Cost as a determinant of technology adoption among small engineering firms in Kisumu city, Kenya
Akuku Caleb Nyagar, Prof. Michael Korir, Prof. Philip Nyangweso
Modern technologies offer businesses great opportunities to expand their productivity and market reach. However, technologies also pose a great challenge. The main challenge for small firms is meeting the costs of acquiring, adopting and creating human resource capacity to apply them in the production processes. This paper explores the relationship between the perceived cost of technology and the rate of adoption based on a study of small engineering firms in Kisumu city, Kenya. This study adopted explanatory survey research design. The study applied census inquiry technique to select small engineering firms within Kisumu central business district. The target population comprised owner-managers of 287 firms registered with the County government of Kisumu. Data was collected using questionnaires, structured interview schedule and document analysis and analysed descriptively. Binary logit regression was used to analyse technology adoption behaviour. Chi-square test of independence was computed to compare differences between categorical frequencies of study variables. The logistic regression model was statistically significant, χ2 (5) = 60.833, p< .000. The model explained 26.6.0% (Nagelkerke R2) of the variance in technology adoption, indicating modest improvement in fit and correctly classified 72.5% of cases. The results of the binary logistic model indicated that perceived cost of technology (p=0.001) significantly influenced technology adoption behaviour. It is recommended that the Kenya Government and other stakeholders should provide financial support to small industrialists. The government, through the Ministry of Industrialization, should also formulate policies to promote low cost technologies to enable small engineering firms to compete globally.