought.

After the data was sorted, four incomplete questionnaires wererejected. In addition, 10 more cases were effaced after cleaning thedata. Therefore, data collected from 383 respondents was analysedusing statistical package for social sciences (SPSS) and structuralequation modelling (SEM) software.

The Internal Consistency Reliability (ICR) or Cronbach’s alphacoefficient of the instrument ranged between α=.965 and α=.705.

RESULTS

&

DISCUSSION

S/No Variable Frequency Percentage

1 GenderMaleFemale

231152

39.7960.21

2 Age18-2930-4142-5354-65Mean = 31.05SD = 8.9

1281219935

33.432.026.09.0

3 Marital StatusMarriedSingleDivorcedWidowed

1162054715

30.353.512.33.9

S/No Variable Frequency Percentage

1 Number of Years Working<11-56-1112-1718-2324-2930-35>35Mean = 6.0SD = 5.7

5765113453931258

14.917.029.511.710.28.16.52.1

2 Educational QualificationNever been to schoolUPSRSRP/PMR/LCESPM/SPMV/MCECertificate

1121167217

2.875.484.1818.794.43

S/No Variable Frequency Percentage

1 …Educational QualificationSTPM/DiplomaBachelor’s DegreeMaster’s DegreePhD

107130102

27.9333.942.610.52

2 Monthly Income (RM)<3,0003,000-5,000>5,001

2288471

59.522.018.5

3 Employment StatusPermanent

MaleFemale

Temporary Male Female

15397

5776

61.039.0

43.156.9

S/No Construct Item Factor

Managerial Creativity and Innovativeness (C&I) 1 2

1 I have confidence in the ability of the management of

this enterprise to use ICT to gain new customers.

0.913

2 I believe the management of this enterprise is

capable to come up with new ways of doing business

independently using ICT for sales increase.

0.875

3 I have confidence in the ability of the management of

this enterprise to use ICT to earn sustained

customers’ loyalty.

0.743

4 I believe the management of this enterprise has the

ability to adopt the latest business strategies using

ICT, to sustain its competitive advantage.

0.862

5 I think the management of this enterprise is capable

to use online business platforms to sensitise

customers to purchase its products.

0.814

S/No Construct Item Factor

Performance Expectancy (PE) 1 2

1 ICT usage in this enterprise would improve my

productivity for sustaining the agro-based enterprise.

0.739

2 ICT usage increases my chances of achieving things

that are important to this enterprise for the sustaining

of this agro-based enterprise.

0.739

3 ICT usage would improve my job performance for

sustaining this agro-based enterprise.

0.717

4 ICT usage enhances my effectiveness in the business

for sustaining this agro-based enterprise.

0.685

5 ICT usage will increase the quality of output of my work

for sustaining this agro-based enterprise.

0.641

EigenValuesPercentage of Total VarianceCumulative VarianceCronbach’s Alpha

1.43137.61537.6150.905

1.48135.14672.7610.867

The researchers performed factor analysis with the principal axisfactoring method on the data to ensure good construct validity. Sincethe current study focused on a fairly large sample size (N = 838), aloading of 0.30 and above was accepted based on suggestions by Child(2006), Hair, Black, Babin, Anderson and Tatham (2006) and Normanand Streiner (1994).

However, fortunately none of the factor loading was below 0.6. Fivefactors from C&I and five factors measuring PE (see Tables 2a & 2b) witheigenvalues of 1.00 or slightly higher were extracted and all the itemswere included since they loaded above 0.30 on either of the factors.

The results of the analysis indicate C&I explained 37.615% (0.905) whilePE explained 35.146% (0.867) of the variance in ICT usage.

Collectively however, the variables can predict almost 73.0% ofvariances associated with ICT usage by the agro-based SMEs inMalaysia. These findings indicate a satisfactory degree of constructvalidity.

CONCLUSION, RECOMMENDATIONS

& REFERENCES

The critical factors that affect the ICT usage of agro-based SMEs for entrepreneurialdevelopment in Selangor, by extension, in Malaysia have been empirically determined.Prior to running the CFA, there were six critical determinants of ICT usage in theresearch framework, which were reduced to two positively significant factors, whichcollectively explain about 73.0% of the variances in the ICT usage phenomenon.

Furthermore, the emergence of the managerial creativity and innovativeness (C&I)construct as the leading critical factor determining ICT usage implies that SMEsmanagers/owners exert tremendous influence on the progress or otherwise of SMEs.

Moreover, the second most important factor is performance expectancy (PE). This hasbeen found to have determined ICT usage and adoption decisions in copious paststudies (see AlAwadhi & Morris, 2008; Venkatesh, et al., 2003). Although in thepresent study PE was ranked second factor, in Venkatesh, et al. (2003) it wasconsistently found to predict behavioural intention and usage behaviour with high ICRof not less than 90.

Concisely, the results of this study imply that majority agro-based SMEs’ personnelbelieve that for firms to achieve the benefits of using ICT in business as theyexpected, it is imperative for them to have creative and innovative managers (as a pre-condition).

The findings are consistent with Agarwal and Prasad (1998), Rosen (2005) andVenkatesh, et al. (2003).

Although much research has been carried out to investigate many ofthe key factors that affect ICT adoption by SMEs, there is a need toexplore whether such factors influence SMEs decision to useemerging technologies such as free and open sources software(FOSS), cloud computing and enterprise resource planning (ERP) forthe advancement of their enterprises.

This paper recommends that conducting such studies is importantbased on the fact that SMEs often seek to adopt and use cost-effective ICT solutions to boost their businesses. The UTAUT modelcan be applied to such future research to achieve a betterunderstanding of ICT usage phenomenon among SMEs.

In addition, future research should focus more attention on howSMEs can use social networking sites (SNS) (see Taylor, 2015) suchas Facebook, Twitter and Instagram, and instant messaging (IM)applications such as WhatsApp and WeChat intensively in business.

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NB: The images that were used in these PowerPoint slides were obtained from Google images: http://www.google.com/search?q=

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