Government not helping small companies with technology

A national survey released by the School of Management at Royal Holloway, University of London, has found that the Government is failing to provide small companies with helpful advice over adopting and using Information and Communication Technology (ICT). As a result, many businesses are not using ICT to its full potential.

Dr David Barnes, Dr Romano Dyerson, and Dr G Harindranath from Royal Holloway began their research project in 2007, collaborating with Nammis, a software consultancy company. The team contacted over 500 SMEs in the food, clothing, manufacturing and financial services industries, with most firms having been established at least five years. Their objective was to analyse the usage and adoption of ICT, covering the use of IT programmes such as wireless access, websites, intranet, and video/audio conferencing.

SMEs are crucial to the national economy – providing 33% of the GDP and over 50% of employment – and the adoption ICT is considered critical for the survival and competitiveness of SMEs in the emerging global market and with the advent of the digital economy. Yet the findings of the survey concluded that SMEs are failing to use the full potential of ICT in their businesses. Despite most small and medium firms being overwhelmingly in favour of ICT, their limited resources in terms of money and expertise mean that SMEs struggle to adopt and use ICT while larger firms do so with relative ease.

“SMEs find themselves in a difficult situation – too small to employ a dedicated ICT expert and lacking the resources to buy consultancy advice,” says Dr Dyerson. While firms across all four sectors reported very high usage of email and internet, very few firms embrace the potential of the internet wholeheartedly and the majority not use the internet to receive customers’ orders or to order on-line.

Despite struggling in their adoption of ICT, the survey finds that the government has failed to provide the mechanisms of support for SMEs and that these firms do not find the government helpful as a source of advice. None of the businesses in the financial sector have approached the government or local authority for advice, while results from other sectors were equally disparaging: only 3% of SMEs in the clothing sector have used the government for advice while in the manufacturing and food sectors the figures stand at 1% and 5 % respectively.

“The survey finds that SMEs are poorly served by government and policy providers,” says Dr Dyerson. “What is unclear is whether this reflects a lack of provision on the part of official bodies or is an indication of the quality of advice offered.”