Environment and Planning C: Government and Policy 1999, volume 17, pages 287 302
Small firms and information and communication technologies: policy issues and some words of caution E C Fuller, A Southern Durham University Business School, Mill Hill Lane, Durham Dill 3LB, England; e-mail:
[email protected];
[email protected] Received 20 November 1997; in revised form 9 September 1998
Abstract. An area of increasing attention for policymakers is the potential for growth as small businesses take up new information and communication technologies (ICTs), This interest has added to the broad discussion on smallfirmswhich use information technology (IT) and the take-up of IT by small firms, Often it is an implicit assumption that benefits for the business will accrue as new information-processing technologies arc adopted and, accordingly, there has been a (lurry of concern over the take-up of ICTs by small firms, Much less attention has been paid within small-firms research to the policy mechanisms and programmes which are enabling take-up, and the reasons why smallfirmsshould use ICTs. It is not our intention in this paper to question the rights or wrongs of policy of this nature; rather we seek to make three main points. The first is that there is a scattered and piecemeal approach to this area, consistent with many other small-firm policy issues. We indicate the type of ICT programmes taking place, initiated by UK and European governments, and suggest that an important rationale to this rests with the notion of increasing economic competitiveness, A second point is that there is a clear distinction between the aims and ideals of ICT programmes and the perspectives of owner/managers in smallfirms.We suggest that policy has not been grounded in the experience of the small firm. The third is that there needs to be further work by small-firm researchers to develop a more rigorous conceptual base for small firms and ICTs. This needs to go beyond notions of use and towards thinking about the ways in which small firms do business in an informational economy. We draw on our previous and current work on smallfirms,local economic policy, and ICTs and the raison d'etre for this paper is that there is a place on the policy agenda for further discussion on the way smallfirmsarc being encouraged to use ICTs. Introduction In recent years policymakers and government planners concerned with economic development have sought to encourage small firms to make better use of new technologies. In one recent programme, the Department of Trade and Industry (DTI) in their Information Society Initiative (ISI), has placed an emphasis on enabling small businesses to adopt and implement new information and communication technologies (ICTs).(l) In this paper we consider the policy mechanisms and programmes which are unfolding in which the aim is to encourage small-firm take-up of ICTs. In the small-firm policy debate, initiatives which enable small firms to use new technologies have a unique position. They are not legislative and are manifest almost by stealth through other policies from European and UK governments. They do not sit comfortably in any category of policy for small firms, such as those outlined by Storey (1994). They may be described as macroeconomic policy, but they are clearly not fiscal, nor are they about deregulation or developing small-firm lobbying potential. However, they do overlap problem-specific policy (for example, programmes aimed at new-technologybased firms), and ICT policies are manifest in indirect assistance through consultancy, information, and advice. Overall, the ideal that lies behind much of the policy and (1)
By information and communication technologies we are referring to the convergence of computers, computer networks, and electronic communications such as ISDN (Integrated Services Digital Network) land lines and satellite communications, often entangled in a web of terminology such as 'informatics', 'telematics', 'the information superhighway', and so on.
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programme push for small firms to use ICTs is one of increasing UK and European economic competitiveness in a severely competitive global economy. Our first aim in this paper is to show how the scattered and piecemeal policy which often impacts on the day-to-day running of small firms is replicated in ICT programmes. This is not so much a burden, for instance developments in ICTs and the programme push are in no way comparable to the compliance burdens which small firms face, as a programme which contains many generic aims and unconnected parts which fail to deliver a coherent policy. Second, we wish to demonstrate that programmes and government-wide ICT initiatives which are directly aimed at the small-firm sector are often not grounded in the experience of small firms. By this we mean there is a clear distinction between the policymakers and programme managers as to what the small firm should be doing to be a success, and what the small firm is doing in the informational age. We use the term 'informational age' rather than 'information age' because we wish to represent the fundamental dependence by all firms on the efficient processing of information and knowledge generation. This is why new information technologies are important today (see Castells, 1996). The third point we make is that there is a need for further research into how the small firm will do business in the informational age. This is because small-firm researchers need to develop a more rigorous conceptual framework within which to investigate this area. Reliance on an information-systems approach, we would suggest, will provide only a partial understanding of how small firms might adopt ICTs and use them in their day-to-day activities. Alternatively, describing the uses of ICTs from the perspective of the small firm is a useful starting point, one which is grounded in the experience of the firm, but which can lack the analytical capability to help understand why the small firm should use ICTs. The small-firm research domain lacks the clarity of other disciplines in this respect. We seek to develop something of a critical discussion here, but would point out that we are not judging the rights or wrongs of government ICT programmes. We are arguing that this subject is an important small-firm policy issue and should not be marginalised in policy debate. In the paper we draw on our previous and current work, which has involved research and development work on small firms using ICTs, plus an ongoing investigation into the ICT policies developed by government agencies (Fuller, 1996; 1997; Southern, 1997; forthcoming).^ In the first section of this paper we look at the reasons for encouraging small firms to use ICTs. This provides a broad overview of the rationale for small-firm policy but, more importantly, here we consider the way in which the notion of competitiveness has become entwined with programmes for ICT adoption. In this section we also introduce some theoretical consideration of small businesses in the informational age. We move this on in the next section by looking at the way in which small firms are being encouraged to use ICTs. In this part of the paper we describe some of the policy initiatives from European and UK governments, and reflect on our own involvement and observation of these initiatives. We then show how there is a gap between the experience of ICT programmes and policy objectives and the experience of the small firm using ICTs. The work here provides a qualitative overview of ICTs and small-firm programmes which should be of interest to policymakers and academics alike. Small-firms policy, competitiveness, and the informational age The small-firm sector in the United Kingdom is renowned for its diversity and difficulty of definition. Our understanding of the form and shape of the small-firm sector is influenced by numbers of employees, turnover per annum, and industrial or
