The Use of Electronic Commerce by SMEs in Victoria, Australia

Background Recent media hype about the Internet, e-commerce, computing, and telecommunications companies potentially has increased the awareness of electronic commerce. With further developments in electronic business technologies surely coming, it seems likely that many more sectors of the economy may engage in some form of electronic business. However, the findings of many surveys conducted worldwide suggest that e-commerce is not being adopted as readily by small-to-medium enterprises (SMEs) as one might have expected. The size of the company and the perceived importance of e-commerce to business functions consistently have been noted as possible factors in determining whether businesses get involved in e-commerce. For example, Weiss (2000) and Ruth (2000) both suggest that the adoption of e-commerce depends on the size of the businesses involved, with larger firms more likely to adopt it than smaller ones. Locke (2000) found that 41 percent of the New Zealand SME owners surveyed about e-commerce were still unsure of what the concept meant. In separate research, Ruth (2000) surveyed the e-commerce activity of small companies in New Jersey and showed that those companies were hesitant about adopting e-commerce in a significant manner. To understand more about whether and how SMEs engage in e-commerce activities, this study investigates the level of e-commerce engaged in by manufacturing SMEs located in the Central Highlands of Victoria, Australia. Method At the request of Business Ballarat, the Economic Development units of Hepburn, Mooraboolo, and Pyrenees Shires and the Central Highlands Area Consultative Committee, the Centre for Rural and Regional Information conducted a survey of 272 manufacturers, which was completed in November 1999. The results of the survey were collected and compiled into an online database called "On MainStreet Manufacturing" (2000) (www.mainstreet.au .com/ms/manufacturing/). To be included in the directory the businesses had to have an office or manufacturing plant in the Central Highlands area, have at least 50 percent of their business in manufacturing or processing, and conduct business on a continuous basis. This study collected data from "On MainStreet Manufacturing" and from each website recorded in the directory. The data collected from the directory and the manufacturers' websites were recorded and analyzed. Attributes that were noted included the size of enterprise (number of employees) and information about the company website, including whether it offered details about the company and its products, whether it had the facility for online sales or forms for submission of information, whether it was searchable by keyword, and whether it offered information about industry events and/or links to relevant industry information. Results The total number of manufacturers surveyed was 272, of which 263 businesses chose to participate (97 percent). However, the number of complete profiles recorded in "On MainStreet Manufacturing" was substantially less, at 179 (66 percent) of the 272 surveyed. Therefore, for the purpose of this study, the total number of respondents is considered to be 179. Of those 179 respondents, 42 percent had an email address and 19 percent had their own website. The respondents were grouped by size in terms of the number of employees engaged in the business. The range of sizes were chosen to reflect the sizes of the firms in the region. That is, there are many small firms with fewer than five employees, substantially fewer firms with more than 100 employees, and various sizes in between. However, the frequency of firms within the size categories was not uniform. Therefore, the groupings are not evenly incremented. Rather, the groupings were formed to ensure that a substantial number of firms were represented in each cate gory. Table 1 provides a breakdown by employee size of the SMEs surveyed. …