An ICT adoption model for SMEs in the Philippines: Insights from the hospitality sector

This thesis explores the drivers that encourage small and medium enterprises (SMEs) in the hospitality industry in the Philippines to adopt information and communications technologies (ICTs) for their business operations during the 2020-21 COVID-19 pandemic. Despite having the distinction of being strategically located within the Asia-Pacific region, a bustling centre for world trade and commerce, an expansive melting pot of human resources and a prominent hub for agile technologies and innovations, Philippine SMEs are functioning below expectations in terms of their contribution to the country’s macroeconomy compared to other SMEs in the Asia-Pacific region. Literature highlights ICT adoption in SMEs can lead to improved business performance. Consequently, an examination of drivers or factors influencing ICT adoption in Philippine SMEs is now crucial. A systematic review of the literature on technology adoption in SMEs reveals only two studies from the Philippines out of a total of 185 studies done on the Asia-Pacific region. This clearly highlights the gap in research on SMEs in the Philippines. Further, SMEs throughout the world have been the hardest hit during the COVID-19 pandemic with huge losses and business closures. The hardest hit were the tourism and tourism-allied industries such as hospitality businesses, as governments around the world imposed lockdowns limiting travel and mobility to curtail the rapid spread of the disease. COVID-19 restrictions are likely to impact ICT adoption, and currently the published literature on ICT adoption during the pandemic in the hospitality sector SMEs is scarce. This thesis aims to address these identified research gaps in literature and develop an ICT adoption model for hospitality sector SMEs in the Philippines. Employing an exploratory sequential mixed-methods approach, this research commenced with 10 in-depth qualitative interviews with ICT implementation experts and experienced professionals working in the government and industry sectors. The findings of the qualitative study informed the design of the subsequent quantitative phase involving a survey of 154 SMEs in the hospitality industry in the Philippines. Results of the qualitative and quantitative phases were integrated to develop an ICT adoption model for Philippine SMEs. Findings of the mixed-method study revealed novel factors specific to the Philippines (e.g., Filipino culture, Philippine infrastructure and development, and local external change agents), and preparedness-related factors (i.e., perceived utility of ICTs for adapting to COVID-19, and perceived utility of ICTs for disaster preparedness) influencing ICT adoption in that country’s SMEs. These new insights were in addition to factors already identified in the literature on the technology, organisation and environment or the TOE model devised by Tornatzky, Fleischer and Chakrabarti (1990). This thesis reports 16 significant drivers for ICT adoption in Philippine SMEs, namely: technological (relative advantage, perceived ease of use, and cost of the technology), organisational (top management support, resources, awareness, attitude and end user skill ), environmental (market forces, service providers’ competence and support, government intervention, and social or external pressure), Philippine-specific (Philippine infrastructure and development, and local external change agents) and preparedness-related (perceived utility of ICTs for adapting to COVID-19, and perceived utility of ICTs for disaster preparedness). The findings suggest it is necessary and urgent for ICT developers to produce solutions that not only benefit SMEs but also not costly to the extent that they will not be able to maximise their benefits such as adapting to COVID-19 and natural calamities. Further, the government and other change agents have important roles to play in terms of improving the infrastructure needed for interconnectivity, increasing awareness of the relative advantage of ICTs in business and developing end-user skills through training and education.