COMMENTARY
The large firms were very well-versed
Adoption Intention of Digital Tools
by Micro and Small Entrepreneurs
in the Post-pandemic Era
An Empirical Study in Odisha
Lakshmi Prasad Padhy, Ipseeta Satpathy, B C M Patnaik
The rationale for the adoption
of digital tools by micro and
small entrepreneurs in the
post-pandemic is explained. This
will help digital service providers
to customise their products and
services to match the needs of
micro and small businesses.
Lakshmi Prasad Padhy (lppadhy10@gmail.com)
is a research scholar, Ipseeta Satpathy
(ipseeta@ksom.ac.in) is a senior professor, and
B C M Patnaik (bcmpatnaik@ksom.ac.in) is a
professor at the School of Management, KIIT
Deemed to be University, Bhubaneswar.
18
T
he pandemic was the biggest
challenge for every business irre-
spective of its size and mode of
operation in India (Donthu and Gustafs-
son 2020: 284–89). Starting from micro
business to large corporate firms, all
were facing challenges in terms of low
scale operation due to low demand in
the market, lower profit margin, change
in consumers’ preference and shortage
of personnel during the pandemic and in
the post-pandemic era. Due to the social
distancing requirements, the consumers
prioritised convenience modes such as e-
shopping over the physical mode of pur-
chasing. Starting from e-shopping to tel-
emedicine to telework, the digital world
is the new normal for almost all groups
of people. Digital payments, social me-
dia consumption, and online shopping
are the new ways consumers prefer to
connect with brands or business.
january 21, 2023
in digital strategies even before the pan-
demic and also in accelerating the digi-
tal initiatives to address the new nor-
mal. However, the micro and small busi-
nesses were not so proactive to adopt
digital strategies given their limited res-
ources and the operational inefficiency
due to the pandemic (Papadopoulos et al
2020: 1–4). The micro and small ent-
repreneurs, however, could not afford to
ignore the digital needs of their business
in the post-pandemic era. There are
many low costs and easy to access digi-
tal tools being offered by tech compa-
nies to bridge the gaps in the adoption of
digital tools by micro and small entre-
preneurs. The micro and small entrepre-
neurs were willing to adopt these digital
tools once they realised the potential of
the digital business environment, which
emerged during the pandemic (Akpan
et al 2020: 1–18).
There are a few studies available on
adoption intention of digital technolo-
gies by small and micro entrepreneurs in
the post-pandemic context. This study
aims to bridge the gap by identifying the
underlying factors responsible for the
adoption intention of digital technolo-
gies by small and micro entrepreneurs in
the post-pandemic era. The research
question posed is “what are the factors
influencing the adoption intention of
vol lViii no 3 EPW Economic & Political Weekly

Figure 1: Conceptual Framework
H1
SP
PE
H2
H3 FC
H4 PF
Source: Compiled by the author.
digital tools by the small and micro
entrepreneurs?” In this cross-sectional
study, we examined the impact of social
and behavioural factors that will influ-
ence adoption intention for digital tools
by small and micro entrepreneurs in the
post-pandemic era.
Literature Review
Adoption intention: In this adoption
intention (AI) is the target variable, and
it can be conceptualised in the small and
micro entrepreneur context as the de-
gree to which an entrepreneur has for-
mulated a conscious action plan whether
to adopt the new digital technologies to
improve their business operation in the
emerging digital first environment in
the post-pandemic era (Stopford and
Baden-Fuller 1994: 521–36).
Social pressure: Social Pressure (SP) in
the technology adoption context can be
defined as the degree to which a person
believes that important peers think they
should adopt the technology (Venkatesh
et al 2003: 425–78). According to a study
by Venkatesh et al (2003: 425–78), social
pressure or social influence positively inf-
luences the intention to adopt informa-
tion systems. A study on entrepreneurs’
Economic & Political Weekly EPW january 21, 2023
AI
adoption intention by Moghavvemi et al
(2016) suggests that social pressure has
a significant impact on the intention to
adopt a new technology. An empirical
analysis on adoption intention of inno-
vative technologies by small and medi-
um enterprises (Maracati et al 2008:
1579–90) concludes that social pressure
has a positive and significant impact on
adoption intention. By noting the findings
from prior studies on adoption intention
we put forward the following hypothesis
in the context of the post-pandemic sce-
nario and adoption of digital technolo-
gies for micro and small businesses.
H1: Social pressures will have a significant
and positive impact on micro and small en-
trepreneurs’ adoption intention of digital
technologies.
