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Tackling tough economic times with ICT

23 October 2008

ICT can be a platform for better performance in tough economic times and an investment to help companies emerge stronger for the future.

As the Government this week urges businesses to contact their local Business Link service for a ‘health check’, SEEDA, the South East England Development Agency, publishes a report which prompts businesses to seriously consider their use of technology.

The impact of ICT on SME’s (Small and Medium Enterprises) in the South East is the result of more than 3,500 comprehensive interviews with businesses of up to 250 staff.

The research’s primary objective was to understand how ICT is being adopted and exploited across business sectors. “The most important finding is that while roughly two thirds of SMEs are ICT adopters, only 10% of these are advanced adopters,” explained Dr Peter Waller, Head of Broadband and ICT Strategy, SEEDA.

"Given that the most significant benefits in productivity and performance are to be gained from the adoption of advanced as opposed to basic ICT applications and services, this indicates that ICT offers both adopters and non adopters alike a significant opportunity to improve their business performance."

The report provides a wealth of evidence demonstrating the value of ICT. For example, 45% of adopters have used ICT in developing new or existing products and services. Of these, 66% state that these new products/services are new to the company, and 41% that they are new to the market.

Arthur Butterfield, regional ICT Development Manager, Global Competitive Directorate, SEEDA, said: "Without ICT, the economy would be less entrepreneurial and much less advanced. However, 34% of SMEs are still non adopters. Even micro businesses can use ICT to investigate markets and suppliers and increase commercial activity. Clearly, there is a perceived lack of relevance which needs to be addressed."

The report highlights that SMEs could be more successful in the current economic climate if they sold more products online. More sophisticated ICT adoption has also been shown to have a direct correlation with success.

However, more than half of companies questioned did not know their broadband speed and a third reported on negative effects of losing connections.

More than 50 per cent of companies reported benefits from remote working such as more content staff and a smaller carbon footprint.

Personal comments from those questioned about increased ICT use included the following:

"I think it enables small businesses to compete very effectively with large businesses now, in a way that they might not have been able to do so in the past.

"The big advantage these days is that nobody knows how big you are on the web. A good website, and nobody knows whether you’ve got one person or a hundred at the other end.”

One company commented that ICT was central to growing their business and making it more profitable, whilst another highlighted ICT as an effective means of increased productivity.

"You’ve got to be able to find things quickly, you’ve got to be able to respond to customers, so you’ve got to use IT as much as you possibly can to cut down all the problems of administration, finding things – it’s as simple as that."

Arthur Butterfield concludes: "The real potential of ICT is as a tool to fundamentally change the way that businesses operate.

"Lord Carter's forthcoming research project 'Digital Britain' will analyse our digital economy with the ambition to accelerate the rate of growth and cement the UK's position as a world leader in the knowledge and learning economy.

"It emphasises broadband development and Internet as key areas. This SEEDA report demonstrates the contribution that ICT can make to the success of an SME. Communications have made large strides forward in the last 20 years. As consumers turn more and more to the internet for all their needs, businesses need to embrace the opportunities and take advantage of the reality of the new technologies."

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