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ICT adoption and ebusiness development: Understanding ICT adoption amongst ethnic minority businesses Martin Beckinsale, Monder Ram and Nicholas Theodorakopoulos International Small Business Journal published online 15 November 2010 DOI: 10.1177/0266242610369745 The online version of this article can be found at: http://isb.sagepub.com/content/early/2010/11/13/0266242610369745

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Article

ICT adoption and ebusiness development: Understanding ICT adoption amongst ethnic minority businesses

International Small Business Journal XX(X) 1–27 © The Author(s) 2010 Reprints and permission: sagepub. co.uk/journalsPermission.nav DOI: 10.1177/0266242610369745 isb.sagepub.com

Martin Beckinsale, Monder Ram De Montfort University, UK

Nicholas T   heodorakopoulos Aston Business School, UK

Abstract This paper builds upon a series of studies that have identified the comparatively low uptake of ICT amongst EMBs (Ram and Smallbone, 1999; Foley and Ram 2002; Allinson et al., 2004). Existing studies have only tentatively considered the causal factors for this lower adoption rate in comparison to non-EMBs. Within the context of a pilot study, aiming to understand ICT adoption amongst EMBs, an action research approach is adopted as a means of influencing, evaluating and underpinning ICT adoption (Beckinsale and Ram, 2006). The approach is methodologically distinctive in its utilization of action research with a critical realist approach as a means of policy evaluation; this is conducive to ‘policy learning’, and the understanding of causal mechanisms in the EMBs. Actors involved in the implementation were interviewed, as well as the business owners themselves. Another distinguishing feature is the application of Yap et al.’s (1992) schema to identify causal mechanisms, to examine actions and experiences and to understand the impact on the EMBs studied. The findings highlight the complex interaction and relationships of internal and external factors in shaping approaches to ICT implementation. Factors such as size, strategy and business age are germane but so too, albeit to a lesser degree, are cultural influences such as involvement in co-ethnic networks. Significantly, changes to particular causal mechanisms such as business support altered adoption and implementation of ICT. Distinct issues for Chinese and Asian-owned business and potentially more broadly EMBs are identified providing a framework for other EMBs. Keywords business, business support, ethnic minority business, ICT

Corresponding author: Dr Martin Beckinsale, Senior Lecturer in Strategic Management, Leicester Business School, De Montfort University, The Gateway, Leicester, LE1 9BH E-mail: [email protected]

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Introduction The role of Information Communication Technology (ICT) is viewed as critical within the economic challenges faced by government and businesses, whether small or large. ICT’s importance is often conflated with viable and competitive businesses (Levy and Powell, 2003). With the identification that Ethnic Minority Businesses (EMBs) are not utilizing ICT to the same degree as other small businesses (Foley and Ram, 2002), policy attention has been focused on how ICT can be promoted (Beckinsale and Ram, 2006) within this important element of the small firm population. Important in achieving such objectives is the understanding of why an adoption gap exists, the identification of the ICT adoption factors and whether these are contextually significant to EMBs. This paper examines data from a DTI-supported pilot initiative that aimed to examine and address the lack of adoption and utilization of ICT by EMBs. Importantly, the pilot was also formulated with the goal to understand and stimulate, through business support intervention (ChamberLink, Manchester), the adoption of ICT amongst EMBs. A number of key issues are addressed. First, extant models of ICT adoption in the ‘mainstream’ literature are employed in respect of EMBs; notable here the Yap et al. (1992) schema. Second, in line with recognition of potential diversity amongst EMBs, two particular ethnic minority groups are focused on: Pakistaniowned firms in Rusholme and Chinese businesses in Manchester’s ‘Chinatown’; such activity permits a pilot exploration of the extent to which there may or may not be distinct ICT adoption issues amongst EMBs and compared to their non-EMB counterparts. This is an area of the ICT literature in relation to EMBs that has yet to be tackled in a significant way. Finally, the action research approach has meant the researchers have been closely involved in all phases of the initiative. The aim was to fulfil the dual purpose of effecting practical change and advancing knowledge of the causal mechanisms/factors of ICT adoption in the context of ethnic minority businesses. The paper’s key objectives are: to begin to understand the potential reasons for the ICT adoption gap (i.e. the causal mechanisms for or against ICT adoption); to examine whether this gap is potentially due to ethnicity as some authors have suggested (Allinson et al., 2004); and to examine the application of an action research methodology to stimulate ICT adoption. Accordingly, studies on ICT adoption and policy towards EMBs are reviewed. The aim here is to reflect upon the key lessons from such debates for the promotion of ICT amongst EMBs. This is followed by setting out the particular elements of the action research approach and detailing the context of the pilot initiative. Five elements, reflecting the phases and interventions of the action research cycle (Thornhill et al., 2000) are presented. Conclusions and implications relating to the principal objectives of the paper are discussed in the final section.

Use of ICT by EMBs The EMB literature has suggested a limited use of ICT among Ethnic Minority Businesses and this suggestion was given greater significance by the Small Business Service (SBS) 2004 survey. Ram and Smallbone (1999) provided the first indication that there may be an issue in respect of ICT among EMBs, followed and supported by Foley and Ram’s (2002) findings. Ram and Smallbone (1999) noted that EMBs were significantly less likely to be users of ICT than white-owned firms. Only 64% of EMBs used ICT for some purpose (such as for accounts, stock control or ‘general purpose’ computing) compared with 89% of white-owned firms. Their findings also identified that 82% of white-owned micro-enterprises were using computers for some purpose compared with just 54% of EMBs in this size group (Ram and Smallbone, 1999:16). The first major study on the use of ICT by EMBs in the UK was Foley and Ram’s (2002), commissioned by the Small Business

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Service (SBS). Their findings identified a lower adoption rate than in the non-EMB population. The adoption level differed significantly with only 37% of micro EMBs having internet access compared to 75% of micro non-EMBs. Further, findings showed significantly lower rates for business website development and the use of online technologies to transform business operations such as invoicing, online ordering and payment. The SBS (2004) survey took a major step forward in understanding ICT adoption amongst EMBs. The survey, which compared 1118 EMBs with 3870 non-EMBs, noted a smaller disparity with 65.8% of micro EMBs now using ICT. Uniquely, the SBS (2004) survey also identified significant differences between ethnic groups. African Caribbean businesses’ adoption rates were comparable to their non-EMB counterparts; but Chinese business owners, at 32.9%, were the least likely to use ICT. Pakistani and Bangladeshi EMBs had a higher rate of use at 57%. Furthermore, ICT use by EMBs tends to be confined to lower level functions, i.e. PC use for word processing or accounts and e-mail. EMBs with a website were in low single figures (Chinese – 3.4%, Pakistani – 3.5% and Bangladeshi – 5.4%) compared to over 22% of non-EMBs. Although the heterogeneity of SMEs has been acknowledged to some extent by existing SMErelated ICT literature, a discussion on EMBs has been conspicuous by its absence. A significant lack of any qualitative examination and understanding of the ICT drivers and factors specific to the EMB community exists. Hence, the pilot study was conceived to begin the process of understanding the drivers and limiters of ICT adoption. In doing so research asks and begins to answer the question of why EMBs are less likely to adopt ICT compared to their non-EMB counterparts.

