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“Blanket” approaches to promoting ICT in small firms: some lessons from the DTI ladder adoption model in
the UK
Lynn M. MartinHarry Matlay
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adoption model in the UK", Internet Research, Vol. 11 Iss 5 pp. 399 - 410
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``Blanket'' approaches to
promoting ICT in small
firms: some lessons from
the DTI ladder adoption
model in the UK
Lynn M. Martin and
Harry Matlay
The authors
Lynn M. Martin is a Research Co-ordinator, and Harry Matlay
is a Reader, both at the Knowledge Management Centre,
University of Central England, Birmingham, UK.
Downloaded by Universiti Sains Malaysia At 00:37 25 April 2015 (PT)
Keywords
Small firms, Internet, Information technology,
Central government
Abstract
The current push for small firms to be ``wired up to the digital
marketplace'' is evidenced by the number of initiatives
targeting small and medium-sized enterprises (SMEs) to
promote this activity. Like other governments worldwide, UK
Online's SME targets (together with the supporting DTI
adoption ladder) exemplify the ``conventional wisdom'' view
of a homogeneous small business sector, within which firms
take an ordered, sequential progression on the route to
Internet technology adoption. This approach is questioned by
grounding the official rhetoric in the reality of organisational
and operational complexity of this important sector of the UK
economy. These initiatives are compared and contrasted with
similar models of small firm development, most of which
neglected to address the diverse nature of small firm needs.
The authors recommend a more discriminant approach,
focused upon factors such as firm size, age, managerial
structure and information and communications technology
adoption stages.
Electronic access
The research register for this journal is available at
http://www.mcbup.com/research_registers
The current issue and full text archive of this journal is
available at
http://www.emerald-library.com/ft
Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . pp. 399±410
# MCB University Press . ISSN 1066-2243
399
Introduction
``UK Online'' is the Government Portal,
implemented to support a new campaign to
``make the Internet work for everyone'' by
developing the UK as ``one of the leading
business knowledge economies'' (DTI, 2000;
Blair, 2000). This is the latest initiative in a
series dating back to previous administrations,
as part of a drive for businesses to ``become
wired up to the global marketplace'' (Routes to
the Information Age, 1999). Targeting both
individuals and companies, it has particular
importance to the government's achievement
targets of information and communications
technology (ICT)-related goals, which reflect
those of the 2000 E-action Plan (European
Council, 2000) and earlier initiatives such as
the ``Information Society''. Individuals and
organisations should be ``online and digitally
literate'' (European Commission, 1999) so that
they can ``quickly exploit the opportunities of
the new economy and in particular, the
Internet'' (European Council, 2000). Initiatives
and accompanying policies which promote the
development of Information Society
Technologies are expected to increase the
competitiveness of European workers and their
activity in the global marketplace (ISI, 1999).
This mindset has parallels beyond Europe, with
most governments attempting to stimulate ICT
development through private sector
information and guidance. In Australia
successful involvement in the Information
Economy is seen as key to business survival
(National Office of the Information Economy,
1998). Similarly, in China the ``vibrant and
promising'' growth of Internet business use is
encouraged, with the government supplying
more information than some of its neighbouring
countries, even though the private sector
influence remains critical to this process
(Trappey and Trappey, 2001).
In the UK, the Competitiveness White Paper
set the target of increasing the number of SMEs
``wired up to the digital marketplace'', through
Web sites, e-mail and EDI, from 350,000 at the
beginning of 1998 to 1 million by 2002. UK
Online shows current UK Government targets
as including 1.5 million SMEs online by 2002,
with 1 million trading online by 2002. At the
same time, the performance of UK based SMEs
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
is predicted to become the best in the
industrially developed world. Interestingly,
being ``online'' is defined by a ``connectivity
indicator'' that defines access to a dedicated
Web site and frequent use of email or EDI.
Similarly, a business is perceived as ``trading
online'' if it has the capability to order and remit
electronically. The targets and, in particular,
the way in which they are defined, point
towards a ``generalist'' view of small firm
operation that largely fails to differentiate
between businesses of various sizes, ethnic
origin, stages of adoption, etc.
