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SME

SME and Internet

A 2001 survey of 1800 SMEs in Australia showed that the vast majority (90 per cent) owned a computer, 76 per cent were connected to the internet and 69 per cent had an email address. This survey showed that of those SMEs connected to the internet, 32 per cent had a home page or dedicated internet site. The larger the business the more likely it was to have a home page (87 per cent of those with 100-200 employees have a website). The highest penetration of home pages was in the hospitality sector (45 per cent). According to the same survey, the number of SMEs using the internet for procurement purposes rose significantly between 2000 and 2001. The percentage of small businesses that had placed orders over the internet rose from 17 per cent to 26 per cent over this period, while the percentage that had paid for products and services rose from 11 per cent to 23 per cent.

There is increasing evidence that a higher proportion of small to medium enterprises are using Internet-based tools to undertake common business processes. A July 2002 report showed that the proportion of small businesses that paid for products and services over the Internet almost doubled during the last year-from 23 to 40 per cent.

While Australia has been relatively successful in getting business online there is still a gap between small and medium enterprises (SMEs)(55%) and large businesses(85%).

Issues commonly cited by small businesses in engaging in e-commerce fall into three broad categories: understanding the business case, e-commerce business enablers, and security and legal issues.

Australian Bureau of Statistics:

• 1.2 Million small business in Australia
• 67% Use computers in the workplace
• 53% have internet access, of which:
  • 83% regard e-mail as the most useful tool
  • 79% have used internet for research
  • 18% have used internet for e-commerce transactions (mostly B2C)

“E-Commerce Today”(IDC report)

• A$ 12Bn in B2B transactions in 2001 (2% of Australia GDP)
• Will be A$ 170Bn by 2006 (70% annual growth rate)
• Presently over 70% of the transactions from the largest 4% of businesses.
• Low perceived value and high startup costs preventing small business participation.