Factors affecting ICT adoption Before examining the limited existing understanding of ICT drivers and adoption factors amongst EMBs the extant ICT adoption literature is reviewed. Within the ICT adoption literature the drivers for ICT adoption have tended to be focused around 3 areas: perceived benefits (Poon and Swatman, 1999; Mehrtens et al., 2001) often focused on efficiency improvements, organizational/operational effectiveness and new business opportunities (Levy et al., 2005; Chapman et al., 2000) and SME promotion; organizational readiness (Levy and Powell, 2003; Merhtens et al., 2001); and external pressures (Merhtens et al., 2001). As Merhtens et al. (2001) point out; these factors influence the decisions to invest in eBusiness. Critical to the organizational readiness driver is the SME ownermanager who may be characterized as more entrepreneurial, risk taker, innovative and creative (Poon and Swatman, 1999). The influence of the owner-manager is critical in determining internet development (Beckinsale et al., 2006; Levy and Powell, 2003). Added to this is the adequacy of information systems (Levy and Powell, 2001). Finally, the external pressures focus on customers, suppliers, employees, competitors and government (Beckinsale et al., 2006; Levy et al., 2005; Poon, 2000). Yet, it must be noted that these very factors may also inhibit ICT adoption. A prime example is lack of e-mail use by customers or suppliers limiting the value to a particular SME (Galloway, 2006). Moreover, the other three categories of literature highlight a number of further key drivers as well as inhibitors. The strategic ICT literature offers a critical driver/inhibitor in firms and SMEs in particular. As Levy and Powell (2001: 175) point out, there is limited evidence of business strategy driving internet adoption among SMEs; this is further supported by Levy et al. (2005). They go on to add, ‘Strategy is rarely raised as an enabler or as an inhibitor in the literature’, but support Kendall et al. (2001) that where a need is identified within an SME this acts as a driver. The ICT literature on ‘Use’ has cited growth as a factor in the adoption and use of ICT, especially information systems (Cragg and King, 1993). This factor also supports the importance of the

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owner-manager in relation to their ‘enthusiasm’ (Cragg and King, 1993). The SME ICT literature has purported internet adoption stage models, suggesting that SMEs move through various stages of adoption that can be categorized (Willcocks et al., 2000; Poon and Swatman, 1999; Chaffey, 2007). Although these frameworks/models are potentially helpful in classifying the stages at which individual SMEs are and indicating pertinent issues, they have been subjected to well rehearsed criticism (Martin and Matlay, 2001; Storey, 1994). One of their major shortcomings is that they are far less helpful in animating SMEs as circumstances/drivers and influences vary. In short, stages models fail to incorporate the multiplicity of factors – with different degrees of influence – involved. Finally, considering the SME specific strand of the ICT literature a number of inhibitors to ICT adoption and development are prevalent, especially in micro and small firms, limiting development beyond e-mail and basic web sites (Van Akkeren and Cavaye 2000; Levy et al., 2001; Galloway, 2006). These include the cost of implementation; the need for immediate return on investment; considered complexity of technologies like Electronic Data Interchange (EDI) which could require new skills; lack of organizational readiness with many SMEs having limited existing IT resources; a lack of perceived benefits; and a lack of assertiveness by the owner-manager. Overall, the literature points to key factors influencing the dynamics of ICT adoption and use based on characteristics of the firm, information systems adopted, strategy and business intent, limited or supporting internal capabilities and external factors.

Extant reasons for EMBs’ lower ICT adoption There is a dearth of studies in the SME literature that have examined ICT adoption within the EMB community. The few published studies that have raised ICT-related issues amongst EMBs have not examined the reasons for or against ICT adoption from a qualitative perspective; they develop a detailed understanding relying purely on quantitative data. Studies include SBS (2004), Foley and Ram (2002) and Ram and Smallbone (1999). These studies are important in that they have cast some light on the disparity between EMBs’ and non-EMBs’ adoption and use of ICT. In doing so they have considered possible reasons for any disparity. Although size is correlated with ICT use (Poon and Swatman, 1999), Ram and Smallbone (1999) suggest that the lower level of computer use by EMBs could not be explained by their smaller average size. Even though the absence of comprehensive, large-scale business databases that include an ethnic variable makes it impossible to paint an accurate picture, it is widely accepted that most EMBs are not just small, but very small firms (Ram and Smallbone, 2002). ICT adoption may be more problematic for micro-businesses given that they are usually under-resourced (Premkumar and Roberts, 1999) and lack capacity to view ICT strategically (Levy et al., 2001). Therefore, other factors may be at play in influencing or inhibiting ICT adoption. Such differences between what are by any definition SMEs go to highlight the possible shortcomings of the ICT adoption literature and support the Windrum and de Berranger (2003) criticism. With the SBS (2004) data showing significant differences between cultural groups this heterogenic view of the factors may have even less credence in the case of EMBs. The previous discussion, highlighting significant differences between ethnic groups, raises a number of questions that may identify explanations that transcend ICT literature orthodoxy. The existing explanations for the disparity appear to include size, sector and age of business ownermanager. However, in respect of EMBs the argument may not simply be age as a factor but generation. Allinson et al. (2004) suggest that second generation business owners are more likely to be receptive to ICT than their first generation counterparts; recent surveys of EMBs support this observation (CEEDR, 2001; Ram et al., 2003). The children of immigrant entrepreneurs now tend

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to shy away from the self-denying life-style often demanded by self-employment, with increasing numbers of second generation South Asians (and indeed Chinese and African-Caribbeans) opting for higher education and a professional trajectory (Jones and Ram, 2003; Ram et al., 2003). This statement may well indicate a greater awareness by second and third generation business owners of technology, computers and ICT. Where the second generation does opt for business, its members are now increasingly to be found in innovative sectors, in contrast to the stereotypical low value added activities undertaken by their parents (Ram et al., 2003: 5-6). Such changes may also account for the obvious reduction in the ICT gap between the Ram and Smallbone (1999) study and the SBS (2004) study. Allison et al. (2004) undertook research on the use of ICT by EMB owners, drawing evidence from focus groups. The study dealt with 83 business owners across the UK. Allinson et al.’s (2004) study supported Foley and Ram’s (2002) point that EMB owners appear more aware of the benefits of ICT but believe there to be greater barriers to adoption. The tendency for EMBs to cluster in particular sectors is advanced as an explanatory factor by Allinson et al. (2004) and Clark and Drinkwater (2010). With the focus on traditional businesses such as restaurants there may be less inclination by EMB owners to view ICT as an integral factor to the business. Culture has been suggested as a factor (SBS, 2004; Allinson et al., 2004) and according to Straub et al. (2002) culture can have both positive and negative influence on ICT adoption. Culturespecific beliefs and values, including hierarchical social structures and preference for personal contact (Cheechi et al., 2002: 7) are viewed to be inhibiting factors where such cultural beliefs are strong. Such a factor may well account for lower adoption by EMBs where social networks and face-to-face communication is valued. Yap et al. (1992) identified social networks as a critical influence to ICT adoption, the expectation being that specific cultural traits may influence ICT adoption to varying degrees and differ by ethnicity if such a culture trait is a factor. This trait may also be evident and influence ICT adoption in relation to accessing finance and investment in the Chinese business community where family (social networks) plays a key role (Chaudhry and Crick, 2004). Therefore, a particular cultural trait to resource and investment is likely to influence ICT adoption investment. ICT research relating specifically to this factor in relation to EMBs is non-existent, although a number of information systems studies have introduced the cultural characteristic (Cheechi et al., 2002 and Straub et al., 2002). From the foregoing discussion, it is clear that EMBs are adopting ICT at a rate less than their non-EMB counterparts. Although the explanations for this discrepancy are not conclusive and the current literature does not adequately explain the discrepancy (Allinson et al., 2004: 7), their plausibility has led policy circles to consider measures for improving the uptake of ICT. This requires a clear identification, explanation and understanding of the factors that influence or inhibit ICT adoption in EMBs. The business support issue raises a further question as to whether contextually appropriate support can influence ICT adoption in EMBs. Yap et al. (1992) and CLES Consulting (2003) have addressed this question in relation to non-EMBs and the prevailing view is that business support can potentially have a positive impact. Yet, an examination of this issue from a contextual and holistic perspective has been limited.