This view of small firms is also evidenced by
the model underpinning this initiative: the
Department of Trade and Industry (DTI)
adoption ladder (see Figure 1). This lies ``. . . at
Downloaded by Universiti Sains Malaysia At 00:37 25 April 2015 (PT)
the heart of governmental understanding of the
adoption of Information Communication
Technologies (ICTs) by existing small firms''
(Sergeant, 2000). The model has already been
used as the basis of an earlier bench marking
study that reviewed the progress of small
businesses on the Internet (DTI, 2000). It
purports to represents the ICT adoption
processes involved in smaller businesses.
Rhetorically, this vision is one of small firms
approaching e-Business through a series of
stages, in a well-planned, sequential process.
There is some room for organizational
differences since it is implied that not all firms
will begin the adoption process at stage one and
progress linearly through further stages.
Significantly, however, no further flexibility is
Figure 1 DTI adoption ladder UK online
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Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
built into the model in order to encompass the
impact of key factors such as size, sector,
ethnicity, gender, human and financial
resources, customer base, adoption stage and
level of internationalisation. Neither is there any
emphasis on entrepreneurial or innovative
factors or the economic contexts acknowledged
by a number of commentators. Typically, e-
commerce was found to benefit innovative
small businesses that initiate and develop new
types of business relationships (Trappey and
Trappey, 2001; Feher and Towell, 1997).
Similarly, studies in large firm context also
show ``trial and error'' approaches rather than
planned use of ICT features such as email.
(Ruggeri Stevens and McElhill, 2000, p. 280).
The model offers an explanation of how the
process takes place for existing small firms in
their exploration and development of new
communications technology. This process
views firms as starting with the simple use of
e-mail for the purpose of text messaging and
communication. Further developmental stages
build up, step by step, through to the final goal
of integrating most if not all internal processes
of a business through the use of ICT. Support
and guidance is envisaged in the same
structured way as a staged approach to
sequential development. This ``ladder'' model is
driven by the assumption that positive benefits
will result from the development of Internet-
based operations by existing small firms.
Despite earlier research that outlined a more
complex view of inhibitors and motivators for
small business ICT implementation, this
assumption continues to drive the process both
at company and national levels (Chambers and
Parker, 2000).
In addition to Pan-European initiatives to
develop individual and business ICT capacities
(see, for example, ISI, 1999; OECD, 2000), a
similar view of the Internet as a ``booster of
national economies'' can be observed across the
industrially developed world. A recent report
from Japan, for instance, claims that ``. . . the
Parliament passed a bill to try to boost Internet
use and renew the nation's struggling economy''
(Associated Press, 2000). Interestingly,
however, news reports on ICT development
have shifted dramatically from ecstatic
``electronic future'' headlines to ``gloom and
doom'' economic forecasts, especially in the
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
UK and the USA where dot.com deaths
outnumber those of the rest of the world
(Olsen, 2000). Thus, news reports such as
those showing ``50% of online businesses
already making a profit'' (Watson, 2000) must
be balanced with ``dot.coms yet to make a
profit'' statements appearing regularly across
Europe and in the USA (Olsen, 2000; Miller,
2000; Inman, 2000; Bawden, 2000). This type
of claim and counterclaim is particularly
pertinent to outcomes attributable to the
adoption of ICT strategies in smaller firms
(Elango, 2000).
For business and academic observers, the
noticeable paucity of relevant literature is
particularly frustrating and tends to render the
current ICT debate largely dogmatic and
Downloaded by Universiti Sains Malaysia At 00:37 25 April 2015 (PT)
ineffective (Fallon and Moran, 2000; Hepworth
and Blizzard, 1996). There exists an obvious
lack of empirically rigorous data and focused
research on this topic, which ultimately leaves
the issue of whether ICT is ``crucially
beneficial'' to small business strategies open to
the influences of rhetoric and speculations. For
example, in the UK, the DTI literature claims
that the adoption and implementation of new
technologies is essential to the survival and
growth of the economy, in general, and the
small business sector, in particular. What it fails
to outline, however, is the empirical evidence
upon which such sweeping generalizations are
made and future policies will be based.
