Barriers to Advanced Technology Adoption (AI/Cloud) in Small and Medium Enterprises in Developing Oceania Nations

Abstract

This study qualitatively identifies and analyses the primary mechanisms impeding the adoption of advanced technologies, specifically Artificial Intelligence and Cloud Computing, among Small and Medium-sized Enterprises in developing Oceania nations, with empirical grounding in the operational realities of entrepreneurs in Papua New Guinea, Fiji, Vanuatu, and the Solomon Islands. While foundational information systems have achieved partial penetration in these economies, the transition to higher-order digital technologies remains structurally inhibited by a complex, interacting cluster of barriers that existing technology adoption frameworks, most notably the Technology Acceptance Model and Diffusion of Innovations theory, inadequately capture in their original metropolitan formulations. Employing Grounded Theory methodology, the study constructs an inductively derived theoretical model of advanced technology adoption barriers through in-depth interviews with 50 SME owners, managers, and operators across the four focal countries. The emergent model identifies six primary barrier categories: infrastructural deficits and connectivity unreliability; prohibitive financial costs relative to SME revenue scales; acute digital skills scarcity at both operator and workforce levels; deficient institutional and regulatory environments; misalignment between commercially available technology offerings and local business process realities; and a culturally embedded risk aversion rooted in communal economic obligations and relational trust networks. Critically, the study investigates the role of entrepreneurial ecosystems in mediating technology adoption, finding that community-based initiatives, including peer learning networks, informal technology co-operatives, and diaspora knowledge transfer channels, consistently demonstrate higher adoption facilitation effectiveness than public sector digital economy programmes or private sector vendor-led initiatives, a finding attributed to their superior contextual legitimacy, relational trust architecture, and adaptive responsiveness to local barrier configurations. The study's emergent theoretical model, termed the Oceania SME Digital Transition Framework (OSDTF), provides a replicable analytical instrument for policymakers, development practitioners, and technology providers seeking to design contextually appropriate advanced technology adoption interventions in small island developing state economies.