Theoretical framework Given the lack of understanding generated in the existing literature and to ensure that the examination of EMB findings can begin to be compared with general SME ICT adoption findings a framework is necessary to ensure some sense of consistency. Yap et al. (1992) developed a schema that

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compiles successful and limiting adoption factors for ICT in SMEs. The causal mechanisms are classified under five critical dimensions: organizational characteristics, organizational action, system characteristics, internal expertise and external expertise. Yap et al.’s (1992) conceptualization aggregates a host of organizational and external factors which highlight a number of critical issues for ICT adoption by businesses. The majority of these factors support the extant EMB reasons identified. The objectives of the pilot and the paper suggest that there are deficiencies in this understanding. By using the following framework the researcher, supported by an action research context, is able to identify, if any, factors not considered in the non-EMB ICT literature. The key organizational characteristics highlighted by Yap et al. (1992) are company size, ICT experience and in-house capabilities, ICT training, financial resources, managerial resources and time. One of the major criticisms of the use of these factors has been the lack of consensus on operationalizable dimensions and categories, with many studies on SMEs using ‘nearly all conceivable dimensions’ (Windrum and de Berranger, 2003: 186). The focus of organizational action has been on the relationship between the CEO (business owner-manager) and support for ICT. Yap et al.’s (1992) research also highlighted the importance of age and experience of the owner. Palvia and Palvia (1999) suggested that age and experience are critical factors in ICT adoption success. Experience, in their research, related to Information Technology (IT) use and satisfaction gained from previous IT experiences. ( Levy et al., 2005) documented the importance of ‘strategic intent’ in relation to ICT adoption and eBusiness development, in doing so endorsing the importance of the critical factors. The ‘system characteristics’ factor of Yap et al.’s (1992) schema relates to the relationship between particular ICT systems and ‘decisional and functional problems’ (Windrum and de Berranger, 2003). The experience of small businesses that have adopted administrative applications appears to offer increased support for management control, operational control and administration (Raymond, 1985). Where ICT has not yet been adopted, IT experience through education and training is likely to support success. With regards to the ‘internal and external expertise’ factor, received wisdom suggests that the better the match between a firm’s information systems and its business strategy the greater the opportunity for ICT success. Daft (1998) points to the exploitation of internal expertise such as systems analysts to ensure plans/strategy fit with ICT adoption strategy. However, small firms rarely employ systems analysts. External expertise can be utilized to overcome internal weaknesses. Yap et al.’s (1992) research highlighted the positive relationship between the quality of external advice provided by consultants and ICT adoption. This points to the potential of business support provision in SMEs adopting ICT successfully. However, EMBs are significantly less likely to engage in formal, mainstream business support (Deakins et al., 2003). The Yap et al. (1992) schema is potentially useful in understanding the majority of key elements that influence ICT adoption. However, there has been criticism of the frameworks (Windrum and de Berranger, 2003) especially in relation to SMEs and the lack of contextually specific categorizations of ICT adoption and a lack of a dynamic understanding of the contextually appropriate enablers and inhibitors. This argument may be most agreeable in the context of EMBs and the lack of certain contextually appropriate influencers may limit its relevance by categorizing EMBs simply as SMEs.

Methodology: Evaluation through action research The Yap et al. (1992) theoretical framework is critical to the first objective of the research examining and identifying the causal mechanisms for ICT adoption; significantly, though, the North West

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Development Agency/Small Business Service pilot upon which the research discussed was based set the objective to influence ICT adoption amongst a small group of EMBs and learn from that experience. To achieve this objective and support the first objective an action research methodology was adopted. Saunders et al. (2007: 472) define action research as ‘a research strategy concerned with the management of change and involving close collaboration between practitioners and researchers’. They also add that ‘the results flowing from action research should also inform other contexts’. Saunders et al. (2007) suggest three common themes pertaining to action research. The first theme focuses on the purpose of the research, most notably the management of change. The second theme alludes to the involvement and engagement of the practitioners and researchers. In this case the researcher is not simply an objective observer in the traditional research sense and ‘the researcher is part of the organisation within which the research and change process is taking place’ (Zuber-Skerrit, 1996, cited in Saunders et al., 2007: 94). Therefore, scholars become active ‘change agents, helping to create phenomena that did not exist before’ (Kaplan, 1998: 91). The third and final theme argues that action research should have implications beyond the current project/initiative and ‘the results could inform other contexts’ (Saunders et al., 2007:94). Importantly, the final theme emphasizes the iterative nature of the action research process of diagnosing, planning, action and evaluating (Saunders et al., 2007: 141). Blumberg et al. (2008: 366) compared action research with traditional research methods and the characteristics are summarized in Table 1. They argue that the traditional methods attempt to identify general principles that are useful in explaining phenomena in different contexts whilst action research cares less about general principles. However, they do add that general principles ‘can be the outcome of a project’ (Blumberg et al., 2008:365). This raises the question of whether action research can build in the examination of general principles, in a sense adding a further purpose to the first theme. Therefore, the third theme is a crucial area of criticism of action research especially in relation to the difficulties in contextual transference. The other main criticism is associated with theme two. Mathew (2002) highlights the problems associated with the direct participation of the researcher, which, he argues, neglects the critical distance of a researcher essential to conducting good academic research. By definition, the researcher can influence change. Importantly, if following a formal action research methodology then this should take a critical perspective throughout.

Table 1.  Characteristics of Action Research Compared with Those of Other Research Methods (Blumberg et al., 2008: 366) Action Research

Traditional Methods

Addresses real-life problems and is bounded by the context Collaborative venture of researchers, participants and practitioners Continuous reflecting process of research and action Credibility – the validity of action research is measured on whether the actions solve the problems and realize the desired change

Address real-life as well as scientific problems and attempt to identify general principles and their contingencies Clear division of roles between researchers, participants and practitioners Usually clear division between the research process and implementation processes Credibility – the validity of research is established by statistical core figures and successful replications

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Figure 1. The Action Research Spiral

Source: Thornhill et al., 2000, cited in Saunders et al., 2003: 95)

In understanding the strategy for action research Thornhill et al. (2000) developed the action research spiral (Figure 1). The spiral supports the iterative process and begins with an initial idea, objective and intervention change. At this point in the spiral, Thornhill et al. (2000) strongly suggest fact finding and analysis about the change intervention to be undertaken. This fact-finding (data gathering) and analysis should inform an overall plan and decisions regarding the next steps. The approach may include qualitative or quantitative methods both formally and informally. Monitoring and evaluating are crucial through each and every stage/step leading to, where necessary, further cycles of change. The spiral supports Blumberg et al.’s (2008) third characteristic of action research: to reflect on the research (data, fact-finding and analysis) and the action (intervention, implementation and outcomes). Blumberg et al. (2008) identify ‘continuous reflection’ as a critical activity within the action research approach. Importantly they highlight both the critiquing of the research itself and the actions undertaken. The critical reflection should occur during all stages of the spiral but the researcher argues that during the planning and evaluation elements it is key. The researcher and practitioners must reflect on what works, what doesn’t or didn’t work, why and what was learnt and what is right next time. By intervening, the researcher engages in the social constructs of the stakeholders involved as well as those upon which the actions or interventions are applied. By researching the interventions and their effects, you are not only observing objects but also social interactions. Therefore, by being actively engaged the researchers learn not only about the idea itself (how to go about ICT adoption in EMBs) and how to improve it, but also the causal factors for successful ICT adoption. In so doing they ground theory in practice.

Summary of action research spiral intervention Beckinsale and Ram (2006) documented the five phases of the research activity that formed the structure of the action research approach. Importantly, the phases took into account the functioning

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of the business support provider within which the researcher, acting as a change agent, was engaged and immersed. In very simple terms, the normal intervention process was identified as: information leaflet plus marketing media sent to members and non-members; then hold an event at the Chamber Offices to introduce the initiative/support; and finally engage one to one with the business owner (usually). There was no formal outreach activity. These were identified through initial discussion with ChamberLink and fact-finding during the action research activity. The intervention changed the process to: preparing the ground; establishing a benchmark and benchmarking data; exemplar framework and events (events not necessarily held at the Chamber); eBusiness advisor engagement and grant application; and solution provider engagement. The first two would influence the interventions in the further three phases. Table 2 to 6 summarizes the phases across each factor along the action research spiral. Qualitative research and not quantitative research, is predominantly associated with an action research methodology (Maylor and Blackmon, 2005; Saunders et al., 2007). However, given the lack of data available from the business support actors and local research undertaken a quantitative first cycle of data gathering was deemed appropriate. Other than the fact-finding activity all other action research activities utilized digital recording technology to obtain qualitative data in respect to the variety of interviews, meetings and discussions that occurred amongst advisors, solution providers, business owners and the researcher. Fact-finding occurred across every phase of the methodology and delivery as summarized in Table 2, supporting the iterative process. Fact-finding not only supports the action research approach but ensures that the initially identified phases were appropriate and contextually specific. The role of the action researcher was to gather data through observing, noting and recording discussions and meetings held across the phases, to reflect on findings and work with stakeholders to develop solutions. Critical to understanding the context of the pilot, in order to ensure that the conceived idea was appropriate to the action research methodology, benchmarking was required to support the factfinding, and was justified by the lack of up-to-date data from the stakeholders involved in the pilot including ChamberLink business support. Table 3 provides a summary of the profile of each community derived from the benchmarking activity. Across each phase the plans were reflected on, prior to implementation and provided significant opportunity to transfer knowledge (see Table 4). The researchers’ input, sharing knowledge from prior ICT research was crucial (Papazafeiropoulou et al., 2002). Each planned phase was first implemented as a pilot. Importantly, each phase had what was termed ‘pilot engagements’ in order to test out the plan and implementation. The approach supports

Table 2.  Summary of Fact-Finding Across each Phase Phase One

Phase Two

Phase Three

Phase Four

Phase Five

Interviews/ Discussions with practitioners (business support delivery). This continued after every phase and before the next.

