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Understanding take-up of broadband by small and micro-enterprises: a case study

Liz Price, University of Lincoln
Dr Don White, University of Lincoln
Prof. Andrew Atherton, University of Lincoln
Dr Hannah Noke, Nottingham University 

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Objectives: The paper examines patterns of broadband take-up, implementation and effects within small and micro-sized enterprises.  The research focuses on the ‘onlincolnshire’ initiative, a local government-led programme which aims to encourage broadband take-up through provision of connection subsidies to SMEs in rural areas of Lincolnshire. 

Prior work: There is a well established and relatively mature literature on the adoption of ICT by SMEs, dating back to the information revolution of the 1980s.  Much of the early literature identifies the drivers for and barriers to ‘taking up’ these technologies for smaller enterprises, and many propose that the nature of the smaller, owner-managed enterprise can reduce the propensity to deploy and invest in new technology.

Approach: The findings presented in this paper are based on primary research with companies that have adopted broadband as a result of the ‘onlincolnshire’ initiative.  The research approach combined 40 qualitative interviews to explore how broadband had been adopted and implemented within the companies with a quantitative telephone survey of 150 companies to assess the effect of broadband on key output measures, such as turnover and employment.

Results: Three patterns of broadband adoption were identified: (1) efficiency gains within current activities; (2) to expand or enhance an existing business model; and (3) to change the business model and re-position the enterprise.  Broadband take-up to fundamentally re-position the enterprise was the least common pattern, indicating that adoption of this technology medium occurred to enhance established trading and operating patterns.  The findings suggest that, although few businesses used broadband technology to change their business model, the majority reported improvements in efficiency, productivity, and profitability. 

Implications: There is little indication that broadband connection stimulated or produced new business models.  This implies that current government policies to encourage the development of new business models through promotion of ICT do not reflect the experience of new technology adoption by small businesses.  The findings are relevant to policy makers, practitioners, and researchers in the field of e-business. 

Value: The paper outlines a data-driven and, therefore, grounded conceptual framework of broadband adoption, which outlines both uses and effects of broadband at the level of the firm.  The findings and model are generated from, and driven by, in-depth fieldwork with small and micro-sized firms.

2007, Glasgow

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