The Investigation of E-Marketplace Adoption by Small Medium Enterprises Using Individual-Technology-Organization-Environment (ITOE) Framework: A Case Study in Yogyakarta Province Indonesia

Abstract

Background: Small and medium enterprises (SMEs) in Indonesia have been encouraged by the Indonesian government to adopt e-marketplace platforms. However, the rate of e-marketplace adoption is shown to be low. In an effort to address the underlying issues this paper reports on the application of a modified form of the Technology-Environment-Organization framework that includes attributes of individual SME owner-managers. The application of the Individual-Technology-Organization-Environment (ITOE) framework is considered necessary given the overwhelming number of micro-SMEs that have one owner-manager and employ less than ten employees. The study takes a case study approach by studying e-marketplace adoption of SMEs in the province of Yogyakarta, a major city of Indonesia. Method: Using a survey instrument, data were collected using randomized sampling from SMEs in Yogyakarta and analyzed using the partial least squares method. Results: The results confirm the validity of the ITOE framework to this study context. The results also indicate that the Individual construct positively affects the organization construct in predicting e-marketplace adoption. The suitability of the ITOE framework for further application to other locations in Indonesia when investigating e-marketplace adoption by SMEs is validated. Conclusion: This study validates use of the ITOE framework in investigating e-marketplace adoption by SMEs in Indonesia. The ITOE framework can be operationalized for e-marketplace adoption, particularly when the research context has relevant factors to the individual context namely, where a predominance of micro-SMEs exists. Future research is to conduct a full-scale study of e-marketplace adoption in Indonesia.