Information Communication Technology Adoption and Its Role in Enterprise Innovativeness: The Cases of Medium and Large Manufacturing Industries in Adama City

Abstract

The purpose of this study was to gain a deeper understanding of the effects of information communication technology adoption and application on the innovativeness of medium and large manufacturing industries in Adama city. The study is a qualitative multiple-case study involving five purposely selected companies from Textile, Food, Chemical and Cable manufacturing. Semi-structured interviews were conducted with key informants constituting three top managers from each of the selected companies. The study employed a cross-case data analysis technique to analyze the collected qualitative data. The secondary data used were the 2015 World Bank’s enterprise survey of Ethiopian manufacturing to substantiate the qualitative data results. The data were analyzed through descriptive statistics. The research findings revealed that basic information communication technologies such as computers, printers, the Internet, Email and Social Media have been used among all case companies. In contrast, the use of advanced information communication technology is still limited and varies across firms. The study further found that information communication technology brings a lot of benefits to manufacturing industries including increasing production speed, being a source of new idea generation, enabling the promotion of brands, performing orders online, and improving communication and organizational work structure. In this regard, information communication technology can be said to have been serving as a means of enhancing innovativeness. Moreover, the study found that the main internal problems to information communication technologies adoption and application by manufacturing firms include a shortage of skilled workers, lack of managers’ commitment, lack of investors’ willingness and financial problems. Among external challenges that were found to have limited the use of information communication technologies are shortage of supplies, high cost of equipment, poor education system, industrial policy, political instability and absence of international payment systems such as PayPal and credit card bank services. In conclusion, even though information communication technology has supported firms’ innovativeness its adoption and application extent are still at an early stage because of internal and external influencing factors. The study, therefore, recommends that awareness be increased regarding the importance of information communication technologies in manufacturing firms. Company owners should be encouraged to train their employees about the usage of information communication technology. In addition, the concerned government bodies should better address critical issues such as information communication technology infrastructures, limitations observed in industrial policy, and the education system.