ROLE OF INFORMATION AND COMMUNICATION TECHNOLOGIES FOR THE GROWTH OF SMALL ENTERPRISES IN ETHIOPIA: THE CASE OF AWI ZONE, AMHARA REGION, ETHIOPIA

Abstract

Despite the growth of ICT adoption worldwide, Ethiopian small enterprises continue to conduct most of their business communications using traditional methods. The general objective of the study was to identify the roles of ICT for the growth of small enterprises in Awi Zone, Amhara region, Ethiopia. From this general objective, five specific issues were explored. Small enterprises were sampled using multi stage sampling technique from five sectors proportionally to ensure the role of ICT in business performance. The study used survey research and both primary and secondary data collection methods were used to collect data from the study area. Primary data were collected from 339 sample respondents using questionnaires and interviews using purposive sampling technique. Descriptive research method is used, and the collected data was analyzed both quantitatively and qualitatively. From the analysis of the collected demographic data majority of small enterprise operators; have less than Diploma level education, age range was between 25-35 years, 145(45%) were engaged in the trade sector, 167(51.9%) nature of business was proprietorship, (89.8%) were established less than 13 years ago (1997-2008 E.C) in the study area. In addition, awareness of ICT among small enterprises did not know much about the knowledge economy (usage of ICT) to their business and that they know very little about ICT. Uses of computer, degree of using ICT tools in the business, electronic banking was very low on the other hand the importance was very high. Among Telephone, Internet, Postal Box and Fax; Mobile was the most preferred ICT tool to communicate with customers and suppliers. ICT; improved business communication, enabled better relationship, enabled be more efficient and productive, enabled to reach more customers, cost reduction, coverage of wide geographical area, customer satisfactions etc. are some of the benefits of using ICT. The driving ways of ICTs contribution to the growth of small enterprises were: saving time, improving business communication, decreasing cost of work, increasing efficiency of business, improving organizational performance, reducing transaction cost, covering wide geographical market area, building better relationships of customers and suppliers, and building survival of competition of small enterprises are among ways of contributions of ICT to small enterprises. Lack of availability of internet and network infrastructure, lack of training, resistance of end-users to ICT, lack of knowledge in the areas of ICT, lack of experience to apply ICT in the business, lack of ICT applicability to business and shortage of electricity, high cost of ICT materials, shortage of money, absence of financial networks, poorly developed telecommunication infrastructure, security concerns etc. are among the major challenges of using ICT service in the study area. In general, the application of ICT in business was very low, but the benefit is high. However, the study recommended that giving training, improvement in the ICT awareness habit of the society, educating society, commitment of the government to facilitate the expansion of ICT infrastructure, willingness among small entrepreneurs, cooperation in building infrastructure are the major opportunities to use ICT industry in business activities of small enterprises performance