E-Services Adoption: Processes by Firms in Developing Nations: Volume 23A

This chapter serves to recognize the uniqueness of the moment; the number of new users of e-services worldwide will double during 2015–2108 (moving from 2 billion users mostly living in the developed nations to an additional 2 billion users mostly living in developing nations). This radical embrace of new e-service technologies will substantially improve the quality of lives for most residents globally. A profound happening occurring now! The new technologies combine rapidly delivering of a multitude of services at extremely low cost to adopters now having extremely low incomes relative to residents living in developed nations. Adoption of e-service among residents in developing nations ends the debate as to whether or not marketing to the “bottom of the pyramid” is possible. The more relevant issues focus on describing and explaining e-service adoption processes in developing nations. How are these processes being implemented? What obstacles had to be overcome in achieving these adoptions? How were these obstacles overcome? Read this volume for research providing useful answers to these questions.

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.

Citizens are substantial stakeholders in every e-government system, thus their willingness to use and ability to access the system are critical. Unequal access and information and communication technology usage, which is known as digital divide, however has been identified as one of the major obstacles to the implementation of e-government system. As digital divide inhibits citizen’s acceptance to e-government, it should be overcome despite the lack of deep theoretical understanding on this issue. This research aimed to investigate the digital divide and its direct impact on e-government system success of local governments in Indonesia as well as indirect impact through the mediation role of trust. In order to get a comprehensive understanding of digital divide, this study introduced a new type of digital divide, the innovativeness divide.

The research problems were approached by applying two-stage sequential mixed method research approach comprising of both qualitative and quantitative studies. In the first phase, an initial research model was proposed based on a literature review. Semi-structured interview with 12 users of e-government systems was then conducted to explore and enhance this initial research model. Data collected in this phase were analyzed with a two-stage content analysis approach and the initial model was then amended based on the findings. As a result, a comprehensive research model with 16 hypotheses was proposed for examination in the second phase.

In the second phase, quantitative method was applied. A questionnaire was developed based on findings in the first phase. A pilot study was conducted to refine the questionnaire, which was then distributed in a national survey resulting in 237 useable responses. Data collected in this phase were analyzed using Partial Least Square based Structural Equation Modeling.

The results of quantitative analysis confirmed 13 hypotheses. All direct influences of the variables of digital divide on e-government system success were supported. The mediating effects of trust in e-government in the relationship between capability divide and e-government system success as well as in the relationship between innovativeness divide and e-government system success were supported, but was rejected in the relationship between access divide and e-government system success. Furthermore, the results supported the moderating effects of demographic variables of age, residential place, and education.

This research has both theoretical and practical contributions. The study contributes to the developments of literature on digital divide and e-government by providing a more comprehensive framework, and also to the implementation of e-government by local governments and the improvement of e-government Readiness Index of Indonesia.