Disadvantages of using linear models
The actual design of the linear model of ICT
adoption by small firms may itself be
problematic. Most attempts to use linear
models to explaining small firm economic
activity tended to oversimplify complex issues
and circumstances (Kai-Uwe Brock, 2000) and
their effectiveness and generalization has also
been questioned (Matlay, 1999a). Both Wolfe
(1994) and Fallon and Moran (2000) queried
the use of simplified linear approaches to
analyse innovation in the context of complex
processes identified at macro-economic level
which were either ignored or left unidentified.
Similarly, recent studies reviewing the
internationalisation factors affecting small firms
indicated that globalisation processes would not
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Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
follow a linear model or a sequential path
(Matlay, 1999b). Furthermore, while some
firms were born international others remained
locally focused and/or rooted (Fletcher, 2000;
Kalantarides and Levanti, 2000). Given the
assumption that ICT is vital for
internationalisation as companies compete in
an increasingly global marketplace as well as the
nature of embedding such technologies through
innovation and change, these studies are
particularly relevant to the debate.
Thus, a linear model may seem attractive as a
simplified way to describe ICT adoption and
use. Nevertheless, it may fail to illustrate the
pertinent and complex process that may take
place at micro level within individual small
firms (Fallon and Moran, 2000). Effective
adoption and implementation of ICTs in
smaller firms may rely more on individual
factors such as organisational size, structure and
mix of available resources. For example, Supri
et al., (2000) found that technological change
and its implications on small firm strategy will
make ICT even more important and that the
knowledge and skills of both management and
workforce are likely to be the key to competitive
differentiation. Interestingly, however, training
and development for skill ownership at
particular ICT levels are implied in the
background to the adoption model but not
identified explicitly as rungs on the ladder or
the stage-to-stage progression to
implementation in smaller firms.
Small firm size and sector diversity
Other difficulties in using linear, generalised
models might result from its application to a
target that exhibits the inherent diversity of a
small business sector, where variety can lie in
size, economic activity, geographic position,
resource availability and ICT adoption stage.
The importance of understanding how large
and varied the small business sector can be has
been emphasised by earlier commentators who
stressed the need for researchers to differentiate
between groups within it (see Table I). Penrose
(1959), and later Hawkins and Winter (1996)
and Hawkins et al. (1995) pointed out that
because of its size and diversity, research results
cannot be easily generalised across all small
 ``Blanket'' approaches to promoting ICT in small firms Internet Research: Electronic Networking Applications and Policy
Lynn M. Martin and Harry Matlay Volume 11 . Number 5 . 2001 . 399±410

Table I Sample definitions of relative size for ``small'' firms (taken from Martin, 1999)
Source Size as a means for small firm comparison, support or definition
Bolton Report (1971) Size differences are also accentuated when compared across business sectors
Cut-off point of 200 or less employees appropriate for ``small'' manufacturing
firms, while 100 is a small firm in paper, printing, publishing, leather, timber
and furniture firms, and 500 for food and drink ``small firms''
Bannock (1981) Commented on the difficulty of comparing and defining ``small'' firms across
national boundaries, especially since these may vary in size from one country
to another
Ganguly (1985) Differentiated between ``Establishments'' with 20-199 employees and
``Enterprises'' with 10-19 employees in an attempt to compare international
data on SMEs
Brown et al. (1990) Firms employing less than 500 employees in their categories of ``small''
businesses
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Stanworth and Gray (1991) Despite expressing reservations about ``500'' as a maximum size for small
firms, later reviews of this report still accepted this
Curran et al. (1991) Warned against using a single size criterion and expecting to obtain a similar
sample as owner-managers frequently may have little or nothing in common
in terms of problems encountered or business relations engaged
Burns and Myers (1994) Survey of 8,000 European SMEs with divisions as chosen larger than normally
accepted in the UK. Within this differentiated three groups of ``small firms'' ±
up to 50, 51-200 and 200+
Clements (1994) 250 chosen as the upper limit but caution is expressed about comparing this
data with that gathered in other countries due to the different ways of
recording a business as independent or not, small or not, craft -based or not
in different countries
Institute of Chartered ``Large'' ``small'' and ``very small'' firms all within the small business sector.
