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SMEs in South Africa 123
tions and operate on an international scale. They also see e-commerce as a tool for
providing cost effective ways for SMEs to market their business, launch new
products, improve communications, gather information and identify potential
business partners.
South Africa, as a developing country, faces many problems such as high
unemployment, low levels of working skills, poverty and rampant crime. The
encouragement of the development of SMEs might help to elevate these problems
and improve the levels of skills in the country. This should contribute towards
economic growth and assist in reducing poverty and unemployment levels in
general. Information and communication skills have been proposed as means of
increasing the productivity levels of SME’s (Harrison et al., 1997). Yet the
perception, implementation and the utilization of the Internet by South African
SMEs is still relatively unknown (Cloete, 1999).
Electronic business, as an area of research, is still evolving with many
researchers disagreeing to the benefits or boundaries. Many benefits from the
utilization of e-commerce for SMEs are suggested (Davies, 2002), however its
adoption seems to be low for a variety of reasons that are reported in this paper.
Research performed on SMEs since the dotcom crash in 2000, indicates that
perceptions and attitudes towards e-commerce have changed to quite an extent and
people often look at potential benefits in a more pessimistic manner (Courtney &
Finch, 2001).
The Internet and SMEs
Many SMEs are forced into using electronic business due to their dominant
clients forcing them to adopt or depart when the client implements an electronic
purchasing system. The result is that SMEs that do not keep up with the e-evolution
are in danger of being left out of tenders, particularly where larger corporations have
electronic tender processes that might be attractive to SMEs.
Poon and Swatman (1997) identified short-term and long-term benefits for
companies using e-commerce. Short-term benefits should be realized within
months whereas long-term benefits may take longer and are normally fairly
unpredictable. Their research showed that SMEs are not reaping significant shortterm
benefits from e-commerce and for those that did, the benefits were marginal
and inconsistent. They identified long-term benefits as being the key motive for
ongoing Internet activities.
Chan and Swatman (2001) found that the Internet as an e-commerce medium
for EDI transactions is cheaper than traditional EDI, even after all the costs of
implementing an Internet EDI solution was taken into account. They suggest the
following Internet based B2B application as alternatives to traditional EDI:
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