Performance expectancy: Perform-
ance expectancy (PE) refers to the ex-
pected results in adopting and using
digital and information technology tools
(Venkatesh et al 2003: 425–78). Acc-
ording to Moghavvemi et al (2016), the
performance expectancy for entrepre-
neurs can be defined as the degree to
which an entrepreneur perceives that
adopting digital technologies are useful
for their job and support them to achieve
the set benefit in their business. According
vol lViii no 3
COMMENTARY
to Venkatesh et al (2003: 425–78), the
performance expectancy is a strong pre-
dictor of the adoption intention of new
technology and by noting the findings,
this study hypothesised that perfor-
mance expectancy will be a strong pre-
dictor of the adoption intention of digital
technologies by entrepreneurs in the
post-pandemic business environment to
boost their business again.
H2: Performance expectancy will have a posi-
tive and significant impact on entrepreneurs’
adoption intention of digital technologies.
Facilitating condition: Small and mi-
cro business entrepreneurs have always
operated with limited resources and
scarcity of resource is a challenge for
small business (Schaper 2010). Due to
the pandemic, the small entrepreneurs
are facing huge challenges in terms of
availability of resources, so the facilitat-
ing condition (FC) will be a key predictor
of intention to adopt the new digital
technology. The facilitating condition
can be defined as the degree to which
the entrepreneur perceived that the or-
ganisational and technical infrastruc-
ture would support the adoption of the
technology. Several empirical analyses
found that when an entrepreneur be-
lieves that the internal environment is
ready to adopt the new technology, then
there is more likelihood to use the tech-
nology (Al Awadhi and Morris 2008:
219; Venkatesh and Zhang 2010: 5–27;
Kijsanayotin et al 2009: 404–16). So, in
the small and micro entrepreneurs’ con-
text, the resource and facility are a signi-
ficant constraint, so we put forward the
hypothesis as:
H3: Facilitating condition will have a nega-
tive and significant impact on micro and
small entrepreneurs’ adoption intention of
digital technologies.
Perceived feasibility: Perceived feasibil-
ity (PF) refers to the belief of the personal
capacity to perform a job (Krueger and
Brazeal 1994: 91–104). In the context of
the current study, perceived feasibility
can be conceptualised as the degree to
which an entrepreneur perceives that
they have the experience, capability and
skill to operate the digital technologies
required for their business and build
19
COMMENTARY
operational efficiency in the post-pan- software package is used for the data
demic era (Moghavvemi et al 2016). Per- analysis.
ceived feasibility is a key factor that can
predict the entrepreneur’s perception Data Analysis
towards their ability and skill to operate The reliability of the instruments of this
the digital technologies (Venkatesh et al study can be checked by calculating
2003: 425–78). Hence, in line with the Cronbach’s alpha value. Alpha value for
above review we put forward the follow- each variable between 0.7 and 0.9 is
ing hypothesis: considered as a satisfactory to good in-
H4: Perceived feasibility will have a positive ternal consistency of the instrument
and significant impact on micro and small (Hair et al 2017). The validity can be
entrepreneurs’ adoption intention of digital checked by the corrected item—total
technologies.
correlation value of each variable—and
Methodology it should be more than 0.50 (Wolfin-
barger and Gilly 2003: 183–98).
Sample: This study employed a conveni- So, from Table 2, it is clear that the
ence sampling technique, which is a variables are consistent to measure what
non-probabilistic sampling method still actually the study intends to measure, as
used in quantitative research and this all the variables have an alpha value of
method of sampling is preferred by the more than 0.7 and the value of the total
researchers when the time and resourc- corrected item-correlation for all the
es are limited for the study (Farrokhi et al
Table 1: Descriptive Statistics
2012: 784–91). In the study, time and Characteristics
resource are constraints and accessing a Gender Male
wide target population is not possible Female
and so the researchers decided to adopt Age 18–25
convenience sampling. An online sur- 25–32
vey was conducted among the entrepre- 32–39
neurs who operate in the industrial area >40
of Bhubaneswar in the Odisha; the area Education level Graduate
was convenient for the authors to reach Postgraduate
Undergraduate
out to small and micro entrepreneurs.
Digital tools they
A digital self-administered question- want to adopt Online payment system
naire was designed and sent to the E-commerce channels
entrepreneurs through their mail. A to- Digital marketing tools
tal of 150 questionnaires were sent and Other digital tools
114 responses were received of which Source: Compiled by the authors.
