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CHAPTER 3

LITERATURE REVIEW

3.1 Introduction

Globalisation and digitalisation have changed the way business is done and competes in the marketplace; information and communication technology (ICT) is the lifeblood of this change. This change has resulted in a new economy, known as the knowledge economy: knowledge is the most important asset in this economy; knowledge is what we sell and buy. Lucchetti and Sterlacchini (2004) highlight the fact that the high growth rate in the US economy during the 1990s, which saw productivity and employment rise, was due to the early and fast adoption of ICT. ICT is the foundation on which the knowledge economy is based. Galloway and Mochrie (2005) substantiate the findings of Lucchetti and Sterlacchini that ICTs are the drivers of economic growth, as does Handzic (2004:7):

“Currently, at the forefront of organisational performance are the organisations which recognised that information, knowledge and their intelligent application are the essential factors of success in the new economy, and take advantage of information technology to achieve high levels of efficiency and effectiveness”.

Mutula and Van Brakel (2006) agree that information is an important asset, giving SMEs a competitive advantage in the new economy. However they point out that access to information is a problem in developing countries like Botswana and South Africa, due to lack of ICT infrastructure. Information access plays a critical role in the informed decision-making process, making it easy for SMEs to take good competitive decisions. “The ability of SMEs to survive in an increasingly competitive global environment is largely predicated upon their capacity to leverage information as a resource” (Mutula & Van Brakel, 2006:404).

MIT 840

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