Accountants (1995) Here ``very small'' SMEs had less than 20 employees, ``small'' SMEs were
between 20-50 employees while ``large'' SMEs encompassed 21-499
employees
Parker et al. (1995) Distinguished between SSEs (small scale enterprises with 6 to 49 workers) and
MSEs (micro-enterprises with 1 to 5 workers) in African study
Neitzert (1996) Neitzert (1996) focused on those with five or fewer workers (African study)
Hales et al. (1996) In UK specific sector study of hospitality-based companies, 50 was suggested
as the upper limit
Casson (1996) Cautioned that equating companies by size without looking at sector may also
lead to difficulties given differences found in management style between
companies of similar size but within different business sectors
Hyland and Matlay (1997) Distinguishing within the size ranges found that 78 per cent were ``micro-
enterprises'' i.e. less than ten, within a sample of 1,986 firms
OECD, 2000, 1997, 1996 Reports focus on ``less than 500'' as the measure of a small and medium size
company (2000, 1997, 1996)
EU/ESF definition, 2000, Definitions of an SME have ``less than 250 employees'' as their upper limit
1999, 1998; European across all sectors although 98 percent are micro enterprises, i.e. less than ten
Council, 2000

402
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
firms. Similarly, Chittenden et al. (1993)
recommend focused targeting in order to
recognise the more specialised requirements of
established small businesses. Hyland and
Matlay (1997) called for further discriminant
research of micro and small businesses in order
to identify specific needs within this sector.
In terms of small firms and ICT, Poon and
Swatman (1997) cautioned that research into
Internet applications might differ from previous
studies involving small businesses and their use of
ICT. Fallon and Moran (2000) also found
significant links between the size of a firm (in
terms of number of employees and number of
sites) and the intensity and/or level of ICT
activity, but showed that ICT usage varies not
only across sectors (i.e. across SIC codes) but also
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within constituent sub-sectors, perhaps due to
size variation, measured as number of employees,
turnover level or asset value (Matlay, 2000).
It is often argued that to use a blanket model
focused on ``firms with less than 250
employees'' (Sergeant, 2000) ignores the
generalisation and standard error difficulties
highlighted by a number of researchers. Size-
and sector-related variations were not found to
be localised or country specific (Matlay and
Fletcher, 2000). The results of a large, pan-
European survey have shown that the relative
size and position of a firm directly reflects upon
ICT adoption rates and intensity of usage
regardless of the geographical spread or the
target market (Routes to the Information Age,
1999; DTI, 2000). The relatively smaller size of
the average organisation has been identified as
the main factor for lower adoption rates of ICTs
in France and Italy. In these countries, the
prevalence of small, single sited businesses is
reflected in the comparatively lower penetration
of ICTs (Route to the Information Age, 1999).
It has been established that smallest companies
(i.e. micro-enterprises with fewer than ten
employees) are least likely to be involved with
e-commerce and/or the Internet (ISI, 1999).
This research, however, appears to ignore
sectoral differences in terms of operations and
e-commerce trade factors (Schuknecht and
PeÂrez-Esteve, 1999). Those micro-businesses
that specialise in the provision of business
services (particularly knowledge intensive,
service organisation) are more likely to adopt
ICT than similar sized manufacturing firms.
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Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
Effects of firm location upon ICT adoption
and usage
Given the emphasis on wider and more rapid
adoption of Internet technologies in countries
with dispersed rural populations (IST, 2000,
ch. 2), it follows that the experience of
companies in rural and urban areas might also
differ. Potential growth in ICT usage might
lead rural communities to become
``Telecommunications Enhanced
Communities'' (TECs) (see, for example,
Wilde and Swatman, 1999a, 1999b).
