A Unified View of Enablers, Barriers, and Readiness of Small to Medium Enterprises for E-Business Adoption

Introduction

Small to medium sized enterprises (SMEs) play an important role in any country’s economy and can be considered as the backbone or engine of the national economy. The European Union has around 23 million SMEs that provide around 75 million jobs and represent 99% of all existing enterprises (European Commission, 2005). Almost 90% of the total number of businesses across the world are classed as SMEs accounting for more than 60% of employment in their countries (Hall, 2002; Organisation for Economic Cooperation and Development [OECD], 1997) and also account for 80% of global economic growth (Jutla et al, 2002). Australian figures are similar to the global figures with more than 95% of companies classed as SMEs (Data Monitor, 2004). In 2008, UK’s Department for Business, Enterprise and Regulatory Reform reported that SMEs together accounted for 99.9 per cent of all enterprises. Internationally, approximately 99.5% of all businesses have 100 or less employees while 99.8% of all businesses have 200 or less employees (OECD, 2005). In almost every country, SMEs play a vital role in contributing towards the national economy by job creation, income generation and overall competitiveness.

SMEs, worldwide, are seen as major contributors to a nation’s economy and the Gross Domestic Product (GDP) of their countries. However their contribution to the GDP has been declining over the past few years (Abernethy, 2002). With the financial turmoil that has currently engulfed most countries, this situation is unlikely to show any major improvements in the near future. The decline of SME contribution to GDP needs to be reversed by adopting some strategic goals for long term growth. To achieve long term growth, SMEs have been looking at expanding their market share by extending beyond their geographical boundaries and this is where electronic business (e-business) has come to the rescue. SMEs have been adopting e-business, in the past, for their business operations yet it needs to be adopted with more rigour and vitality to improve the situation. Undoubtedly, in today’s global networked world, e-business has the potential to become a major source of competitive advantage for SMEs. Conducting business online will help to lower operational costs, allow small companies to come at par with larger competitors on an international scale, and help serve customers more efficiently.