Benchmarking in order to understand the context and to update a lack of data held by the practitioners.

During events, data was presented from benchmarking also data was gathered via business support tools such as the DTI adoption ladder.

Observations and interviews between business owners and advisors.

Observations and semi-structured interviews with solution providers. Also recordings of meetings between owners and solution providers.

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Table 3.  Profile of Businesses by Community Profile

Chinatown Chinatown Details

No. of businesses identified Restaurants: Percentage Engaged

40

Retailers: Percentage Engaged

37.5%

Rusholme Rusholme Details

32 Restaurants 85 8 Retailers All were Chinese/ Cantonese 35% except three which served solely Thai or Beijing style dishes 33% of which were 43% Supermarkets with the other 67% made up equally of a very small number of Garment, Electrical, Arts and Catering supplies.

70%

47 Restaurants 38 Retailers All were Pakistani based Indian restaurants Full range of retailers including Garments, Jewellery, Supermarkets, Video and Bookshops.

Table 4.  Summary of Planned Action Across each Phase Phase One

Phase Two

Phase Three

Phase Four

Phase Five

Considered structure of delivery. Very limited, if any detail, to this structure. Revisions and development of plans across the other four phases.

Initially the researcher planned to administer questionnaires.

Hold similar events to those previously held by business support when delivering ICT initiatives and to raise awareness.

Holistic approach to developing a contextually appropriate solution for each EMB. eBusiness advisors providing advice and guidance.

eBusiness Advisors provide input to preferred ICT suppliers/ solution providers.

Table 5.  Summary of Implementation and Monitoring Across each Phase Phase One

Phase Two

Phase Three

Phase Four

Phase Five

Outreach workers implemented based on evidence from previous studies (CLES, 2003 and CEEDR, 2001)

Benchmarking was initially undertaken as a pilot to test the planned approach and the questionnaire itself. Monitoring involved those delivering and the researcher reflecting on the pilot and also the finalized questionnaire.

Pilot event in Chinatown also used to trial exemplar qualitative data gathering.

Benchmark data was made available to provide an initial guide to the eBusiness Advisors. Meetings and discussions held. Data gathered via observation and interviews during the process.

Similar to phase four although Benchmark data not provided. Some discussion between advisors and solution providers before engagement with EMBs. Monitoring involved observation and interviews.

the action research methodology providing the opportunity to further reflect, evaluate and revise (see Table 5). In order to fully monitor implementation and to ensure that revisions where made based on a ‘clear’ picture of the pilot activities, Outreach Workers and the researcher were present during all engagements.

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Beckinsale et al. Table 6.  Summary of Evaluation and Revision Across each Phase Phase One

Phase Two

Phase Three

Phase Four

Phase Five

The outreach workers, the business support deliverers and the researcher reflected on the planned activity and the activity just undertaken.

Benchmarking pilot highlighted variations in engagement. Also discussions in phase one gave rise to delivery by outreach workers rather than the researcher. Findings meant revisions to phases three, four and five.

Plans for events to be held at the Chamber of Commerce were shelved. Reflecting on operating times of businesses and a preference for locally based support. CLES (2003) suggesting the development of trust. eBusiness Advisors were informally introduced.

eBusiness Advisors would normally engage with business owners on a one-to-one basis. This was revised to include the outreach worker both as support, to assist engagement and follow up the developed ICT adoption plan on behalf of the advisor.

As with phase four the Solution providers were introduced via the intermediation of the outreach worker. For the first time eBusiness Advisors were also present at the first meetings.

Evaluation of data and previous implementation occurred formally in respect to the action research spiral but often with day-to-day communication between the researcher and practitioner. Reflecting back on the activity did not always occur at the stage suggested in the spiral due to piloting and the dynamic nature of support delivery. Table 7 summarizes the 20 cases that were directly engaged with through the action research methodology. It is these 20 cases that the findings relating to phases four and five are based upon.

Organizational characteristics of EMBs Organizational characteristics in relation to ICT adoption have been well documented except in the case of ethnic minority businesses (EMBs). The general benchmark data from Chinatown and Rusholme is presented first in relation to particular characteristics of the population and the 20 cases. It should be noted that any references to the cases at this stage relates to a time prior to any of them formally engaging with the initiative. The case EMBs in Chinatown vary between micro (25%), small (65%) and medium (10%) sized. They all use ICT to various degrees. Specifically, all participant EMBs in Chinatown were predominantly small, except for three retailers that were micro and one Chinese restaurant with 100 employees. Rusholme, with its more diverse make-up of businesses, meant a broader range of business especially within the retail sector. However, 29 of the 33 businesses in Rusholme were micro firms, which was replicated in the characteristics of the Rusholme cases. The benchmarking data, (Tables 8 and 9) provided evidence of higher ICT adoption rates than earlier studies (SBS, 2004; Foley and Ram, 2002). Assuming PC use is the first step to ICT adoption, Chinese firms (12 of the 24) were less likely to adopt ICT than their counterparts in Rusholme (28 of the 33). In relation to business size, in the case of Chinatown, micro and small businesses are less likely to adopt ICT compared to medium sized Chinese EMBs. The figures must be viewed with caution in relation to any conclusions, as 13 businesses in the sample are small and not micro. It should also be noted that the rate of website adoption is almost identical between micro and small Chinese EMBs and in fact is slightly higher in micro EMBs. In all but 4 (2 in Rusholme and 2 in Chinatown) of the 20 cases e-mail was adopted and 8 (3 in Rusholme and 5 in Chinatown) of the 20 had a website.

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Table 7.  Summary of 20 Cases Case

Est.

Employees

ICT Use

Generation

Pearl City Restaurant Yang Sing Try Thai Wing Fat Supermarket Pacific Restaurant Little Yang Sing Woo Sang Supermarket TLA Arts Gallery The New Emperor Pan Asia Restaurant Sanam Sweet House Eastern Gold Fine Foods Vernons Simply Islam Rumi Books Afareen Clothing Sylhet Travel Falcon Express SkyNet

1993 1977 2004 1996 1999 1990 1973 1984 1996 1999 1970 1985 1990 2003 2001 1998 2003 1983 1975 1978

  30 100   14    5   45   30    8    6   25   10   12    3    4    5    4    1    3    6    7    6

E-mail Website – Brochureware None None E-mail Website - Brochureware Website - Brochureware E-mail Website - Brochureware Website - Brochureware None E-mail None Website - Brochureware Website – Online Commerce Website - Brochureware E-mail E-mail and Industry ICT E-mail and Industry ICT E-mail and Industry ICT

First First Second First Second Second First First Second Second First Second First Second Second First Second First Second First

Table 8.  Summary of ICT use in Chinatown and Rusholme Business Community

PC use

E-mail Comms.

