SME's in the UK Are Missing the Opportunities of E-Commerce
A recent report by the Department for Business Innovation & Skills highlighted the extent to which SMEs are embracing digital technology with many SMEs not currently making the most of the opportunities open to them by the Internet.
Research shows that fewer than a third of UK SMEs transact online, staggering when you consider than between 2003 and 2012 internet retail volumes grew by more than 6 times from £4.8 billion to £31.1 billion.
The digital economy is become increasingly important to the UK economy with the government keen for all UK businesses and organisations to trade online in order to increase revenues in both domestic and international markets.
So what is preventing more SMEs from using the internet and e-commerce for business purposes? The reasons cited include:
- lack of specialist knowledge and/ or capability
- trust issues including concerns about security an a lack of trust in available advice
- technical issues such as reorganising business processes and systems
- lack of awareness about the benefits and opportunities of trading online
Key to raising the digital capabilities of SMEs is the programmer to roll out superfast broadband which should help to increase efficiencies by lowering costs and encouraging innovation such as new ways to reach customers and analysing big data. This may also help reduce barriers to entry and encourage more start-ups.
The effects on SMEs to embrace digital technology and e-commerce depend, to a certain extent, on the nature of the business, for example, 80% of SMEs surveyed in the report said that they had no goods or services that could be ordered directly from a website or could not be booked via a website. However, there can be little doubt that more competitive SMEs who embrace e-commerce and digital technology will gain business (and even staff) at the expense of less competitive businesses.
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