SMEs See No Net Gain

UK SMEs are surprisingly ambivalent about the impact of the internet on their businesses, according to research released yesterday by Pipex Business and Cranfield School of Management.

Just under half of the UK’s small businesses said that the internet has increased the complexity of running a business and only 16% felt the internet had increased operational efficiency.

In addition, the survey of some 422 businesses with more than one employee found that one in three SMEs felt strongly that the internet had made it harder to protect confidential company information, while 62% said the it had also increased competition from foreign markets.

Nearly all small businesses sampled clearly felt that they could no longer do business without the internet (97% have email, 94% broadband and 84% a website).

Professor Andrew Burke of Cranfield School of Management’s Bettany Centre for Entrepreneurial Performance points out that the internet has indeed brought huge benefits to business but:

The sting in the tail is that the uptake in Internet use by SMEs has been so dramatic that most now share these same benefits and so few can garner a competitive advantage as a result.

This may be the case if one looks just at functionality like email or broadband.  There remains, however, enormous scope for competitive differentiation online for businesses of all types.  Optimising for local search and providing customers with greater opportunities to engage with a business should not be underestimated or overlooked.