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What this means for a developing country like South Africa is that it has to compete with developed countries for the same markets. Companies in developed countries have an advantage over local companies - who face different challenges and have less experience in their marketplace. They can sell their products and services more cheaply, therefore killing local companies. A good example of globalisation forces on the South African market, in particular the agriculture and wood industries, is highlighted by the research of both Tregurtha and Vink (2002) and Moodley (2002) respectively. Both the sectors saw a need to grow their business globally in order to survive in the new economy. One of the biggest barriers in these industries was the fact that these markets had been protected for too long and the government had to come up with policies to liberate the markets. This means that the South African Government is a key stakeholder in the process of helping this country to participate in the knowledge economy.

3.4.1.2 Government drives

Governments recognise the role that SMEs play in the economy in solving some of their major headaches like unemployment, so they want to narrow down the digital divide so that SMEs can contribute to the new economy. According to TIPS (Trade and Industry Policy Strategies), the South African Government is very aware of the need to participate in the global economy and the knowledge economy in order to grow and survive into the future. The government has put groups like TIPS in place to deal with policy issues and to push its agenda of getting South Africa involved in the ICT arena.

3.4.1.3 Innovation

SMEs realise that in order for them to be successful and competitive against big business, they need to offer innovative goods or services, and that ICT is an enabler of innovation. Innovation gives the SME the

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