Furthermore, rural communities are expected
to benefit considerably from the recent
expansion of ``commercial niche market''
opportunities, including a growing interest in
locally sourced food, marketed mainly via the
Internet (typified by Sparkes and Thomas,
2001). In theory, isolated groups will benefit
from improved communication since it will
allow expansion into national and international
markets via e-commerce while raising the
quality of social and medical services (Wilde et
al., 2000). In practice, however, there have
been mixed outcomes attributable to wide scale
ICT implementation. Better integration with
the wider world has been accompanied by
changes undermining the cohesion and
independence of some of these communities
with mixed influences upon the individuals
living and working in them (Wilde and
Swatman, 2001).
Typically, the experiences of rural firms in
Britain show little support for the accepted
model of ``business empowerment'' through
ICT (Martin, 1999; Martin et al., 2001). Rural
firms still face considerable difficulties
connected with their location, regardless of
their chosen sector of economic activity, and
these appear to affect all but the largest
organisations. Most businesses that operate in
rural areas are less likely to have access to cable-
based Internet links (CPRE, 2000; Martin et
al., 2001). They are also less likely to have
access to both training and awareness events
that promote the use of ICT (MAFF, 2000;
Martin, 2001). Furthermore, smaller firms
operating in rural areas are less likely to possess
the necessary human and financial resources
needed to develop and support ICT and related
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
activities (Martin, 2001; Martin et al., 2001;
MAFF, 2000; ACRE, 2000).
Surveys of new technology adoption in the
West Midlands region of the UK have shown
that businesses located in rural areas usually
have less access to ICT advice, and in particular
to specialist support in relation to its adoption
and implementation. Most appear to rely upon
biased and partial advice from organisation that
supplies the hardware. Such difficulties often
resulted in the purchase of ``off the shelf'' Web
sites as a first tentative step into ICT adoption.
Only in the few cases where rural extranets had
been set up did micro-enterprises mimic the
adoption ladder, using communication by e-
mail as their first implementation step and
moving on to selling to each other as part of this
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process (Martin, 2000; Leavy, 1999). The
difficulties faced by rural firms are not reflected
in the linear DTI model, nor are their
experiences identified as a potentially different
or alternative process. European regeneration
funding in the UK West Midlands has
connected large numbers of urban small firms
by cable and other links but no parallel
development exists for rural firms. Despite the
rhetoric about the need to meet social exclusion
and rural deprivation issues, the focus still
remains on inner city ICT support. Basing
business support on portal technology is seen as
a way to increase access opportunities for all
small firms but this neglects those organisations
that do not have Web access or the
understanding to utilise the access that they
already have (Martin, 2000; Peet et al., 2000).
Does the purchase of hardware equal
adoption of ICT?
According to recent G8 surveys, Internet use is
increasing, with connectivity targets being met
across Europe and with related interventions
being focused upon the technological aspect of
ICT (DTI, 2000). Participation in the ``New
Economy'' is identified in terms of ownership of
equipment, a standard of measurement that can
facilitate both national and international
comparisons. These benchmarking
measurements appear to show that most
European countries are closing the gap with the
USA and Japan in terms of ICT hardware and
404
Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
applications. Similarly, participation by smaller
firms is calculated by means of equipment
ownership. Currently, it appears that 67 per cent
of all small and medium-sized enterprises own
PCs with modems and 44 per cent of these have
Internet access. Ownership of ``Web sites'' can
also be measured in order to identify the number
of businesses with at least one Web site. As a
result, it became obvious that small firms
employing fewer than 100 individuals are unlikely
to posses a website of their own (ISI, 1999).
Importantly, however, those reports that
purported to show a substantial increase in the
ownership of appropriate equipment should be
treated with caution, in particular when such
data is used to quantify ICT adoption in the
small business sector of the UK economy.
Much of this data simply measures the
purchase of relevant hardware and not the
actual use of ICT amongst smaller firms in this
country (Thelwall, 2000; Oftel, 2000; Peet et
al., 2000). Moreover, the relative increase in
the ownership of ICT-ready equipment
documented throughout 1999 may have been
prompted by other, unrelated factors such as
the need for smaller firms to develop strategies
and upgrade hardware in order to cope with
the ``Millennium Bug''. Companies complying
with Y2K requirements laid down by supply
chain partners or financial bodies as part of
``Millennium Bug'' avoidance strategy did not
necessarily purchase advanced or upgradeable
hardware in order to gain Internet access.
