Ict, e-business and Small and Medium Enterprises

Assessing benefits relative to costs  

SMEs will adopt e-commerce when benefits justify establishing and maintaining the e-commerce 

system. Firms need to make realistic assessments of e-commerce/e-business opportunities, benefits and 

costs. Policy measures that, for example, encourage business associations or other groups to provide 

awareness-raising and consultation services can be beneficial. Such initiatives can also encourage SMEs to 

develop niche products and personalised services not provided by larger firms. On the cost side, open 

source software has been proposed as an economically viable solution for establishing and upgrading ICT 

systems. It can enhance system interoperability and make it easier to introduce new applications. It can 

also have the potential to develop applications specifically for SMEs, which can be cost-saving for them.  

Financing may be an issue even after identifying beneficial e-commerce/e-business opportunities. 

Many commercial factors inhibit small business debt financing including high transaction costs for small 

loans, lack of sufficient collateral and high risk in innovative start-ups and micro-enterprises. To the extent 

that this is an issue, it may be important to minimise discriminatory behaviour to improve small firms 

access to financial resources. Most OECD countries have also implemented direct and indirect financial 

supports for small businesses, some through financial institutions partly supported by the government. 

Such schemes can be effective, especially when consultation services are provided to help develop 

business strategies based on realistic assessments of benefits and costs. 

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