SEM-ANN-based approach to understanding ICT adoption for SME Sustainability in Nigeria

Abstract

Small and Medium Enterprises (SMEs) play a crucial role in Nigeria's economy, accounting for over 80% of the workforce. However, SMEs in developing countries face numerous challenges to their sustainability, including limited resources and restricted access to technology. Information and Communication Technology (ICT) adoption has been identified as a critical strategy for enhancing the sustainability of SMEs. However, only a small percentage of SMEs have adopted ICT, which can improve productivity, efficiency, and competitiveness. This study aims to investigate the factors that influence the adoption of ICT and its impact on the sustainability of SMEs in Nigeria. A sample of 500 SMEs in Lagos state was surveyed using a quantitative methodology. Additionally, the technology, organization, and environment framework was used to examine the factors that influence the adoption of ICT and its impact on SMEs' sustainability. Furthermore, the study utilized a combination of structural equation modeling (SEM) and artificial neural network (ANN) analysis to examine the gathered survey data. The results of the SEM-ANN showed that technology, organization, and environment significantly impact adoption, and ICT adoption significantly influences SME sustainability. Additionally, the results further showed that the organizational factor is the most important for successful ICT adoption, followed by environmental and technological factors. The study concludes that SMEs in Lagos, Nigeria, should pay attention to ICTs relevant to their operations and consider their organization's characteristics and resources to adopt these technologies successfully. This research contributes to the existing literature on ICT adoption and SME sustainability in developing countries. It provides valuable insights for policymakers and SME owners in Nigeria and other developing countries.