Use of the Internet and SME Characteristics to Expand Scale and Geographic Scope of Sales

Abstract

The potential of the Internet to both geographically expand customer bases and provide a source of sales growth has led to a rapid embracement of the Internet by a majority of small businesses in the United Kingdom. However, many studies suggest that much of this adoption takes the form of simple Web sites representing little more than an electronic brochure. Although theories and models have been proposed suggesting adoption and development of e-commerce takes a staged process, with firms moving to more complex e-commerce processes after first mastering simpler forms of Web site, studies have found mixed evidence with regard to this. This paper investigates the level of Small and Medium Enterprise (SME) Web site adoption and functionality and how this relates to growth aspirations, specifically the geographical expansion of customer bases. One potential explanation for this slow uptake of true e-commerce is a lack of employees with basic and advanced IT skills. The possibility that Information Technology (IT) skills shortages could explain the gap between the Internet’s potential and the extent of involvement by a vast majority of UK SMEs is explored. Discussion within the paper is complemented with analysis of data from a large survey of SMEs.