Kaushalesh Lal

Determinants of the adoption of e-business technologies

The paper identifies and analyses factors that discriminate firms using different types of e-business technologies in the manufacturing sector in India. The study is based on primary data collected from 51 firms located in the National Capital Region. Entrepreneurial characteristics, historical data of firms, and other firms-specific factors such as size of operation, export intensity, international orientation, wage rates, and profit margins were included in the analysis. The findings of the study suggest that the firms managed by informed and qualified entrepreneurs have adopted more advanced e-business tools. The study captures the role of bandwidth in diffusion of e-business. The results show that variables such as size of operation and wage rates differ significantly between portal using firms and others. International orientation of firms represented by variables such as exports intensity and technological collaboration with foreign firms have also emerged as significant factors that distinguished advanced e-business technology using firms from the rest.

Growth of Employment and the Adoption of E-Business

The paper investigates the impact of the adoption of e-business technologies on workforce displacement. A case study approach has been applied to examine both direct and indirect employment associated with the adoption and production of new technologies. The study covers a wide spectrum of large firms ranging from skill intensive sectors such as electronic goods manufacturing, to labour intensive sectors such as garment manufacturing. E-business technology producing firms were included in the study. The study did not find any evidence to support the argument that adoption of e-business technologies leads to a loss of jobs. The results do indicate, however, that the adoption of e-business technologies might result in the restructuring of business organizations. The study further reveals that the adoption of new technologies creates substantial employment in the form of new business activities, at the expense of a few jobs in existing business processes.

New Technologies and Economic Development

In recent times, considerable empirical studies have been undertaken to understand the precise ways in which new technologies, particularly information and communications technologies (ICTs),1 have contributed to the process of knowledge accumulation and more importantly, how this has promoted economic performance.2 These studies have been carried out at different levels of aggregation, namely establishments and plants, firms, industries or sectors and countries. Strikingly but not surprisingly, most of the studies were carried out within sectors and firms in industrialized economies. Although the review (Seigel et al., 1997; Lichtenberg, 1995) shows a skewed distribution in the trend of studies, there have been efforts within developing countries themselves, by scholars working on developing countries as well as by the United Nations, to understand the role of ICTs in the economic development of countries (UNCTAD, 2001, 2002, 2004; Lal, 2002, 2001; Oyelaran-Oyeyinka and Adeya, 2004; Oyelaran-Oyeyinka and Lal, 2004). There are studies that examine the specific impact of ICT policies and in fact suggest that good ICT policies help develop e-business (Bridges.org, 2001; Dekleva, 2000; Wolcott et al., 2001; Mbarika and Byrd, 2003; UNECA, 1999). However, there are gaps in two respects, that this book addresses.

Adoption of Digital Technologies in Tertiary Education: Evidence From India:

The article delineates the existing paradigm of educational technologies in Indian tertiary education institutions. The findings are expected to be useful for tertiary education institutions and policy makers so that they can reorient the existing policies that will be helpful in providing quality education commensurate with industrial needs. The study investigates the adoption of new educational technologies and its impact on students. The empirical findings are based on primary data collected from state and privately funded universities located in and around Delhi, India. The findings of the study suggest that there is a positive association between the intensity of technology used and its impact on students. We also find that the use of latest technologies makes students more creative and improves learning abilities. The other factors that influenced the degree of new technologies used are the opinion of students on the following descriptions: (a) Helps in understanding concepts more clearly, (b) Contributes in better illustration of ideas, (c) Provides opportunity to interact with students of other institutions effectively, and (d) Equates with international teaching methodologies.

Collective Action, Competitiveness and E-Business Technologies

This chapter discusses four important factors identified in our study that tend to be closely associated with the adoption of e-business: the potential business activities in which e-business technologies can be adopted, the availability of reliable and affordable ICT infrastructure, the potential gains expected from e-business and the impediments associated with e-business in a developing context. It is difficult to cover all these aspects in one study; we therefore focus on a limited number of objectives in this chapter, which are: factors that discriminate advanced users of e-business technologies from others; the impact that the perception of management has on the adoption of new technologies; impact of the competitive environment on the diffusion of e-business technologies; the role of the institutional environment in the growth of e-business; and the role of collective actions in the diffusion of e-business technologies.

