THE CHALLENGES OF THE INTERNET IN TODAY'S NIGERIA BUSINESS ENVIRONMENT

CHAPTER ONE

GENERAL INTRODUCTION

Background to study

A study by BMG et al. (2015) found that almost all SMEs used the Internet for commercial purposes, but the intensity of use varied with size. The most common use of the Internet was to be in contact with customers. Although the use of e-commerce is increasing, it was still much less frequent: only 20% of turnover came from this source in 2013 and only 22% of companies made online sales. A quarter of SMEs reported that they did not have basic digital skills; There was a positive relationship between the numerical ability level and the growth of the rotation. SMEs have an attitude barrier to developing an online presence, a lack of awareness of the benefits and opportunities available, and a lack of understanding of online security threats.

The integration of digital learning throughout the education system is a long-term solution, but there is also a clear need to improve digital capabilities in the short term. One of the keys to increasing the capacity to take advantage of the opportunities offered by digital technology is to deliver digital literacy courses, implement outreach initiatives through existing private local and tertiary sector networks, and improve cyber security. In a competitive and changing environment, SMEs have changed the way they work by improving the quality of their businesses in order to compete in regional and global markets. Digital technologies therefore play an important role in the growth of SMEs. Internet adoption by large and small firms in developed countries has increased considerably (Al-Debei and Al-Lozi, 2012). However, the rate of Internet adoption in SMEs in developing countries has remained relatively low (Asare et al., 2012, Mokaya, 2012). Internet innovation has contributed to improving organizational performance and creating a competitive advantage for organizations in developed and developing countries (Al-Debei and Al-Lozi, 2012). Global competitiveness and the need to stimulate growth are compelling reasons why SME leaders must adopt the Internet (Ghobakhloo and Tang, 2013). Researchers have conducted studies on the factors influencing Internet adoption by SME leaders in developing countries such as Nigeria (Apulu and Latham, 2011, Asare et al., 2012, Mokaya, 2012). However, few studies have been conducted on the factors that drive SME leaders to embrace the Internet as a business strategy to gain competitive advantage in the global marketplace.

1.2   Statement of the Problem

Although the government and other development partners have implemented a series of initiatives on digital technology, it seems that SMEs are very little aware of the changes that technology inevitably entails in terms of business growth and how they should work. Adapt to this change. The approach has been changed from the use of technology to the understanding of technologies that can be used for specific commercial purposes and how best to apply them in a variety of contexts. While Nigerian SMEs are enthusiastic about the changes in the use of technology in business, the challenges are many, including lack of network infrastructure and slow or unstable wireless access. Some SMEs do not have the bandwidth needed to support Internet activity in their businesses. This is a major challenge in the process of communication between staff and management. Other challenges are poverty, lack of knowledge and lack of training in the use of digital technologies. In addition, ensuring that technology is used to enable and promote effective business practices is also a significant challenge. Therefore, it is necessary to study the effects of the adoption of digital technology on SMEs in Nigeria. However, this study will examine Internet challenges in the growth and development of small businesses in urban cities of Nigeria.

1.3   Research Objectives

The specific objectives to:

i)             To evaluate the relationship that exists between Internet and the profitability of Business In Nigeria

ii)           To examine the major constraints of Internet adoption by Business In Nigeria

iii)         To determine the effect of Internet system on the growth of Business In Nigeria

1.4   Research Questions

The following are some of the questions which this study intends to answer:

i)             What is the relationship that exists between Internet and the profitability of Business In Nigeria?

ii)           What are the major constraints of Internet adoption by Business In Nigeria?

iii)         What are the effects of Internet system on the growth of Business In Nigeria?

1.5   Hypotheses of the Study

The following are some of the questions which this study intends to answer:

i)             Evaluate the relationship that exists between Internet and the profitability of Business In Nigeria

ii)           There is no significant relationship between Internet system and the profitability of Business In Nigeria.

iii)         Business In Nigeria are not faced with any constraints in the adoption of Internet system. 

iv)         There is no significant relationship of Internet system on the growth of Business In Nigeria.

1.6   Significance of the Study

Quite a number of researches have been carried out related to this study such as Adewole and Akanbi (2004) in which they examined the role of information and communication technology investment on the profitability of small medium scale industries – a case of sachet water companies in Oyo state, Nigeria. Similarly, Rufai (2014) studied the impact of communication technologies on the performance of SMEs in a developing economy, a case study of Nigerian SMEs. However, this research is distinct from various similar researches such that it examines the impact of internet on growth of small and medium enterprises. This research tends to be very beneficial to small and medium enterprises, stakeholders in the country, Nigeria economy as a whole and also adds to the existing literature concerning this topic.

1.7   Scope of the Study

Due to financial constraints, time and mostly academic workload, this research will not be able to cover the entirety of SMEs in Nigeria. Hence, this study deals with SMEs operating in Port Harcourt State, Nigeria only within the last five years.