IT investment and constraints in developing countries

Abstract

Due to the rapid changes in technology, competition, and globalization, information has become businesses’ most significant asset. IT has become indispensible for modern businesses because it helps shape and support competitive strategies. Investment in IT seems to be even more critical for any developing country in order to enhance its economic development. This paper aims at investigating constraints and determining factors of IT-related investment in a developing country by using Thailand as a case study. A survey of manufacturing data shows that the most critical constraint obstructing Thai manufacturers from investing in their IT-related needs is the lack of IT human resources, which includes lack of knowledgeable and trained IT personnel and lack of experienced consultants to provide IT-based solution systems. The association between a higher level of IT skill among production workers and a firms’ investing in IT is found to be positively significant. Thus, providing training courses in IT-related skills should therefore be considered a necessary option. However, evidence from surveys shows that IT training courses have received less recognition among those manufacturers, for both in-house training as well as outside training. Promoting research partnerships and providing incentive for both R&D and E-commerce promotion are found also to be effective policy options.