Business Website

Purchasing

Research

Sales via Internet

Chinatown Retail Restaurant Rusholme Retail Restaurant

52.5% 15% 37.5% 92.3% 69% 23.3%

45% 12.5% 32.5% 84.6% 69% 15.4%

27.5% 20%   7.5%   6%   3.5%   2.5%

20% 10% 10%   5%   3.5%   1.5%

25%   5% 20%   7%   7%   0%

0% 0% 0% 3.5% 3.5% 0%

Table 9.  Percentage ICT Use of Benchmarked EMBs by Size in Chinatown and Rusholme Community

EMB Size

% of Companies

E-mail Use

Website

Commerce

Chinatown Chinatown Chinatown Total Rusholme Rusholme Total

  1–9 10–49 50–249   1–250   1–9 10–49   1–250

  25   65   10 100%   92%    7% 100%

  28%   34% 100%   45%   85%    0%   85%

  20%   19% 100%   28%    6%    0%   31%

0% 0% 0% 0% 3.5% 0% 3.5%

ICT adoption prior to the initiative was more evident in the case of Chinese businesses, which was surprising given the SBS (2004) ICT adoption data. In Chinatown, 6 businesses had a website, compared to the much lower 2 in Rusholme (see Tables 8 and 9). A much higher proportion of

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retailers in Chinatown had a website compared to Rusholme. The evidence in Chinatown suggests that Chinese supermarkets are more likely to have websites than their Rusholme-based counterparts. These sites were all ‘brochureware’ in nature with provision of contact and find directions. Any online commerce activity, such as booking or takeaway ordering, was not available. This data and the specific case findings are discussed in more detail in the Systems Characteristics section. The only evidence of online ecommerce (Chaffey, 2007) was found in Rusholme with the notable example of Simply Islam. Reflecting on the benchmarking data, ICT experience and knowledge was identified as a critical issue in ICT adoption by businesses across both EMB communities. Further, benchmarking data indicated that all restaurants (19 of the 33 businesses) in Rusholme lacked ICT knowledge, which duly limited their understanding of ICT and actual adoption options (Poon and Swatman, 1996). This was the case in 100% of all retailers in Chinatown. However, evidence for need of ICT was apparent throughout the cases and the general EMB population, which is a critical driver to ICT adoption (Kendall et al., 2001). The following quote from a business owner made to a ChamberLink eBusiness Advisor exemplifies this point: I see the future of ICT for The Great Wall being online promotion and selling online. However, I lack the knowledge and cost may well be a restriction. (Great Wall, business owner response to Outreach Worker during phase 2)

In-house capabilities were identified as a significant barrier to ICT adoption in both communities. Although a number of characteristics may well disadvantage Chinese EMBs more than Rusholme EMBs, Chinese business owners cited language as a limiting factor when engaging in ICT development, especially when focusing on external opportunities. Therefore, their lack of English language skills delimits external orientations within the Chinese community and is perceived as a barrier to ICT adoption and use especially by first generation owners. The language barrier had made accessing any type of technology difficult. My son speaks good English but I do not so it makes things quite hard and having this sort of help [Outreach Worker] is very welcome. (TLA Arts Gallery, business owner cited in Manchester Evening News, 2005)

Not one of the businesses had an IT manager or skilled individuals with IT training. There was no evidence of ICT training either being invested in or accessed by business owners or employees. Personal learning was identified in the case of Simply Islam (Rusholme) where the business owner had acquired books/manuals to guide and develop his personal knowledge. The business owner was also educated to ‘A’ level standard and had some, although limited insight, into ICT prior to starting the business. In the case of the Yang Sing Restaurant, the largest business in the study, there was a business manager. The individual was not of Chinese origin and acted as a gatekeeper between the owner and staff. The individual was provided with time to explore possible ways for improving business processes, including the application of ICT.

Organizational action of EMBs Business owners are key to adoption in both Chinatown and Rusholme, viewing ICT as important to business development and strategy whilst being unsure of how to move forward. Identifying a need is, on its own, not enough to move forward and especially to invest. Almost all businesses, either at the benchmarking stage or the formal interview stage (phase 3 onwards), referred to barriers that

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limited their actions to adopt ICT and fulfil an identified need. The findings highlighted almost identical barriers to the general ICT literature (Levy et al., 2001) including cost, lack of time and a lack of ICT knowledge or access to ICT knowledge. The data relating to barriers further supported the organizational characteristics findings that identify in-house skills, limited ICT skills of staff and size of business as perceived barriers. When asked about ICT adoption one business owner remarked: Not of interest. The Happy Seasons is a small business and therefore ICT not that much needed. (Happy Seasons, business owner’s response to Outreach Worker having introduced the pilot initiative during phase 2)

Although far from the norm in EMBs, the outcomes of the study in Chinatown and Rusholme businesses concur with the findings of Allinson et al. (2004) and SBS (2004), that business owner age/generation, may be an inhibitor (first generation) or an adopter (second to third generation). During the event phase (phase 3) one key member of the Rusholme business community and owner of Fine Foods stated: My children are online but I rarely use it… I believe age is a contributor to internet use. Most of the businesses have been here a long time and you are unlikely to see much, if any use of the technology. Any use will be seen in the new businesses in the community. (Fine Foods, business owner’s comment during the phase 3 Rusholme event)

The business owners with this view were second or third generation British born, educated to at least ‘A’ level. The evidence is that the generation of a business owner is strongly linked to ICT adoption in EMBs; it seems that second generation EMBs are viewing ICT strategically, albeit informally. Although half of the cases had a first-generation business owner, it was noted that, equally in Chinatown and Rusholme, the sons of the business owners, acting as business development managers, were driving ICT adoption (examples were Rumi Books, Woo Sang Supermarket, TLA Arts Gallery, Sylhet Travel). Simply Islam’s business owner was very clear about his reasons for the online element of his business, alluding to a generational gap and the view that business must develop and evolve. Although I am a business owner I now have a family and enjoy other areas in my life. This business is not the be all and end all. The business potentially could run itself and therefore I would have a lot more time away from the business whilst still reaping the rewards.

Notably he stated that: My father has worked tirelessly on his business but it runs his life. I do not want that. (Simply Islam, business owner’s response to an eBusiness Advisor’s question on strategy for ICT adoption during phase 4)

The response to engagement with external sources of business support by business owners is important from a policy perspective as well as critical to the DTI initiative upon which this research is based. Business owners were asked what type of ICT support they needed. In Chinatown 18 businesses were unsure, with the other 6 identifying ICT advice, support and general ICT knowledge training. 23 Rusholme businesses also identified general ICT advice as important. The data, both from the 20 cases as well as the larger business communities, point to a lack of awareness of business support. This is significant given the number of ICT initiatives that have been available to

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SMEs since the late 1990s. Only one of the 20 cases had previously accessed business support and this was Simply Islam. The business owner approached Business Link, back in 2001, looking for information and assistance on setting up an online business. Crucial to the success of ICT adoption in Simply Islam is the fact that technology was a significant part of the business owner’s ‘strategic intent’ (Levy and Powell, 2002, 2005). It was also clear from the benchmarking and meetings held between the Chinese firm and Outreach Advisor that firms would be prepared to engage with business support providing it was tailored on-site. Of the 24 Chinese EMBs 12 agreed with the following statements: I was unaware of what the Chamber could do for me, if anything. I do not have the time to visit ChamberLink and much of the existing support the business gets happens here in the restaurant. The only way this could possibly work would be visits from advisors. I would prefer business support on site and face-to-face. (Pearl City, business manager response to a question from ChamberLink at the Chinese Event (phase 3) asking why business owners had not engaged with the Chamber previously. TLA Art Gallery, Woo Sang and Wing Fat Supermarkets, Try Thai business managers all verbally supported the response)

Certainly, in the Chinatown business community, this face-to-face, contextually specific support would offer a positive cultural bias (Cheechi et al., 2002) and therefore reduce a potential barrier to support and ICT adoption.

System characteristics of EMBs Very few businesses had ICT or Information Systems in place. The exceptions to this were all in Rusholme with the cases of Simply Islam, Falcon Express, Syhet and Skynet. However, in both communities the figures (Tables 8 and 9) highlight the limited use of ICT beyond e-mail. Where PCs were used in both communities, they provided back-office support for accounts and the production of documents predominantly for invoicing purposes. Although the ICT adoption rates are significantly higher, the examination of ICT beyond basic PC use begins to provide a picture more in line with the existing data (SBS, 2004; Allinson et al., 2004) and the statement made in the previous section by the business owner of Fine Foods. In fact, although many firms in both communities had e-mail, their experience of ICT for business needs highlighted key barriers to adoption and use: We have e-mail… [But] communication with suppliers happens through fax and phone. E-mail communication is not common. I am aware that customers are more likely to use e-mail to communicate. We are considering e-mail communications with customers possibly relating to enquiries and possibly table bookings. (Pearl City, business owner’s response to eBusiness Advisor’s question on ICT use, if any, with suppliers and customers)

Such a response was commonplace in the discussions between eBusiness Advisors and business owners, further highlighting a major barrier within the EMB communities especially in respect to suppliers, a factor that is well documented (Windrum and de Berranger, 2003 and Spectrum/DTI, 2000). Retail in Chinatown was predominantly supermarkets. A key characteristic of this sector, which gives credence to the lack of use, was the lack of ICT use among suppliers and customers supported by the Woo Sang and Wing Fat Supermarket. Suppliers to the restaurants in Rusholme are local Asian supermarkets and the same holds also true in the Chinatown context where the Woo Sang and the Wing Fat Supermarkets, which supply Chinese restaurants, are not utilizing ICT to engage in Business-to-Business (B2B) transactions.

