Abstract
The growing focus on digital transformation within manufacturing firms highlights their potential to reshape operations and enhance competitiveness. This transformation presents opportunities for firms to innovate and streamline processes, however, the adoption of digital technologies often comes with considerable challenges. Understanding the drivers, barriers, and impacts of digital technology is essential, as they significantly inform firms' likelihood to adopt and implement these technologies in the manufacturing sector. Previous studies have examined the adoption of digital technologies in various countries. However, research targeting the South African manufacturing sector, particularly in the plastics, metal and engineering industries remains limited. A knowledge gap was revealed concerning the factors that drive the adoption of existing and emerging digital technologies in industries crucial to major commodity and trade markets in South Africa and internationally. Thus, this study sought to contribute to filling that gap. This dissertation investigated the determinants of digital technology adoption in South African manufacturing firms. To achieve this, the study employed an integrated technology-organisation-environment (TOE) and diffusion of innovations (DOI) framework (TOE-DOI). To analyse the effects of these factors on digital technology adoption, the study utilised mixed methods, including binary logistic regression with the maximum likelihood estimation technique and framework analysis to interpret semi-structured interviews. The findings reveal that the drivers of digital technology adoption include relative advantage, trialability, observability, technological capability, financial literacy, employee skills, organisational culture, managerial attitudes, and competitive pressure. Conversely, the barriers identified include technological infrastructure, complexity, compatibility, firm size, ownership structures, external infrastructure, government incentives and regulations. This study has implications for developing policies and strategies aimed at enhancing digital technology adoption in developing countries like South Africa, ultimately boosting manufacturing competitiveness. The research advocates for increased awareness of available governmental incentives with an emphasis on mandatory funding mechanisms, complementing existing skills development initiatives. These recommendations have the potential to foster further widespread digital adoption within manufacturing, both locally and globally, positioning firms to enhance operational efficiency and competitiveness.