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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: Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
124 Cloete • EDI formatted documents over the Internet (the use of FTP or e-mail applications to place the EDI messages into formatted documents and transmit them to the intended recipients) • XML EDI or XML document exchange (the latest development in EDI translation, which aims to lower the barriers to e-business for SMEs). • Web-based EDI (use of a web based form or intelligent interactive form to exchange business over the Internet). Due to the ownership and decision making power of SMEs being held by one or two people, adoption of e-commerce into their organization is heavily reliant on these people’s acceptance of the technology. The following factors are primary to the acceptance of e-commerce (Perry et al., 2001): • Usefulness - The individual must be convinced of the relevant advantage of using e-commerce. Embracing e-commerce should be perceived as easier, faster, and cheaper than the current manual processes of doing business. Ecommerce would need to be understood and considered to be useful by the individual. • Intention - The individual must intend embracing e-commerce. They must have a positive attitude towards it. A person that views e-commerce as a tool that has no potential role in what they are doing is unlikely to accept the potential of e-commerce. • Ease of Use - The individual must be comfortable with the use of technology. A person that is frightened to embrace technology will not be willing to accept e-commerce as a trading tool. If the appropriate skills and understanding of the technology are in place, then the use of e-commerce will be easier, thus making its acceptance more likely. • External Variables - These are the factors affecting a person’s acceptance of the technology that is beyond the control of the individual. It is important to recognize that e-commerce activities range from entry-level activities such as having web browsers, web sites, and email, to sophisticated activities such as online payments, making purchases online, customer services and video conferencing. Akkeren and Cavaye (1999) state that the adoption of ecommerce practices is a progression and sophisticated technologies are unlikely to be adopted before those at the entry level have been successfully adopted. These entry-level activities provide the necessary technological infrastructure from which more sophisticated e-commerce activities can be developed. According to the predictions of the Gartner Group, average European SMEs with ICT budgets of the order of $150,000 per annum would be unable to afford Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
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Acquisition Editor: Mehdi Khosrow-P
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The Economic and Social Impacts of
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vi Preface E-commerce is not new, t
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About the Authors 259 Eric Cloete B
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