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is to uncover where South Africa stands with regard to ICT adoption by SMEs, and also to find out the issues facing South African SMEs.

This chapter will firstly define what is understood by both ICT and SMEs. Secondly it will establish the current state of affairs regarding the use of ICT by South African SMEs; and thirdly, determine the driving factors for ICT adoption in South Africa. The chapter will then establish the status quo in South Africa and discuss the stumbling blocks that make it difficult for South African SMEs to adopt ICT. Finally it will recommend ways in which SMEs could use or get started with ICT to become competitive.

3.2 What is ICT?

Information and Communication Technology covers technologies like the simple telephone, point-of-sale systems, stand-alone PCs, networked environments, Internet, and credit card facilities. Ritchie and Brindley (2005) define ICT as “the array of primarily digital technologies designed to collect, organise, store, process and communicate information within and external to an organisation and, in our case, SMEs” (Ritchie & Brindley 2005:206).

ICT is a broad concept that covers Information Systems (IS), Information Technology (IT) and digitalisation. Many authors (Ritchie & Brindley 2005, Martin and Matlay (2001), Fulantelli & Allegra 2003) on this topic concur that ICT brings changes in the global information flow, behaviour, patterns and options of customers, and SMEs stand to benefit from ICT in reduced transaction costs, inventory controls, quality controls, access to a wider market space and leveraging economies of scale. According to Moodley (2002), ICT is an enabler for global “networking” economy.

“Information and Communication Technology (ICT) offer enterprises a wide range of possibilities for improving their competitiveness: they provide mechanisms for getting access to new market opportunities and

MIT 840

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