Most of these firms were left wondering what
to do with their expensive and under-utilised
new hardware (Martin, 2000, 2001). The
intense pressures on small firms to comply
with Y2K requirements were evidenced in the
most industrially developed countries, in
particular in the USA, UK, and Japan (Leach
et al., 1999). It is less clear, however, what
proportion of these smaller firms actually
managed or intended to utilise their newly
acquired hardware for purposes related to ICT
and/or the emerging ``Global Village'' (Matlay
and Fletcher, 2000).
The importance of human capital
It usually falls upon the small business owner/
manager to recognise opportunities and threats
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
within their chosen target market (Matlay,
2000; Culkin and Smith, 2000; Darby, 1997).
The reactive or proactive approach of owner/
managers to rapid technological changes in the
marketplace is crucial to ICT adoption and
implementation; managerial commitment and
perceptions of ICT benefits are key features in
this process (Poon and Swatman, 1997). The
role of vocational education and training
(VET), work experience as well as information
acquisition and analysis have been identified as
key factors affecting the decision making
processes in smaller firms. These apply equally
to operational, financial and ICT-related
decisions in this type of firm. Management
skills and relevant experiences become vitally
important to the decision-making process
Downloaded by Universiti Sains Malaysia At 00:37 25 April 2015 (PT)
relating to the timely adoption of new
technology. In this context, a positive attitude
to VET and sound information gathering skills
were found to considerably reduce ICT related
adoption costs and uncertainty, thereby raising
the likelihood of early implementation of new
technology (Thomas et al., 1991). Whether the
UK small business community has sufficient
human capital in this area has been questioned
in recent official reports that focused on topics
such as the information age and lifelong
learning (Matlay, 2001).
A need for key managerial understanding and
support was stressed by Chapman et al. (2000)
who acknowledged the requirement for detailed
business analysis to accompany ICT-based
support. This view was also supported by Poon
and Swatman (1997) who argued that to apply
entrepreneurship to Internet use, a small
business should carry out both internal and
external market analyses in order to map and
match Internet capabilities to organizational
resources and market needs. Governmental
solutions include Learndirect, local UK portals
offering advice, training and information as well
as online learning opportunities supported by
European funds (i.e. via European Social
Funding; European Regional Development
Funds). The connectivity theme was also
present in support programmes, funded
through UK or EU funds. Typically, however,
there is an acute lack of engagement on behalf
of small business owner/managers who are
largely suspicious of government interference in
industry (Matlay, 2001) and believe their firm
405
Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
to be ``unique'' (Culkin and Smith, 2000;
Lightfoot, 1996). This is not a new
phenomenon nor are the attitudes of owner/
managers likely to change in the near future
(Martin, 2001; Matlay, 2000; Hyland and
Matlay, 1997).
The need for support to be direct and specific
(Martin, 1999) is best summed up by the words
of the owner/manager of a West Midlands
engineering company:
The government sets these things up but never
talks to small firms like us about them. Then it sets
up more layers of bureaucracy to maintain and
administer these ideas, when simple direct help to
companies in specific circumstances would be
much better.
In terms of ICT adoption and use, the
frustration of the manager of a small
manufacturing firm add another dimension:
We know it's something we should do, everyone
keeps telling us that, the press, the government, all
these training people . . . But the problem is that it
means nothing to us, it has nothing to do with our
company. All the stuff I'm getting at the moment is
about upgrading equipment or about surfing the
net, well ± before I even think about email or any of
those things I want to see how it is going to make a
difference to my company.
Blanket vs differentiated ICT provision?
