Engaging SMEs in e-business: insights from an empirical study

The rapid rise of e-business has brought profound impact on, as well as significant challenges to, businesses of all sizes. The lack of anticipated engagement in e-business by small- and medium-sized enterprises (SMEs) is still a concern to the UK government. Findings from the literature appear to have revealed a contradictory picture of SMEs’ engagement in e-business. There is limited systematic research into how companies, especially small companies, are adopting the Internet technologies. This chapter reviews current research on SMEs’ e-business adoption by following various adoption models. The chapter examines the driving forces and inhibitors that affect the adoption of e-business technology in SMEs. Through interviews with 40 owner/managers in the electronic components industry, the chapter reveals that most of the small firms in this industry are at the lower level of the “e-adoption ladder”—predominantly using the Internet for searching information and e-mail. SMEs in this industry have not yet widely engaged in online transactions. The current level of adoption is driven by both internal and external factors, including operational benefits, industry common practice, and peer pressure. External forces such as a lack of push from suppliers and customers and a lack of strategic vision of using advanced e-business technology for competitive advantages have determinant effects on the level and scale of e-adoption in SME sector.