ICT usage performance of small and medium enterprises and their exporting activity in Malaysia

Noor Al-Huda Abdul Karim

Abstract

The implementation of the SME Masterplan 2012-2020 for the small and medium enterprises (SMEs) is expected to raise contribution share to total exports in gross domestic product (GDP) by 2020 in Malaysia. In this regard, the role of information, communication and technologies (ICT) is inevitable. This paper has two objectives. First is to identify the types of ICT device and network used by SMEs and their levels of ICT usage. Second is to determine their levels of exporting activity. Questionnaire is a main instrument for the data collection. Respondents consist of 14 SMEs. Sample size was determined after the discussion with the staff of SME Corp. Malaysia in the head office in Kuala Lumpur in this year, 2018. Majority of SMEs are from Selangor, followed by Perak and Kedah. Tablets/smartphones are the most popular types of ICT device among the respondent SMEs. In general, most respondents have only a moderate level of ICT usage in their business operations. Meanwhile, their level of exporting activity is very low. Ignoring this issue would hinder the achievement of economic growth. Therefore, even though this study is rather small, it provides a foundation of knowledge for further research on ICT usage performance of SMEs with the aim of increasing their level of exports in future

References

Ashrafi, R. & Murtaza, M. (2008). Use and impact of ICT on SMEs in Oman. The Electronic Journal Information Systems Evaluation, 11(3), 125-138.

Bassant, R., Commander, S., Harrison, R. & Menezes-Filho, N. (2006). ICT adoption and productivity in developing countries: New firm level evidence from Brazil and India. IZA Discussion Paper No. 2294, September 2006, 1- 46.

Bayo-Moriones, A., Billon, M., & Lera-Lopez, F. (2013). Perceived performance effects of ICT in manufacturing SMEs. Industrial Management & Data Systems, 113(1), 117-135. DOI: 10.1108/02635571311289700.

Beley S.D. & Bhatarkar, S.P. (2013). The role of information technology in small and medium sized business. International Journal of Scientific and Research Publications, 3(2), 1-4.

Bharadwaj, A.S., Bharadwaj, S.G. & Konsynski, B.R. (1999). Information technology effects on firm performance as measured by Tobin's q. Management Science, 45(7), 1008 -1024.

Bianchi, C. & Mathews, S.W. (2013). The role of the internet on export market growth: an empirical study in Latin America. Strategic Management in Latin America 2013, Mexico City, Mexico. https://eprints.qut.edu.au/56585/

BNM (Bank Negara Malaysia) (2016). Bank Negara Malaysia Annual Report 2015. BNM: Kuala Lumpur.

Cainelli, G., Evangelista, R. & Savona, M. (2004). The impact of innovation on economic performance in services. The Service Industries Journal, 24(1), 116-130.

Consoli, D. (2012). Literature analysis on determinant factors and the impact of ICT in SMEs. Procedia – Social and Behavioral Sciences, 62, 93-97. DOI: 10.1016/j.sbspro.2012.09.016.

Ghalandari, K. (2013). The effect of information and communication technology on export performance of Iranian firms. Research Journal of Applied Sciences, Engineering and Technology, 5(17), 4367-4372.

Gjini, K. (2014). Small and medium sized enterprises; growth factors. European Scientific Journal 1(Special, February), 1857-7881.

Hagsten, E. & Kotnik, P. (2017). ICT as facilitator of internationalisation in small and medium-sized firms. Small Business Economics, 48(2), 431-446. DOI: 10.1007/s11187-016-9781-2.

Lages, L. F. & Montgomery, D.B. (2004). Export performance as an antecedent of export commitment and marketing strategy adaptation: Evidence from small and medium-sized exporters. European Journal of Marketing, 38(9/10), 1186-1214.

Lau, H.C. & Lee, W.B. (2000). On a responsive supply chain information system. International Journal of Physical Distribution & Logistics Management, 30 (7), pp. 598-610.

Lucchetti, R. & Sterlacchini, A. (2004). The adoption of ICT among SMEs: Evidence from an Italian survey. Small Business Economics, 23, 151-168.

Makanyeza, C. (2015). Consumer awareness, ethnocentrism and loyalty: An integrative model. Journal of International Consumer Marketing, 27(2), 67 -183.

Makanyeza, C. & Ndlovu, A. (2016). ICT usage and its effect on export performance: Empirical evidence from small and medium enterprises in the manufacturing sector in Zimbabwe. Botswana Journal of Business, 9(1), 21-36.

Malaysia (2010) New Economic Model for Malaysia. Concluding Part. National Economic Advisory Council: Putrajaya.

Malaysia (2012a). SME Masterplan 2012-2020: Catalysing Growth and Income. National SME Development Council: Kuala Lumpur.

Malaysia (2012b). Economic Census 2011: Profile of Small and Medium Enterprises. Department of Statistics: Putrajaya.

Malaysia (2015). Eleventh Malaysia Plan 2016-2020. Government Press: Putrajaya.

Manyani, O., Hove, N., Mudzura, M. & Chiriseri, L. (2014). An Investigation into venture financing. A case study on small to medium scale enterprises in Bindura Urban, Zimbabwe. Elite Research Journal of Accounting and Business Management, 2(2), 10- 25.

Morgan-Thomas, A. & Bridgewater, S. (2004). Internet and exporting: Determinants of success in virtual export channels. International Marketing Review, 21(4/5), 393- 408.

Nduati, N. L., Ombui, K, & Kagiri, A. (2015). Factors affecting ICT adoption in small and medium enterprises in Thika Town, Kenya. European Journals of Business Management, 2(3), 395-414. SME Annual Report 2016/17. SME Corporation Malaysia. Summary SME Masterplan 2012 - 2020. SME Corporation Malaysia.

Tarut? & Gatautis, (2014). ICT impact on SMEs performance. Procedia - Social and Behavioral Sciences 110, 1218-1225. DOI: 10.1016/j.sbspro.2013.12.968.

Tambunan, T. (2009),Export-oriented small and medium industry clusters in Indonesia, Journal of Enterprising Communities: People and Places in the Global Economy, 3(1), 25-58. DOI: 10.1108/17506200910943661.