Factors impacting the adoption and use of ICT in the Malaysian SME sector

A review of extant literature reveals that little attention has been given to research into the level of ICT infrastructure among SMEs, as well as examining the factors that limit the use of ICT in these organizations. Earlier studies have mainly focused on the services sector. Hence, there is a need to conduct further empirical research across area range of industry sectors to better understand the challenges confronting SMEs that hinder the adoption and use of ICT. The aim of this paper is to conduct an empirical investigation to identity the barriers that limit the adoption of Information and Communication technology (ICT) among (SMEs), in Malaysia This investigation is conducted using a sample of 100 Malaysian firms. Despite the current government effort in regard to ICT incentives and grants, results reveal that the major hindrance for using ICT among Malaysian 5MB businesses include finance, employee education including ICT skills, high cost of ICT infrastructure and shortage of skilled human capital. This paper suggests, based on the empirical results that more work needs to be undertaken by government and policy makers to encourage ICT adoption among SMEs as competition from other countries, especially China and India is rising and this could be seen as a threat to Malaysian SMEs.