Methodological Framework for Studying SME Clusters

There are several dimensions to explaining the rate and nature of ICT diffusion among SMEs in developing countries. For one, there is the role of the institutional environment that is different across countries but uniformly underdeveloped compared to the more industrialized context. Second, there is the intervening role of clustering that creates a ‘network’ effect within the geographic space of industrial clusters. Again, SMEs are a highly heterogeneous group with different size structures and trade orientations. For instance, while relatively small firms characterized by financial and technical resource constraints rely mainly on the domestic market, medium to large firms with considerably higher technological competencies tend to venture into export markets.

New Technologies and Export Performance of SMEs

The policies adopted by developing countries in relation to international trade have always played a crucial role in their social and industrial development. In recent years, a number of developing countries have been able to strengthen their comparative advantage by focusing on building technological capability, on new technology adoption and on the development of skills to use these new technologies effectively and efficiently (Noland, 1997). Several studies (Trefler, 1993, 1995; Moreno, 1997) have demonstrated the importance of technological differences in international trade. Moreno (1997) found that technology had a significant effect on the evolution of Spanish industrial exports. The study suggests that non-price factors, such as product quality and product differentiation, exert a significant influence on international competitiveness.

Determinants of E-Business Adoption

Most of the studies analysing the causes and consequences of e-business adoption tend to select firms controlled by their size of operation and product mix. Given the paucity of such studies in developing countries, we analyse factors that have the potential to influence the adoption of internal e-business technologies. Internal and external e-business technologies are discussed in Section 4.3. The main objectives of the chapter are: identification of clusters of firms based on choice of technology; to classify firms in each cluster based on pre-selected criteria; to investigate factors that mediated in the adoption of a particular technology; to analyse these factors within a multivariate analysis framework in order to identify the key determinants of adoption.

Institutional Infrastructure Supporting E-Business Adoption

Infrastructure is fundamental to all production activities, and a network function, be it telephony or electricity, depends on massive physical and technological infrastructure, which traditionally had been supplied by public monopolies. However, the required scale of investment for a modern infrastructure is often beyond the financial capacity of private investors in developing countries. Infrastructure possesses technical and economic characteristics that affect innovation XE “innovation” systems in very profound ways. The technical attributes of infrastructure include ‘scale, indivisibility, multiple use and generic functions’ that separate it from other forms of capital.14 Indivisibility confers a systemic attribute on infrastructure that allows it to serve the entire industrial and non-industrial system, with considerable flexibility for multiple extensions. The latitude for multiple use of infrastructure by urban and non-urban consumers equally extends its scale-economic characteristics. In this chapter, we consider three categories of infrastructure: physical, technological and human capital infrastructure.

Learning New Technologies by SMEs: Mechanisms and Trajectories

In successful firms, firm-level capabilities would comprise core and ‘general-purpose technologies’ (GPTs) competencies. The corollary is that successful firms would in turn possess both GPTs and firm-specific skills. The range of GPTs include mechanical engineering and arguably the most pervasive to date, ICTs (Rosenberg, 1994). These technologies are required for, and in fact are indispensable to, the operation of the core routines of organizations. For instance, mechanical engineering is as crucial to the automobile industry as biotechnological skill is key to pharmaceuticals and foods industries. The advent of microelectronics has not only deepened the systemic complexity of all industries, but also revolutionized the nature of industrial organization. Major technological advances in ICTs have caused significant changes in manufacturing; ICTs underlie many of the observed patterns of process and product innovation across industries. At the centre of the manufacturing changes, with significant implications for processing speed as well as flexibility of production and high precision, is the progressive inclusion of microelectronics. While many of these advances have originated in advanced industrial economies, developing countries have taken advantage of these new technologies by building up industrial capabilities through sustained and explicit learning.