COMPETITIVE ADVANTAGES THROUGH IT INNOVATION ADOPTION BY SMES

Abstract

Purpose—This paper seeks to explain the impact of IT innovation on competitive advantage; the barriers and the benefits companies gain from adopting and using these innovations and propose a model with which it is possible to measure determinants of IT innovation adoption among SMEs.Design/methodology/approach—This paper presents conceptual consideration on the role of SMEs in the Malaysian economy and the effect of government policy in encouraging companies to adopt IT innovation. The proposed research framework will be empirically validated using survey data. This study is an ongoing research, in the existing stage a theoretical argument is developed and methodology is in the process of being tested through regression analysis.Findings—Conclusions are drawn on the status of Malaysian SMEs to adopt IT innovation. We added attitude and self-efficacy to the Innovation Diffusion Theory to suit it to the individual situation. Therefore a novel approach is needed in order to study and understand it.Research limitations/implications—The paper represents work in progress.Practical implications – This paper present the theoretical framework for further study of IT innovation adoption among Malaysia SMEs.Originality/Value—The Information Technology concept is considered a powerful competitive weapon in the modern economy. This study used Innovation Diffusion Theory as the base theory, and added attitude and self efficacy as determinants to measure the individual’s perception toward innovation adoption. Individual self-efficacy and attitude toward innovation adoption shape beliefs and perceptions toward innovation, leading them to adopt or reject an innovation. Adding these factors to Innovation Diffusion Theory will narrow the breadth of the theory and possibilities to frame a single study which allows examination of the individual and technological dimension toward technology adoption.Keywords: IT innovation adoption, competitive advantage, Innovation Diffusion Theory, SMEs, Malaysia.Research type: conceptual paper.