100 usable questionnaires were consid-
Table 2: Cronbach’s Alpha Values
ered for the data analysis and 14 ques- Variables Alpha Values
tionnaires were rejected due to incom-
plete responses. Social pressure 0.777
Performance expectancy 0.833
Method: A multiple regression analysis Facilitating condition 0.713
Perceived feasibility 0.746
was conducted to test the conceptual
Intention to adopt 0.891
model and predict the adoption inten-
Source: Estimated by the authors.
tion (Chatterjee and Hadi 2015) and a
T-test was performed to test the hypoth- Table 3: Results of Hypothesis Testing
eses postulated in this article. In this Model 1 Unstandardised Standardised
Coefficients Coefficients
article, we measured all the independ- B Std Error
ent and dependent variables with single (Constant) .772 .271
item and the Likert scale was used to SP .019 .065
capture the responses having scale PE .231 .055
value “1-strongly disagree” to “5-strong- FC -.064 .090
ly agree.” The validity and reliability PF -.267 .064
Independent variable: Adoption intention of digital tools, P<0.05 at 95%
of each variable was also checked be- significance level.
fore the hypothesis testing. The SPSS 25 Source: Estimated by the authors.
20
variable is more than 0.5, indicating all
the variables are valid for the research.
Regression Analysis and
Hypothesis Testing
A multiple linear regression analysis was
performed using the SPSS 25 statistical
software package to test the proposed
model and examine the relationship bet-
ween the independent variables and the
dependent variable. A T-test was per-
formed to test the hypothesis.
From the result of the T-test, it is obs-
erved that all the proposed hypotheses
are found to be statistically significant.
The performance expectancy variable has
the highest effect on adoption intention
and both social pressure and performance
expectancy have a positive impact on
adoption intention, whereas the facili-
tating conditions and the perceived fea-
sibility negatively affect the adoption in-
Percentage
tention of digital tools by micro and
73 small entrepreneurs. The variance infla-
27 tion factor (VIF) value for each variable
35 is near to between 1 and 2, which signi-
30 fies that there is a low correlation be-
12 tween the predictors; hence the predic-
23 tors are free from the multi-collinearity.
37 From the above analysis it can be con-
12 cluded that the model is able to predict
51
49.6% of the variance in the adoption
52 intention of digital tools by small and
16 micro entrepreneurs in the post-pan-
20 demic era. The rest of the variance may
12 be explained by the factors not included
in this study.
Discussions and Implications
Corrected Item –
Total Correlation The objective of this study was to explain
0.611 the adoption intention of digital tools by
0.517 small and micro entrepreneurs to serve
0.532 the changing customer preferences due
0.670
to pandemic and its consequence on the
0.511
transformations in the digital economy.
The changing scenario in the marketplace
and the emerging chan-
Collinearity nels like e-commerce,
Statistics
Beta t Sig Tolerance VIF online payments, and so-
2.693 .008 cial media engagement
.021 3.42 .000 .600 2.645 are the first priority for a
.290 3.388 .001 .618 1.617 large chunk of customers
.080 2.492 .030 .445 2.247 due to enforcement of
.321 3.511 .001 .541 1.850 the social distancing nor-
ms. The new business nor-
ms like connecting with
january 21, 2023 vol lViii no 3 EPW Economic & Political Weekly

customers through e-commerce, adopting
of the digital payment system and other
technologies like cloud computing and
artificial intelligence pushed firms, rang-
ing from the micro businesses to large
conglomerates, to adopt these digital
tools. Small and micro entrepreneurs
are not lagging in terms of adopting dig-
ital tools to match with their resource
and business operations. The small ent-
repreneurs are willing to adopt different
kinds of digital tools to cater to the digital
first market. The pandemic has been ac-
celerating the digital consumption among
the consumers, and to sustain and cre-
ate value for the customers, the small
and micro companies need to assess the
possibility of using digital tools that
enable them to do so. To adopt digital
tools for their business operations, the
entrepreneurs need to consider many or-
ganisation level factors and cognitive
factors. In this study, we identified some
factors like social pressure, performance
expectancy, facilitating conditions, and
perceived feasibility which were previ-
ously studied by the researchers in dif-
ferent contexts to examine the impact of
these factors on the adoption intention
of technologies by entrepreneurs. They
were contextualised in the post-pan-
demic scenario to try and study their im-
pact on the adoption intention of digital
tools by micro and small entrepreneurs.