Given the paucity of academic research in this
area, it seems appropriate to reinforce the
suggestions made by Kai-Uwe Brock (2000,
p. 406) when summarizing the current position
in relation to ICT and small firms. The author
argued that further research is necessary in
order to develop real understanding of the ICT
adoption processes in small firms, with a
focused group approach to include ``size of
firm, age of firm, stage of adoption and
dependent variable''. Similarly, echoing earlier
research by Lauder and Westhall (1997) and by
Iacovou et al. (1995), Blackburn and Athayde
(2000) identify not only size and sector but also
level of internationalisation, types of exporting
activities, awareness of benefits, types of
customers, and imposition by larger trading
partners. It is also suggested that in addition to
measures developing technical infrastructure
and security systems, specific support schemes
should be implemented for various classes of
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
small firms. These would facilitate and/or
upgrade the managerial as well as specific ICT
skills of small firm owner/managers. The
importance of high IT capability (including this
key human capital factor) is indicated by
Bharadwaj's (2000) study, showing that high
IT- capable firms outperform others on profit
and cost-based performance measures.
Small firms can be seen as individual
components of a large and diverse sector, where
the managerial knowledge, skills and experience
of owner/managers could make the crucial
difference in grasping the new opportunities
offered by the World Wide Web (Matlay,
2000). In practice, however, larger and more
successful firms are most likely to notice new
ICT related opportunities (see, for example,
Downloaded by Universiti Sains Malaysia At 00:37 25 April 2015 (PT)
Elango, 2000, p. 5). Interestingly, the more
sophisticated ICT users, such as those offering
``knowledge intensive'' business services, may
already rely on advanced Web sites and
customer solutions (Martin, 2001). Other small
firms may be evaluating ICT possibilities and
need clear external guidance on the way in
which these would become relevant to their
competitive edge (Elango, 2000; Martin,
2000). Chapman et al. (2000) argue for the
need of detailed business analysis to underpin
all Web-related advice. They claim that most
managers who lack in-depth understanding of
ICT and its potential benefits could benefit
considerably from ongoing help to link new
technology to specific operational aspects of
their organisations. It follows, therefore, that
support for the development of e-commerce
appropriate for larger or more entrepreneurial
small firms would differ considerably from that
needed by smaller and less entrepreneurial
businesses (Martin, 2000).
The expectation that the Internet could
provide entrepreneurial small firms with key
opportunities to reach new niche markets has
been reflected in many of the initiatives aimed
at developing ICT resources and capacity, with
some unpredictable results (Forster, 2000;
Poon and Swatman, 1999). Many firms that
lack international awareness do not perceive
their operations in international or global terms
and have therefore avoided the Internet as a
result. ICT is seen as inappropriate for their
needs as they typically only serve UK-based
markets (Matlay and Fletcher, 2000; Martin,
406
Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
2000). The rise of B2B across national and
geographical boundaries has sharpened the
need for small firms to understand how to reach
national markets electronically in order to either
increase or avoid the loss of market share
(Routes to the Information Age, 1999). Thus,
without differentiating between firms, a blanket
approach to ICT implementation and
development might fail to promote ``electronic
competitiveness'' amongst those small firms
that might need it most (Martin, 1999, 2001).
In those small firms that lack international
awareness, the ideas, awareness and ICT
capacity of managers and decision makers may
also need to be expanded. Human capital in
these organisations has been identified as a key
factor to enable them to recognise opportunities
and adopt ICT to exploit them. Karahanna et
al. (1999) have highlighted the importance of
perceptions of ``usefulness'' throughout pre-
and post-adoption stages. Thus, those firms
with lower ICT understanding and knowledge
usually have considerable problems in
identifying and/or fully appreciating the
``usefulness'' of ICT at implementation and at
each stage of development. Significantly,
however, perceptions of ``usefulness'' may also
be affected by individual factors such as gender,
(Venkatesh and Morris, 2000; Gefen and
Straub, 1997), context (Johnson and Hignite,
2000) and educational background (Martin et
al., 2001; Hyland and Matlay, 1997). Typically,
however, such issues appertaining to the
development of understanding, usefulness and
relevance are not usually addressed by most of
the current initiatives aimed at increasing the
ICT capacity of smaller firms (Martin, 2000,
2001; European Commission, 1999, 2000).
