SMEs Amidst Global Technological Changes

Abstract

In small countries such as New Zealand, small to mediumsized enterprises (SMEs) are defined as enterprises employing 19 or fewer employees. Small enterprises are defined as those employing zero to five full-time employees (FTEs) (often called microbusinesses), and medium-sized enterprises as those employing six to nineteen FTEs. Other countries, such as the United States and European countries, define their SMEs as having a much larger number of employees (200–500 or fewer). SMEs contribute significantly to the economies and to the employment levels of different countries in the world. For example, SMEs constitute around 95 percent of enterprises and account for 60–70 percent of employment within the countries of the Organisation for Economic Cooperation and Development (OECD, 1997) and other countries across the globe, including the United States. Not to forget that SMEs are usually the source of most of the profound inventions and innovations (Iacovou, Benbasat, & Dexter, 1995). Historically, SMEs have been accused of being uncritical about the strategic importance of IT and its use in their businesses. This laggardness in adopting or using IT in business was attributed to various organisational, technological, and environmental deficiencies in SMEs. The recent emergence of the Internet, in general, and the Web, in particular, revolutionises business activities (Abell & Lim, 1996) and promises to provide unprecedented opportunities to SMEs to expand in scope and in market reach. However, despite the apparent media hype (Premkumar & Roberts, 1999) and the enthusiasm among academicians (Adam & Deans, 2000; Abell & Lim, 1996; Infotech Weekly, 1997; Poon & Swatman, 1999a) and professionals (Deloitte, 2000; IDC, 1998; PWHC, 1999) about electronic commerce (EC), the published EC research portrayed a gloomy picture about EC uptake and use by SMEs. Thus, investigating reasons behind such laggardness in adopting and in using EC effectively is essential. This research attempts to highlight some of the important issues that could assist in bridging the existing divide between SMEs and EC. These issues could be of interest to SMEs and to other stakeholders interested in SMEs and EC.

Key Terms in this Chapter

IT/E-Commerce Adoption and Use in SMEs: Historically, SMEs have always been accused of being uncritical about the strategic importance of IT and its use in their businesses. This laggardness in adopting or using IT in business was attributed to various organizational, managerial, technological and environmental deficiencies in SMEs. The recent emergence of the Internet in general and the Web in particular revolutionizes business activities ( Abell & Lim, 1996 ) and promises to provide unprecedented opportunities to SMEs to expand in scope and in market reach.

Economical Importance of SMEs: SMEs contribute significantly to the economies and to the employment level of different countries in the world. For example, SMEs constitute around 95% of enterprises and account for 60% to 70% of employment within the countries of the OECD ( OECD, 1997 ) and other countries across the global including the U.S. Not to forget the SMEs are usually the source for most of the profound inventions and innovations (Iacovou, Benbasat, & Dexter, 1995 AU16: The in-text citation "Iacovou, Benbasat, & Dexter, 1995" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

Small- to Medium-Sized Enterprises (SMEs): In small countries such as New Zealand, SMEs are defined as enterprises employing 19 or fewer employees. Small enterprises are defined as those employing zero to five full-time employees (FTEs) (often called microbusinesses) and medium-sized enterprises as those employing six to nineteen FTEs. Other countries, such as the United States and European countries, define their SMEs as having a much larger number of employees (200–500 or fewer).

Small Business Internet Commerce: the use of Internet technology and applications to support business activities of a small firm (Poon, 1999 AU17: The in-text citation "Poon, 1999" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

This work was previously published in Encyclopedia of Information Science and Technology: edited by M. Khosrow-Pour, pp. 2519-2522, copyright 2005 by Information Science Reference, formerly known as Idea Group Reference (an imprint of IGI Global)