Analysis of Technology Adoption by SMEs Using Technology Organization Environment Model

Evi Triandini1, I Gusti Ngurah Satria Wijaya2, I Ketut Putu Suniantara1

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Abstract

The increasing existence of Micro, Small and Medium Enterprises (MSMEs) in the era of disruption or global change with intense competition between contestants, makes it imperative for MSMEs to be able to find solutions to these constraints or challenges such as looking for new opportunities, innovating a product, and technological prowess as well as seeking markets with a very wide range of coverage. MSMEs as a support for the Indonesian economy still show a low export contribution so scientific studies are needed to produce a policy for MSME management in managing their business to increase competitiveness, especially exports by taking into account the factors resulting from the theoretical analysis of digital technology adoption. This research intends to identify the contribution of digital technology, based on factors in the Technology, Organization, and Environment (TOE) framework, to increase the competitiveness of export-oriented SMEs in Indonesia. The method used is to analyze the variabels in the TOE framework employing SEM-PLS analysis (Structural Equation Model-Partial Least Square). The outcomes of the TOE model are that the environmental, organizational, technology dimension has a direct positive and significant effect on technology adoption. The technology dimension is supported by relative advantage, trialability with a high significant value and complexity, compatibility, and observability indicators with a lower significance value. The organizational dimension is supported by the variable information processing needs, knowledge competence with a high significant value, and company size having a lower significance value. Lastly, the environmental dimension is supported by government support, uncertain environment, and competitive pressure variables which have a high significant value. The practical implications derived from these results, especially the indicators of complexity, suitability, observability and rigor, are to recommend a policy especially for MSME owners and managers as well as regulatory stakeholders in Indonesia so that they continue to support increased development in the areas of human resource knowledge, capital and digital technology infrastructure to achieve quality and technological maturity used by MSMEs.