Without seeing SMEs as a diverse collection
of individuals and/or groups at various stages of
ICT awareness and understanding current
initiative cannot reasonably discriminate and
focus their support and resources. By not being
able to offer specific advice and support, much
of the resources devoted to small firm ICT
development, is likely to be misdirected and to
enjoy only limited success (Martin, 1999, 2000,
2001; Martin et al., 2001). Lack of small firm
engagement with previous Information Society
Initiatives amply support such claims (Peet et
al., 2000). Furthermore, other national and
international ``small firms'' initiatives have
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
largely failed in their remit by taking a holistic,
rather than a discriminant approach (Matlay,
2001) and by attempting to make ``best practice
approach fit all firms whatever the size or
sector'' (Bryson and Millward, 1998).
Concluding remarks
The DTI ladder adoption model outlined in
this paper represents both a limited and a
limiting vision of government-inspired
support for the ICT implementation and
development needs of firms operating in the
small business sector of the UK economy.
Although in the present form it can be
perceived as a typical UK-based support
Downloaded by Universiti Sains Malaysia At 00:37 25 April 2015 (PT)
model, the lessons that can be learned from
this critique could prove useful for policy
makers, academics and other interested
parties in most industrially developed or
developing countries. To prove effective for a
wide range of small firms, the UK model
needs to be revised, extended and modified so
that it reflects more fully the requirements and
experiences of firms of various sizes and
geographical locations, and in particular of
those organisations that exhibit more
entrepreneurial or sophisticated usage of ICT.
Smaller firms will struggle if they attempt to
integrate ICT into their firm without owner/
managers and their workforce having relevant
knowledge and adequate human resource
capacity to support new technology (i.e. a
paradoxically different process to that
identified by DTI as ``the route''). The
importance of human capital for ICT
acquisition and development should be
explicitly recognised in this model and it may
also prove useful to replace the current ``stages
of adoption'' with more suitable ``stages of
small firm understanding''. This is particularly
important during initial stages, as the
commitment of owner/managers and their
perception of ICT benefits appear to be
crucial to the successful adoption and
development of new ICT technology in this
type of firm.
Small firms were identified as possible targets
for support as they are most likely to benefit
from ICT, through their focus on ``niche
markets'' and their tendency to develop and
407
Internet Research: Electronic Networking Applications and Policy
Volume 11 . Number 5 . 2001 . 399±410
maintain close relationships with both
customers and suppliers. In this context, new
ICT resources could provide small firms with
key competitive advantage and facilitate the
search for underdeveloped and intrinsically
lucrative outlets in both the domestic and the
global market. In practice, however, this holistic
model appears to be applied indiscriminately to
target all existing small firms in the UK. As with
previous initiatives, early indications would
suggest that that this blanket approach will
ultimately fail to match government targets and
DTI expectations. Such mismatches could also
apply to R-3 communities which may need
significant and specific government support to
compete and survive in the current economic
climate.
In recent years, using blanket approaches to
describe the small business sector as a
homogeneous group, rather than a
heterogeneous and complex mix of
economically active units, have invariably
resulted in significant under-utilisation of
available human and financial resources. For
the successful conclusion of ICT-related
initiatives it is crucially important to recognise
the complexity of specific needs, strategies,
ideas and core capabilities that coexist in this
sizeable sector of the economy. There is an
acute need for further quantitative and
qualitative research on this important topic.
More empirical research is needed at micro-
economic level to facilitate a better
understanding of the complex processes and
differentiating factors that affect ICT adoption
levels and its impact upon small firm
competitiveness. Through recognition of
inherent diversity and complexity, the routes for
optimum support for ICT adoption could
become clearer to all interested parties
including owner/managers and their workforce.
Without better understanding, the drive for
ICT adoption and development will not
successfully contribute to small business
competitiveness either in home markets or in
the emerging ``Global Village''. Furthermore, a
better understanding of the complex issues
underlying the ``Information Revolution''
would ensure the most effective utilisation of
external support in an economic sector that is
notorious for its scarcity of human and financial
resources.
 ``Blanket'' approaches to promoting ICT in small firms
Lynn M. Martin and Harry Matlay
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