Social networks and technology adoption in small business

Abstract

Many extant studies seek to explore the technology adoption characteristics of small firms. Given the importance of technology to firm success, understanding the determinants of technology adoption and its subsequent diffusion is the prevailing theme in much of the extant literature on small business. However, few studies investigate the impact of social networks on technology adoption in small firms. As small business owners are often part of a dynamic network of other business owners and suppliers, among others, it is likely that the business owner's decision to adopt various technologies will be influenced by their networks. In this study, we build on and draw from the work of various researchers such as Rogers' Diffusion of Innovations (DOI) theory, Davis' Technology Acceptance Model (TAM), Bandiera and Rasul's work on the influence of network type and Abrahamson and Rosenkopf's research on network density to construct our parsimonious model. The conceptual model presented integrates key adoption attributes (i.e. organisational readiness, compatibility, Perceived Usefulness (PU), Perceived Ease of Use (PEOU) and top management support) with that of social network concepts (i.e. extra-firm networks, network density and network type) to determine their relationship with technology adoption.