Drivers of digital trade adoption by SMEs in Rwanda

In the contemporary global economy, the rapid proliferation of digital technology has revolutionized the way businesses operate, communicate, and trade. This digital transformation has opened up new avenues for trade and commerce, leading to the emergence of what is commonly referred to as "digital trade." Small and Medium-sized Enterprises (SMEs), as vital components of economies worldwide, are presented with both unprecedented opportunities and challenges by this technological shift. In the Rwandan context, where economic growth and technological advancement are converging, understanding the underlying drivers that compel SMEs to adopt digital trade practices is of paramount significance. Rwanda, known for its progressive stance on technology and innovation, stands at the crossroads of harnessing digital trade's potential to elevate its SME sector to new heights. As the global marketplace becomes increasingly digitized, SMEs have the chance to tap into larger markets, streamline operations, and leverage digital platforms to expand their reach beyond geographic boundaries. However, this transition is not without complexities. Factors such as technological readiness, regulatory frameworks, access to digital infrastructure, and the adaptability of SMEs to the digital realm collectively shape the pace and extent of digital trade adoption. In the Rwandan context, where SMEs contribute significantly to the economy and employment generation, understanding the catalysts that prompt these enterprises to embrace digital trade is pivotal. By unraveling the intricate interplay of internal and external drivers, this research aims to shed light on the motivations, challenges, and enablers that influence SMEs' decisions to incorporate digital trade practices into their business strategies. Through an in-depth exploration of these drivers, policymakers, business leaders, and stakeholders can gain insights that facilitate the formulation of targeted policies, support mechanisms, and initiatives aimed at fostering a conducive environment for SMEs to thrive in the digital trade landscape of Rwanda. So, the objective of this research consists of analyzing the determinants of digital trade adoption by SMEs in Rwanda. This study adopts the perceived E-Readiness model to find out the determinants of digital trade adoption by SMEs in Rwanda. The PERM will be operationalized in estimating a profit model which include explanatory variables: Internal and external factors likely to influence the adoption of digital trade. Factors to be tested in the regression model include both internal factors and external factors. Also, a mixed-methods approach will be employed, incorporating both quantitative and qualitative data collection methods deploying web-based questionnaire will be used to collect information. A survey questionnaire will be distributed to a total of 150 digital trade companies in Rwanda. The questionnaires will be distributed in the form of closed-ended questions with a 5-point Likert scale. Additionally, focus group discussions and 2 individual interviews will be conducted to gain deeper insights into digital trade companies experiences and perspectives. The research findings will be of paramount importance to know the most influential factors to adopt digital trade by SMEs as there is high potential that adoption allow them to access large markets and lower costs. Key words: Information and communication technology, Digital trade, SMEs,