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The adoption of business websites is significantly more pronounced in Chinatown than in Rusholme, with a higher percentage of restaurants having a website. The reasons for websites in Chinatown are clear and consistent among business owners. The previous quote from the Great Wall business owner is the standard view in Chinatown. Like e-mail however, it was evident that many had failed to make best use of the websites. Their websites, as marketing communications vehicles or booking and ordering information systems, were undeveloped, which supports the lack of knowledge in relation to how to go about achieving such objectives given their customer bases. Not one case in Chinatown was aware of search engine optimization, or further techniques, to market the site and therefore the business. The only exceptions were in Rusholme with Simply Islam and Rumi Books, both retailers. Simply Islam had evolved from an Islamic bookstore into a full online commerce business in five years through the business owner’s ambition. The owner during discussions (phase 4) with the eBusiness Advisor highlighted issues relating to ‘exceptional hard work’, difficulties in obtaining help, knowledge and ‘funds’. I soon became aware that there is a lot more than you might think to running an online business. We have had some mini disasters along the way (customer order information systems failure) – we can look back and laugh at them now, but at the time, it could have meant we lost the business. The stability of the website has also been a concern mainly due to hosting issues through third party providers. I, over the last five years, have used two hosting companies and finally I am happy with the current one.

Knowledge was derived from ‘training through books’; experience and ideas/decisions on the site often grew from examining existing websites. Initial, but limited investment came from family (i.e. purchase of PC and software). All money generated was re-invested to enable relatively rapid development of back-office systems including wi-fi scanning stock ordering, control and management. The evidence from Simply Islam is that systems are critical to success and failure and it was for this reason they engaged in the initiative. The IT system we had was adequate, but in need of updating, and security was negligible – which was dangerous when you consider we are transacting online. We work with a third party online internet payment service provider, who deal with all the payments for the goods, but our customer database, and access to our products is vital to our trading. If this goes down, or we lose data, it would be very damaging to our bottom line.

During phase 4 of the initiative it was clear that restaurant business owners in Chinatown were keen to examine better marketing online and the possibility of online table bookings with a future view to take-away ordering online. If you look at the current patronage of my Yang Sing restaurant, it tends to be the older, successful businessmen and women – the internet probably isn’t as important to them. However, to the up and coming executives, it is of the utmost importance and is possibly the first place they will look when deciding where to dine…In order to ensure we remain competitive, we need to keep our clientele informed of our offers and ensure they keep on coming back. The ideal tool for this is via a website. (Yang Sing Restaurant, business owner discussing reasons for investing in ICT and specifically developing a website during phase 4)

In Rusholme the view among all the case restaurants was to utilize a website for marketing purposes. Put simply:

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In today’s business environment it’s essential to be competitive, and that means having a good informative website. For Vernons, it means we can advertise events and special nights we have and through e-mail updates we keep the community aware of us. (Vernons Restaurant, business owner response to an eBusiness Advisor when discussing their current website at the Rusholme event during phase 3)

The restaurant owners in Rusholme felt that ICT would be better suited to business process improvements, developing better back-office efficiencies and effectiveness, which supports the higher PC use figures compared to Chinatown. The retail cases in Rusholme concurred with this view but felt the nature of retail leant itself to greater opportunities for online selling.

Internal and external expertise of EMBs The importance of the findings from phases 1, 2 and 3 were the identification of the limited internal expertise of the case EMBs, the identification of the existing level of ICT adoption and an initial insight into solutions for engagement. Further, the recognition that limited EMB engagement with business support providers could be attributed to language (CLES Consulting, 2003) and cultural barriers led to the appointment of Outreach Workers, one in Rusholme and one in Chinatown. Both were fluent in required languages and were from the communities targeted by this initiative. Engagement with Outreach Workers focused on ICT adoption and development was expected to support the development of strategic thinking around ICT adoption and assist in the development process. The link between ICT adoption and business strategy among the 20 cases was extremely limited. Only in the case of The Yang Sing Restaurant and Simply Islam was there any formal evidence of a link. The ‘gatekeeper’ or as defined by Windrum and de Berranger (2003) the ‘technology gatekeeper’ business manager at The Yang Sing shaped realistic expectations between the business owner’s strategy and benefits of ICT. However, this opportunity was not available in the other 18 cases and was a common characteristic of EMBs across the restaurant and retail sectors. Galliers (1991), Earl (1996) and Levy et al. (2001) indicate the importance of ICT success based on internal expertise, suggesting that ICT adoption and success in Chinatown and Rusholme is limited due to a lack of internal expertise. Therefore, expertise needs to come through other sources, most likely to be external. The evidence of other sources of business support varied significantly between Rusholme and Chinatown. Business support prior to the initiative was accessed through friends and family in the case of Rusholme; or in Chinatown, the Chinese Trade Association or ‘business partnerships’. There was evidence in Chinatown of 4-5 businesses working together in partnership. Each business owner is a board member and brings a variety of skills to the partnership. This structure is significant as one member of such a partnership, Pearl City Restaurant, engaged formally with the initiative acting as a knowledge worker and gatekeeper for the partnership (Scarborough et al., 1999). Through monthly board meetings the one partner feeds information, understanding and knowledge back to the other partners. In this case there is an interesting parallel with the Smallbone et al. (2006) study of Chinese entrepreneurs, which identified distinctive patterns of business and social relations within the co-ethnic community. Lee (1994) suggests that the extent to which SMEs exploit such social networks is influenced by internal cultures, which, as in the case of the Pearl City Restaurant, can encourage the sharing of new knowledge and information. Social networks, seen in Chinatown, were not evident in Rusholme. Further examination of the benchmarking data highlights the fact that over 70% of Chinese businesses, with websites, utilized Chinese web developers because of a social link.

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However, the lack of clear plans or intents are likely to limit adoption and any ICT success (Montazemi, 1988). Yet, it should be noted that there are no guarantees to ICT success through plans or strategies. The initiative acknowledged the limitation and developed a link between EMB businesses and external expertise that could fill this internal gap. As one Outreach Worker maintained: They lacked ICT understanding and awareness and my role was one of a mentor. I had to explain terms and would get asked questions by the business owners even when the eBusiness Advisor was with us. (Rusholme, Outreach Worker’s response when reflecting on his role with the business owners)

The Outreach Worker and eBusiness Advisor, in part, played an informal role of the ‘technology gatekeeper’ for each of the cases. The approach with the 20 cases was to offer a number of stages to develop strategies. There was no requirement for a case to engage in all stages but, faithful to the action research approach, each stage allowed reflection not only on data gathered but also by the cases themselves. Phases 2,3 and 4 allowed a reflective view of initial ICT choices made. The first two stages had a number of key objectives: firstly to develop trust between EMBs and business support actors; secondly, for both to understand each other; thirdly, to identify any ICT needs and issues that may influence adoption choices; and finally to develop a formal plan/strategy of adoption. The final two stages primarily brought external expertise to the cases that required it. Businesses that engaged beyond the eBusiness Advisor stage met at least with two potential solution providers that were on ChamberLink’s preferred provider list, initially on an informal basis. The activity led to a formal re-examination of the plan and a final solution was developed. In the final stage, the business owner worked closely with the solution provider to implement the ICT solution. During the events stage (phase 3) the 20 cases were classified by Internet/ICT adoption into four categories of ICT activity in EMBs, that could be mapped to the wider group of benchmarked EMBs. Table 10 presents each of the 20 cases by business community and adoption categories. 18 cases engaged in at least one stage of the ICT adoption initiative experience. Simply Islam and Falcon Express, both in Rusholme, chose not to engage with an eBusiness Advisor or solution provider. Both business owners were the youngest in the set of Rusholme cases and although, in the case of Falcon Express, they were not fully utilizing their adopted ICT they, like Simply Islam, were very knowledgeable about their requirements and actual benefits (Poon, 2000). ICT in the business is well advanced. The need to discuss choices with a solution provider or advisor was unnecessary. I can do it myself. (Simply Islam, business owner’s response to the eBusiness Advisor during a phase 4 meeting)

