SMEs and ICT: Empirical Study of Manufacturing Industries in the Industrial Estates of Chennai

Abstract

Small and Medium Enterprises (SMEs) form a very important component in the industrial fabric of India. Their advantage in terms of providing employment and promoting exports is well proven. The need for the adoption of Information Communication Technology (ICT) has been widely propagated by The Ministry of Small and medium Enterprises, Government of India . Recognising the importance of ICT adoption by SMEs this empirical study was undertaken in the SME cluster in Chennai, Tamilnadu, India. A total of 300 manufacturing firms were surveyed by the administration of a questionnaire with the objectives of examining the factors affecting intensity of use of ICT, the benefits of ICT use and the benefits and challenges faced in the use of higher end ICT tools like ERP. Statistical tools of analysis like Discriminant Analysis, Factor Analysis and Multiple Regressions have been used. The study is the first of its kind in India and Asia. The major finding was that operating in industrial clusters supported adoption of basic ICT tools. But firms were wanting in terms of higher end tools. Some policy recommendations have been prescribed. The research study was limited on to the industrial clusters. Further only manufacturing SMEs were considered The findings of the study provide a areas of policy initiatives for the government as also private and public organizations in the promotion of SMEs SPSS software was used for the analysis of data.