Internet Adoption by Small and Medium-Sized Enterprises (SMEs) in Developing Countries: The Case of Travel Agents in the United Arab Emirates

Abstract

Internet technologies are commonly seen as the future for most modern businesses across industries. However, the adoption of such new technologies is often lagging in small and medium-sized enterprises (SMEs) worldwide. Because of a lack of infrastructure or institutional development, SMEs located in developing countries may struggle even more in adopting new technologies. This research investigates the factors that influence Internet adoption in SMEs in developing countries through a case study of travel agents in the United Arab Emirates (U.A.E.). A census-like database of all known travel agents in four emirates provided the basis for the survey. The findings indicate that customer demand and industry pressures are positively associated with Internet adoption by travel agents across the U.A.E. Surprisingly, internal resources appear to be less relevant. Lack of local institutional support is negatively associated with Internet adoption but has no effect on the perceived importance of Internet features, illustrating a typical dilemma for developing-country enterprises: they are exposed to stronger competition and the increasing sophistication of their customers, but lack the means and support to satisfy such demands. Split-sample analysis found significant differences between travel agents by emirate, by business size, and by international sales focus.