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SMALL BUSINESSES FAIL TO KEEP PACE WITH TECHNOLOGICAL CHANGE

Britain’s small firms are proving slow to embrace the benefits of new technology, according to new research from the Open University.
The study reveals that a quarter of small firms (24 per cent) say they find it hard to keep pace with technological change. Incredibly, one in 10 small businesses (13 per cent) still do not use email and a third (30 per cent) have yet to use the Internet as a source of information. Less than half (47 per cent) believes that such technology has improved working life.
The study also shows that IT literacy levels leave room for improvement. Only one in ten businesses (13 per cent) said their staff had an excellent understanding of technology such as PCs and the Internet, with a third (34 per cent) saying their employees had only an ‘average’ level of literacy. One in twenty (five per cent) believe IT skills were not required in their business.
Most small businesses are not exploiting technology to its full potential, with only a third reporting that they have used the web to generate business and only 28 per cent saying that investment in IT has helped them develop new markets.

However, there is evidence that firms do recognise the value of IT, even where they are not making full use of it. Two thirds of small businesses (61 per cent) admitted they would not be able to operate without their current level of investment in IT and almost half recognised that spending on technology was vital if their business was to remain competitive. Almost half of those surveyed (47 per cent) said using IT had helped them cut costs.
Half of the small businesses surveyed said they had spent less than £5,000 on IT including computers, software and Internet connections over the past 12 months. Firms in the business services sector were the biggest spenders, with a quarter (23 per cent) spending more than £20,000 over the past year, compared to only 17 per cent of manufacturers and fiver per cent of retailers.

Commenting on these findings, David Thomson, CEO,Close Invoice Finance said, “I must say that I’m surprised at some of these findings. While I understand that it is difficult for SMEs to keep up with the pace of change in IT, I would have expected the vast majority of those surveyed to have fully appreciated the benefits technology can bring to a business.”

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