is also important to understand the characteristics and differentiating factors of SMEs.
3.3 What are SMEs?
Small to medium enterprises (SMEs) are businesses that employ 150 people or fewer and are not a subsidiary of a public limited company, according to Southern and Tilley (2000). SMEs play a very significant role in the growth and development of an economy. Empirical studies have shown that a large percentage of the growth in GDPs and of the reduction in unemployment is as a result of activities of SMEs. Mahemba and Bruijn (2003:162) cite the fact that SMEs make up more than 90% of all business establishments worldwide. Authors such as Southern and Tilley (2000), Taylor and Murphy (2004), and Martin and Matlay (2001) agree and acknowledge that SMEs are different and should be treated as such. There are many factors that make SMEs different, such as turnover, industry, number of employees, and format of the business. These factors need to be studied in more detail to establish how they influence the adoption process.
3.3.1 Differentiating factors of SMEs
Buckley and Montes (2002) explain that compared with big business, SMEs are generally found to spend less per employee on ICT and also spend less on computers and communication. Moreover, SMEs generally do not have R&D (research and development) or innovation departments, but in order for them to survive in the digital or knowledge economy, it is very important that they develop these.
One characteristic that almost all small businesses have in common is that they are owner managed. The owner is the centre of the business, making all or most of the decisions, and thus the owner’s personality and attitude towards technology have an impact on the adoption of ICT by the small
Page 17 of 73