Contributing Factors to the Diffusion of IT within Small and Medium-Sized Firms in Indonesia

Abstract

This paper investigates factors contributing to the diffusion and adoption of IT within small and medium-sized firms in Indonesia. Multiple case studies were used to answer detailed research questions and to reach the qualitative aspects of IT diffusion at the level of the firm. Based on the exploratory nature of the study, it is believed that internal innovative capabilities of firms have a prominent role in facilitating IT diffusion. This factor is made up of three proxy variables: level of IT knowledge, level of IT investment and coherent IT strategy reflecting the circumstances by which small and medium-sized firms in this developing country are able to respond to possible technological changes. The existence of government support and industry-academia linkages is also a contributing factor to the diffusion and adoption of IT in firms.