Contribution of ICT on Small and Medium Enterprise Business Profitability: A Literature Review

Small Medium Enterprises (Smes): History And Evolution

The existence of many nations, organizations, and people is impacted by globalization, the information society, and economics (Martin, 2017). Likewise, the proliferation of the aforementioned processes was significantly impacted by the quick development of information and communication technologies, or ICT (further), which transforms the established corporate structures and communication channels. It is well recognized that the adoption and use of ICT represents basics of economic growth and competitiveness for businesses, organizations, and even nations that are able to utilize them (Myovella et al., 2020).

In the twenty-first century, information and communication technology (ICT) has become an integral part of human life (Devkota & Phuyal, 2018). ICT devices, in particular, have helped businesses increase productivity and manage inter-organizational affairs. However, customers may also use the technology to perform more versatile and reliable personal communications, business transactions, and banking operations (Zhang & Kizildag, 2018). Likewise, small and mid-size enterprises (SMEs) are businesses that maintain revenues, assets or a number of employees below a certain threshold (Adhikari et al., 2021). SMEs affect both the geographical placement of SMEs and country-specific legislation (Yolande Smit, 2012), and diversity of small business (Chittithaworn et al., 2011). In addition to micro-enterprises with just a few workers, the group of small and medium-sized enterprises (SMEs) includes profitable businesses with a large number of employees (Devkota et al., 2022). The Federal Ministry of Economic Affairs and Energy in Germany describes SMEs as companies with less than 500 workers or an annual turnover of up to EUR 50 million (Noorali & Gilaninia, 2017). Likewise, the business environment is becoming increasingly dynamic, complex and unpredictable with technology, globalization, knowledge and changing competitive approaches affecting overall performance (O’Regan et al., 2006). Small and medium-sized enterprises (SMEs) form an important part of both developed and emerging countries' economies. They build jobs, develop new business models and goods, minimize poverty, inflation and income inequality and solve the issue of balance of payments(Athapaththu & Nishantha, 2018).

Historically, because small and medium-sized enterprises were not considered economically viable enterprises, they were either encouraged to grow into much larger enterprises or, for other non-economic considerations, considered worthy of protection from external competition (Juradoa & Battisti, 2019). However, governments have introduced legislation to protect SMEs (and, in the specific case of New Zealand, all businesses) from external competition and to protect long-standing values of independence and self-reliance in largely immigrant-based societies such as the United States, Australia and New Zealand, epitomized by the right to 'make their own way' (Anglund, 2000; Hunter & Morrow, 2006; Lundström et al., 2014). Additionally, SMEs were also shielded from the arrival of big business in older, more developed cultures, but this protection was articulated in terms of maintaining traditional ways of manufacturing products and focus was also put on the effect that a shift in the production scale would have on lifestyles and the quality of the product itself (Landes, Mokyr & Baumol, 2010).