Impact of Government Support and Competitor Pressure on the Readiness of SMEs in Indonesia in Adopting the Information Technology

The use of information technology to support the business organization's performance is one thing that needs to be done by large-scale industrial sector and small industrial sector (SMEs) to face global competition. As a developing country, the SMES sector in Indonesia is still not fully adopt and utilize information technology (IT) in the business process. Factors of contributors, inhibitors and the effect of the competitive environment and government support will tend to trigger SMEs to adopt IT. This study tries to explore the influence Contributor, Inhibitor, Government Support, and Competitor Pressure, to Technology Readiness (H1, H2, H3, H4), and the Influence of Technology Readiness on Behavioral to Use (H5). The study used 446 valid sample of SMEs of craft industry and being tested using the Partial Least Square (PLS) technique. The testing result shows that the Contributor and Inhibitor have the significant effect on the Technology Readiness with p-value of.000 (< 0.05) (H1 and H2 were supported). The testing result of the Technology Readiness on the Behavior to Use also shows the significant result with the p-value 0.00 (< 0.05) (H5 was supported). The test of the effect of the Government Support and Competitor Pressure shows the insignificant result with the p-value of 0.81 and 0.53 (> 0.05) (H3 and H4 were not supported). Further analysis also found that the Government Support and Competitor Pressure do not affect on the IT users (Behavior to Use) in SMEs. The finding also strengthen the previous claim that the Government Support and the Competitor pressure are not the component which make SMEs ready to adopt and use the IT on their business process. (C) 2015 The Authors. Published by Elsevier B.V.