Formal Event EBusiness Advisor

Formal Meetings EBusiness Advisor & Outreach Worker

Informal Meetings Solution Provider, EBusiness Advisor & Outreach Worker

Figure 2.  Four Stages of Formal Support

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Formal Solution Provider

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Beckinsale et al. Table 10.  Cases Summarized by ICT Adoption Categories Categories

Chinatown Cases

Rusholme Cases

Planning ICT adoption but yet to adopt

Pearl City Restaurant Try Thai Wing Fat Supermarket TLA Arts Gallery Little Yang Sing The New Emperor Pacific Restaurant Pan Asia Restaurant Woo Sang Supermarket

Fine Foods Sanam Sweet House

ICT adopted but not making best use of what was in place (no benefits realized)

ICT adopted with some benefits but full potential not realized ICT adopted with full benefits being realized

Yang Sing Restaurant

Afareen Clothing Falcon Express Sylhet Travel Vernons Restaurant Eastern Gold Skynet Rumi Books

Simply Islam

Falcon Express, without the aid of an eBusiness Advisor, improved back-office operations through hardware additions; but still does not have a website. By installing an in-house run server to manage trans-national communications, Falcon Express realized quantifiable benefits quickly by reducing their communication costs. An 85% communication cost saving was realized, reducing the financial cost from approximately £10,000 to £1500 a year with an investment of less than £1000. Engagement through the stages varied between the two business communities. Figures 3 and 4 illustrate the businesses that engaged across the four stages suggesting disparities between the two communities. For instance, in Chinatown business owners were at the very least prepared to discuss possible plans, developed with the eBusiness Advisor, with at least one solution provider. The highest

Formal Event

Formal Meetings

Informal Meetings

Formal

EBusiness Advisor

EBusiness Advisor & Outreach Worker

Solution Provider, EBusiness Advisor & Outreach Worker

Solution Provider

Pearl City Yang Sing Little Yang Sing Try Thai Pacific Woo Sang S’market Wing Fat S’market TLA Arts Gallery The New Emperor Pan Asia Restaurant

Pearl City Yang Sing Try Thai Pacific Restaurant Wing Fat S’market TLA Arts Gallery The New Emperor

Yang Sing Pacific TLA Arts Gallery The New Emperor

Figure 3.  Four Stages of Initiative, Chinatown EMB Involvement

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Formal Event

Formal Meetings

Informal Meetings

Formal

EBusiness Advisor

EBusiness Advisor & Outreach Worker

Solution Provider, EBusiness Advisor & Outreach Worker

Solution Provider

Vernons Restaurant Rumi Books Afareen SkyNet Eastern Gold Fine Foods Sanam Sweet House Sylhet

Vernons Restaurant SkyNet Eastern Gold Fine Foods

Vernons Restaurant SkyNet

Figure 4.  Four Stages of Initiative, Rusholme EMB Involvement

proportion of solution provider activity occurred in Chinatown, which involved 7 out of 10 of businesses in discussions initially around website development, whereas in Rusholme, 3 out of 10 engaged with such third parties, with many choosing to use other third parties for purchasing hardware. The Chinatown experience suggests the advice given at stages 2 and 3 influenced individual businesses in relation to ICT solutions adopted. It was observed at stage 2 that particular solutions were discussed and before meeting with a solution provider, chosen. However, on meetings with the solution providers these chosen ICT solutions changed, e.g. Try Thai and TLA Arts Gallery. The experience of the cases with the solution providers was one of: a step by step process with each step requiring approval before we go forward. (Solution Provider’s response to a business owner when initially asked: what is the process?)

This step-by-step approach allowed the plans to be examined in detail in relation to the current business, the market, the customers and the business strategy. After discussing our plans and setting objectives we engaged with a designer and he gave me some concepts which I really liked. (Yang Sing Restaurant, business owner talking to the Outreach Worker in a follow-up meeting during phase 5) Our first thoughts were to develop a website but we wanted to improve our business productivity, and a lot of our clientele are IT savvy; that means that we can reach them, and others like them with a website. (Try Thai, business owner)

Website development was the most significant choice at the outset of the initiative but, on reflection, and as the quote from Try Thai and Pearl City suggests, productivity and therefore operations were the main sources of exploited opportunities. This was reflected in some of the ICT final solutions adopted (see Table 11). Already, I have seen results. We have started to see more business coming through our doors – which is fantastic, as that is just the desired effect!

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The EPOS system gives us control and means stock taking and ordering takes half the time. (Try Thai, business owner’s response, after phase 5, to the Outreach Worker’s question: How are things?) We always knew we wanted to look into how a website could help our business, but we found it hard to find the time to look into it and also finding the information was difficult. We want to be an information source for the community on events, as well as promoting our business. The solution provides us with the opportunity. It’s great because now we will be able to send fewer leaflets, so we can do our bit for the environment! All the information will be there at the touch of a button for our customers. (Pearl City, business owner’s response to a Solution Provider who had asked them why they had chosen a particular solution)

Therefore, the outcomes for many of the cases in Chinatown were significantly altered and improved by the engagement process. The findings suggest that awareness and knowledge of ICT has been increased. The importance of ICT in relation to business strategy in some cases has been conspicuous.

Table 11.  Summary of ICT Adoption Solutions in Chinatown Chinatown EMBs

Original Solution

Final Solution

Pearl City Restaurant Yang Sing Restaurant Little Yang Sing Try Thai Pacific Restaurant Woo Sang S’market Wing Fat S’market TLA Arts Gallery The New Emperor Pan Asia Restaurant

Web Development Web Development Web Development Hardware Web Development Hardware Web Development Web Development Web Development Web Development

Web Development Web Development Hardware - PC Web & Hardware - EPOS Web Development Hardware - PC Web Development Hardware - Server Hardware - PC Hardware - PC

Table 12.  Summary of ICT Adoption Solutions in Rusholme Rusholme EMBs

Original Solution

Final Solution

Vernons Restaurant SimplyIslam.com Rumi Books Afareen Clothing Falcon Express SkyNet Eastern Gold Fine Foods Supermarket Sanam Sweet House Sylhet

Web Development Hardware Hardware Hardware Hardware Web Development Web Development Hardware Hardware Hardware

Web Development Hardware - Wi-Fi Hardware - PC Hardware - PC Hardware - Server Web Development Web Development Hardware - EPOS Hardware - Server Hardware

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We understand just how important IT is to our business. To ignore IT would be business suicide. It would render us uncompetitive. (Pacific Restaurant, business owner)

The Rusholme case experience with the solution providers was limited. Hence, the opportunities to reflect on choices were extremely limited across all cases. ICT solutions discussed with eBusiness Advisors, therefore, were predominantly the final solutions adopted (see Table 12). Solutions were operations-based such as the Sanam Sweet House, a case that had no existing ICT. Their experience, although limited in respect to all of the activities, was very positive and promising. The sweets side of the business is now much more successful – the advice and funding from ChamberLink has helped our operations including the restaurant. It has resulted in an improved process, and this is only the first step! (Sanam Sweet House, business owner’s response to the researcher when asked how the pilot had helped the business after phase 5)

