Digitalization adoption for digital economy: an examination of Malaysian small medium-sized enterprises through the technology–organization–environment framework

Abstract

PurposeThis research is set to assess the achievement of digital economy through digitalization adoption (DA) among Small Medium-sized Enterprises (SMEs). For more insightful findings, a comparison between the service-based and non-service-based industries was performed. Besides, it endeavours to identify the important and performing dimension of the Technology-Organization-Environment (TOE) framework. The purpose of this paper is to address these issues.Design/methodology/approachQuantitative approach through purposive sampling technique was used to collect data from the SMEs. Variance-based structural equation modeling was adopted to assess the model and multi-group analysis (MGA) was executed to examine the difference between the two classified industries. For the identification of the dimension, Importance-Performance Map Aanalysis (IPMA) was carried out.FindingsTechnology and organization recorded significant positive influence on digitalization adoption but not environment. Digitalization adoption between the two classified industries shows divergent results. IPMA concur the importance and performance of the technology and organization dimension, in which SMEs shall focus on for digitalization adoption.Research limitations/implicationsThis is cross sectional research and data were collected at a single time frame. Hence, the result is a state-or-art finding. Assuming that if there are changes in government policies, the results may differ. Besides, there are other possible groupings that could affect the results in which is not covered in the present research.Practical implicationsThe findings imply that the DA amongst SMEs has yet to achieve its full spectrum, which indicates Malaysia has yet to fully embrace digital economy. Nevertheless, DA is the fundamental for a successful digital economy.Social implicationsThis research provides the general public an overview that SMEs are adopting digitalization with various degree. This specifies that the society is paving towards digitalization with the SMEs actively adopting more digital technologies.Originality/valueThe novelty of this research arises from the utilization of the TOE framework to link to the achievement of the national digital economy. Additionally, current research adopted a rigorous approach to investigate the issue by using MGA, the hierarchical component model (HCM) and IPMA for holistic findings.

SEM-neural network analysis for mobile commerce adoption in Vietnamese small and medium-sized enterprises

“…SMEs may delay adoption due to insufficient employee knowledge (Kurnia et al, 2015). Without adequate IT knowledge, SMEs are less likely to adopt advanced technologies (Low et al, 2022). Huy et al (2012) also indicate that the absence of IT expertise among employees is a deterrent for SMEs in the adoption of advanced technologies.…”

“…Huy et al (2012) also indicate that the absence of IT expertise among employees is a deterrent for SMEs in the adoption of advanced technologies. Employees' IT knowledge is the most critical determinant for technology adoption in SMEs (Chan et al, 2021;Low et al, 2022). This leads to the following hypothesis:…”

“…It significantly affects technology adoption in SMEs. As technology adoption can be riskier for SMEs with limited ICT support (Low et al, 2022), innovative SMEs are more likely to embrace such a risky solution (Opasvitayarux et al, 2022;Nazir et al, 2023). Organizational innovation plays a crucial role in influencing the adoption of technologies (Siamagka et al, 2015).…”

“…Given that m-commerce stands as a significant model susceptible to technological advancements, organizational innovativeness can foster a positive inclination towards the adoption of m-commerce (Salimon et al, 2017). Organizational innovativeness is the most critical determinant for technology adoption in SMEs (Wamba and Carter, 2013;Mahakittikun et al, 2020;Low et al, 2022). This leads to the following hypothesis:…”

“…Government policies encourage businesses including SMEs to adopt technologies (Chatzoglou and Chatzoudes, 2016). Government support is the most critical determinant for the adoption of technologies in SMEs (Chatzoglou and Chatzoudes, 2016;Hanifah et al, 2019;Low et al, 2022). Therefore, the following hypothesis is proposed:…”