E-commerce trading activity and the SME sector: an FSB perspective

This study aims to examine e-commerce within UK small and medium sized enterprises (SMEs). More specifically, it seeks to explore associations between e-commerce and internal and external antecedents including trading behaviour, owner/manager characteristics, innovation, public sector involvement, business advice and finance sources.

An 8,500+ sample derived from the 2008 UK Federation of Small Businesses survey was utilised. An OLS regression equation was generated where the percentage of sales made using e-commerce constituted the dependent variable. Independent variables were constructed for several sets of factors including innovation, business advice and sources of finance, as well as a range of owner and SME typology variables.

The results suggest that e-commerce is more strongly apparent in SMEs started from scratch and where they were involved in basic or high knowledge services or the tourist trade. SMEs undertaking e-commerce were also associated with innovation in the form of copyright, as well as public procurement with local authorities and the university sector. Specific business advice in the form of capacity, family and suppliers was also associated with e-commerce trading.

These results have implications for SMEs and public sector stakeholders. SMEs must recognise the importance of several potential antecedents such as intellectual property rights, specific business advice and finance to encourage e-commerce. Moreover, it was apparent that certain SME characteristics, namely locality and trading behaviour, were associated with effective e-commerce.

This study will be of value to academia, SMEs and key public sector stakeholders in the formulation of policy for ICT development.