The findings of the study reveal that
all the hypotheses are statically signifi-
cant. The two predictors, namely social
pressure and performance expectancy
have positively and significantly influ-
enced the adoption intention of digital
tools by small and micro entrepreneurs
(T-value = 3.42 and 3.388 for SP and PE,
respectively) and these findings are in
line with some of the previous studies
(Venkatesh et al 2003: 425–78; Moghav-
vemi et al 2016). The regression coeffi-
cient for social pressure is 0.019, which
is a weak effect as compared to other
factors whereas performance expectan-
cy has the highest positive effect (0.231)
Table 4: Regression Model
Model Summary
Model R R Square Adjusted
R Square
1 .703a .496 .479
a. Predictors: (Constant), SP, PE, FC, PF.
Source: Estimated by the authors.
Economic & Political Weekly EPW
on adoption intention as compared to all
the other predictors of study taken toge-
ther. Another two predictors, namely
the facilitating conditions and the per-
ceived feasibility, have significantly and
negatively influenced the adoption in-
tention of digital tools, which means
that these two factors inhibit the adop-
tion intention of digital tools by the en-
trepreneurs.
The small and micro entrepreneurs’
adoption of digital tools in the post-pan-
demic era may be influenced by the
industry experts and other important
peers of entrepreneurs, who consistently
advise and motivate them to understand
the importance of digital tools and their
relevance in the post-pandemic business
era. The second variable that positively
influences the adoption intention in the
study is the performance expectancy
which refers to the expected outcomes
from the digital tools and this factor also
makes a significant contribution to the
adoption intention in the study. Resour-
ces and facilitating conditions are the
most important factors that persuade
entrepreneurs to adopt digital tools and
skills to manage them. In the article, it is
found that small entrepreneurs have
negative perceptions about their facili-
tating conditions and feasibility to adopt
digital tools.
This study may contribute to reduce
the knowledge gap on the adoption of
digital tools by the entrepreneurs in the
post-pandemic era. The policymakers
need to consider two factors, namely
perceived feasibility and perceived facil-
itating conditions which inhibit the
adoption intention of digital tools.
Implications
The policymakers need to formulate ac-
tion plans, by which the skill for adopt-
ing new digital tools can be improved
and developed among the small entre-
preneurs so that it helps them to manage
the digital tools and also help their lim-
ited number of employees to manage it.
The micro and small entrepreneurs need
to learn the skills and acquire the knowl-
Std Error of the edge to handle the digital tools and
Estimate
build the required infrastructure to sup-
.64121
port the adoption of digital tools. The
union and state governments should
january 21, 2023 vol lViii no 3
COMMENTARY
provide loans and incentives to improve
the digital infrastructure by small and
micro entrepreneurs within their organ-
isations, so that it will be easy for them
to adopt digital tools. The digital service
provider firms like Amazon, Google and
other technology start-ups should cus-
tomise their services by considering the
factors that make it easy to match with
the skill of small and micro entrepre-
neurs, and their limited resources. This
would facilitate them to achieve the
business excellence.
Conclusions
The post-pandemic norm is about digital
and technological advancement in the
business world. Starting from the large
conglomerate to micro business one can-
not ignore the continued shift of markets
from physical to digital means of deliv-
ering value. The cash crunch, economic
slowdown and change in the preference
of customers pushed the companies to cut
costs by adopting technologies and de-
livering value through the newly and
rapidly emerging digital medium. Large
companies are faster and proactive in
digital technology adoption, whereas
small and micro entrepreneurs are not
so proactive due to their business model
and small-scale operations. In the article
we identified the factors that influence
the adoption intention of digital tools by
small and micro entrepreneurs in the
post-pandemic era. The findings suggest
that the micro and small entrepreneurs
need to improve skills and gain the ex-
perience to manage the digital tools ef-
fectively and should build an organisa-
tional structure and deploy the required
resources to adopt the digital tools,
which can give them a substantial ad-
vantage in the post-pandemic world.
No research can be completely free
from the limitations and in this positiv-
ist research some limitations are noted.
The variables are unidimensional and
predictors are limited in number. The
sample size is also small as compared to
the earlier studies. The future research
can address the limitations by adopting
other variables, which may influence the
adoption intention of digital tools by
small and micro entrepreneurs and a
larger sample can be taken for more
21
COMMENTARY
robust findings. New studies can adopt
multivariate data analysis techniques
like structural equation modelling to ex-
plain the adoption intention with great-
er reliability and validity.
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