Given the important but largely unstudied role of contextual influences on the diffusion of innovations, theories and methodologies which take context into account are increasingly relevant. One such approach, the system of innovation approach (SIA), considers context as a network of organizations and groups involved in the production and diffusion of innovations. In addition to the focal innovation, these organizations and groups are influenced by other contexts, and so the further study of their diffusion settings extends the diffusion research agenda. To this end, we focus on a subset of the public programs involved in the diffusion of e-business innovations to small- and medium-sized enterprises (SMEs). E-business applications are complex innovations, and the need for outside assistance is especially significant for SMEs because they often lack the knowledge and resources to strategically adopt, modify, and use e-business applications. To understand how these programs influence e-business adoption, we used theories that examine the contexts around public program interventions in order to explain its form and outcome. The empirical findings suggest that many public programs fail to effectively deliver interventions because program personnel work in contexts that restrict their focus and ability to completely assess SME business needs.
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