Trust is rarely cited in the ICT literature as critical to ICT adoption, which is surprising, given Windrum and de Berranger (2003: 188) do state that: ‘Trusted external sources may to some extent offset constraints of SMEs arising from limited time, financial and other resources.’ In relation to the external support provided trust was, on a number of occasions, raised as important for third party engagement similar to the findings of Lockett and Brown (2006). This was evident in both Rusholme and Chinatown. However, the issue of trust was not raised as a solution to time constraints but as a solution to overcoming a lack of understanding of the business and the market. Eastern Gold, for example, had prior to the initiative dealt with a small number of ICT solution providers with no success. I wanted to find someone that I could trust, who would listen to what I needed and what my business requires. I have finally got that – and without having to pay the earth! ChamberLink was able to recommend professional consultants that I felt had my business interests as their priority. (Eastern Gold, business owner responding to the Outreach Worker during a follow-up meeting during phase 5) It was very important we felt that we could trust the web design agency. We wanted to make sure that, they understood the business, that we got good value for money, and that the quotes were accurate so that the bills wouldn’t spiral out of control! (Pacific Restaurant, business owner’s responses in a phase 5 follow-up meeting with the Outreach Worker)

Conclusion The qualitative findings presented, reflected upon and discussed in this paper take a significant step beyond the existing evidence on the take-up of ICT by EMBs. Importantly, the identification of causal factors for ICT adoption is supported by a detailed understanding of the context. This provides both a methodological and practical framework to supporting ICT adoption, business support engagement, policy delivery and raise the economic potential of EMBs. Economically, ethnic minorities now represent 8% of the population and this continues to grow year on year (Ram and Jones, 2008; Smallbone et al., 2010). According to Deakins and Freel (2009) ethnic immigrants are of importance to the UK’s economic development. Through history they have brought new skills, practices and developments in markets and sectors that have been ignored. Figures from Ram and Jones (2008) show that, in 2004, EMBs in the UK contributed at least £15 billion (€19 billion) to the UK economy. The suggestion is that they can no longer be ignored in the delivery of

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economic related policy (Deakins and Freel, 2009) such as eProcurement and ICT adoption. But to be included the current structures for policy and application need reviewing and where necessary adapting. The research in this paper, on ICT adoption amongst EMBs and the factors that influence adoption, suggests that policy improvements would benefit EMBs and SMEs alike. It has been argued (Deakins and Freel, 2009) that EMBs, when and if engaging in policy activity, have suffered from the mechanisms in place, the delivery approach and the lack of support for specific policy initiatives. Further compounding this issue is evidence of a limited drive by EMB owners to develop awareness and engage in traditional business support. ICT adoption amongst EMBs has suffered from these particular issues along with a lack of consideration, within policy initiatives, of a business sector that has been viewed as a niche within the wider SME population. Deakins and Freel (2009) point out that lack of appropriate business support for EMBs leads to a gap in the provision of policy at the EMB level. With the increasing ICT activity at the public sector level and business support focused on SMEs engaging in ICT the general consensus is that the link between policy, support and EMBs is weak. The research findings presented identify business support, amongst a number of significant factors relating to organizational, systems characteristics and internal/external expertise, as a reason for the lower ICT adoption rates amongst EMBs. With respect to the ICT adoption literature a detailed approach to understanding causal adoption factors is undertaken in order to meet objective one of the pilot. Most crucially, the article provides a unique insight into ICT adoption amongst a sector of small firms that has been ignored and previously only examined as a subset of broader EMB research (Beckinsale and Ram, 2006; Foley and Ram, 2002). Common causal factors for why EMBs are less likely to adopt ICT included time, lack of knowledge and strategic intent and a lack of awareness of business support opportunities. However, since the work of Foley and Ram (2002) and SBS (2004) combined with the evidence from the pilot, the ICT adoption gap appears to be closing. This finding suggests that the growing rate of adoption is more in congruence with the late adopter viewpoint (Rogers, 2003) highlighted in the extant ICT literature; as opposed to simply being an ethnicity-related factor. International data reported by Laudon and Traver (2008) appear to support such findings, suggesting this is not unique to the pilot or, more importantly, the UK’s EMB population. Laudon and Traver’s (2008: 340–341) evidence from the United States states that, although not as focused in terms of ethnic groups, there was a significant closing of the ICT adoption gap between 2002 and 2007 amongst non-EMBs, Hispanic and African-American. Importantly, the findings show a convergence in the factors affecting ICT adoption amongst EMBs and SMEs generally. Critically, the findings highlight similar causal ICT adoption factors between EMBs and non-EMBs including a lack of knowledge of technology, limited awareness of where to begin, market and sector influences. Ultimately, the owner-manager is critical to change, supporting Levy et al.’s (2005) findings among SMEs in general. Change is occurring through business choice, but in the case of EMBs is currently producing only low-level ICT adoption (e-mail, websites) rather than high-level ICT adoption such as ecommerce or ICT systems development. In order to identify and develop mechanisms and structures that support policy development and delivery the methodological approach, in this context, is critical. Contemporary methodological approaches have done little to support ICT policy development for both EMBs and SMEs, with a lack of systematic research as pointed out by Underwood (2004). This particular weakness is reinforced by the traditional methods and characteristics of a clear division of roles, of process and of implementation (Blumberg et al., 2008). McDermott et al. (2008) point to traditional research on business support research being ‘particularly associated with longitudinal and comparative case studies’. It is the article’s contention that traditional ICT adoption research is quantitative and rarely combines an examination of support (Levy and Powell, 2003). Therefore,

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the methodological approach adopted and examined in this article is unique to the ICT adoption literature. Avoiding the traditional approach adds a valuable dimension to policy engagement utilizing a systematic approach within the EMB context. By using an action research approach, the findings presented in this article go beyond simply identifying the causal factors for ICT adoption and engagement between EMBs and traditional Business Support. The action research spiral (Thornhill et al., 2000) in conjunction with the developed five stages of action research (Beckinsale and Ram, 2006) provides a systematic approach to dealing with contextual specific needs. More importantly, the approach has provided a framework to develop engagement among EMBs and business support driven by tailored ICT business solutions. The reflective practice and examination, associated with action research, teases out evidence of specific causal factors in order to stimulate ICT adoption and development, grounding theory in practice. In addition, the methodological approach bridges the gap between traditional business support and the lack of engagement with EMBs. The action research methodology (Blumberg et al. 2008), fact-finding and reflection has enabled the identification of distinct issues. The degree to which these are purely due to ethnicity in a number of the factors is questioned – for instance a lack of business support awareness and engagement may well be true of the majority of SMEs. However, to varying degrees language barriers (Chinese Cases); trust (Pakistani/Bangladeshi Cases); culturally specific social networks (Chinese Cases); competition (Pakistani/Bangladeshi Cases); along with cultural values and beliefs appear, from the evidence presented, to be EMB and notably ethnicity specific. This paper has critically developed and presented applied solutions through an action research methodology. The development offers policy practitioners with a framework to significantly increase their potential to engage with EMBs. The latter meets objective two of the pilot and in doing so moves the ICT adoption and business support literature forward. The ICT literature has generally been viewed as fragmented (Galloway, 2006: 140) and lacking cohesion in the understanding of issues especially relating to SMEs, entrepreneurs and EMBs. The article begins the process of moving away from continued fragmented ICT literature and provides a methodology that begins to support the new direction, no longer simply focusing on engagement and adoption in isolation but tailoring strategic ICT development. Fundamentally, it is the contention of the authors that the methodological approach, solutions and framework presented offer opportunities for future ICT/EMB research. This is relevant in the context of current eProcurement policy initiatives, to further reduce the ICT adoption gap and improve the delivery of business support and engagement with EMBs. References Allinson G, Braidford P, Grewer N, Houston M, Orange R, Leigh Sear R, and Stone I (2004) Ethnic Minority Businesses and ICT, Focus Group Research, Durham Business School for SBS. Available at: http://www. sbs.gov.uk/SBS_Gov_files/researchandstats/EMB_and_ICT.pdf (consulted 1 March 2007). Beckinsale MJJ, Levy M and Powell P (2006) Exploring internet adoption drivers in SMEs’ electronic markets. The International Journal 16(4): 361–370. Beckinsale MJJ and Ram M (2006) Delivering ICT to ethnic minority businesses: An action-research approach. Environment and Planning C: Government and Policy 24(6): 847–867. Blumberg B, Cooper DR and Schindler PS (2008) Business Research Methods, 2nd European edition. London: McGraw-Hill. CEEDR (2001) Researching Business Support Needs of Ethnic Minority Owned Businesses in Coventry and Warwickshire. Report commissioned by the Coventry and Warwickshire Chamber of Commerce, Training and Enterprise, Centre for Enterprise and Economic Development Research, Middlesex University.

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