Impact of ICT Adoption on Small and Medium Enterprises in Ilala District, Dar Es Salaam, Tanzania

Abstract

ICT plays a critical role in the growth and development of SMEs. Tanzania is a developing country where small and medium enterprises (SMEs) are perceived as the engine of growth, yet they have not attained the expected level. The adoption of ICT enables the SMEs to be more competitive. ICT plays a very important role in the current knowledge economy. The ICT sector presents a tremendous opportunity for economic growth. If ICT is adopted, it will significantly improve the performance and productivity of SMEs. The problem facing most of the SMEs is partial or non-adoption of technology. They have to adopt ICT in order to remain competitive and be competitive. The study investigates how the adoption of ICT could contribute to the success of small and medium enterprises (SMEs), examines impact of information and communication technologies in small and medium enterprises growth and development. Technology acceptance model was adopted by the researcher. The case study and cross-sectional survey research design was used to generate data. This is because with such a design it is easy to collect data in a short period of time from many respondents. The researcher used questionnaires to gather data from SMEs institutions covering Ilala district in Dar es Salaam, Tanzania. The researcher used the sample size of 82 respondents. Simple random sampling was used in sampling SMEs in Ilala district. The data collected from the survey was analyzed using simple percentage, mean, standard deviation, and regression analysis. The results show that T1 and T3 Pearson's correlation coefficient(r) equals .231*, indicating a strong relationship in terms of correlation. p< .037 and indicates that the coefficient is significantly different from 0. We can conclude that there is correlation between T1 and T3. In particular, it seems that the more the use of computer network it stimulates the growth and development of the SMEs (r = .231, p <.037). Also T1 and T2 Pearson's correlation coefficient(r) equals .196*, indicating a strong relationship in terms of correlation. p< .077 and indicates that the coefficient is significantly different from 0 (r = .196, p <.077). ICT has great potential in the growth and development of SMEs which is still untapped in Ilala district. The adaption of ICT in SMEs business has helped to transform business to another level, sharpen market intelligence, improve efficiency, reduce supply chain from B2C, B2B, and increase customer satisfaction.