Innovation in small and medium sized enterprises: The case of e-commerce adoption in the UK


Successful small and medium sized enterprises (SMEs) are recognised as being an important component in the industrial development, and its consequent social benefits, of all economies.

However, e-commerce has been described as altering the structure of whole industries, dampening profitability and leveling business practices. SMEs will not be immune to these effects and must therefore find a way of successfully adopting this new technology. Many SMEs are currently developing e-commerce services, however there is little systematic research into how they are doing this and what the organisational and environmental factors associated with adoption are.

This study addresses this gap through an exploration of the level and sequence of adoption and the factors associated with this adoption. The research, which focuses on the particular case of the UK and was carried out by means of a mailed questionnaire, found four distinct clusters of adoption.

The four clusters appeared to form a set of sequential steps or stages, through which firms passed during the adoption of e-commerce. Seven factors were found to be associated with their adoption of e-commerce. Six of these factors were consistent with factors previously identified as associated with the adoption of traditional IT systems by SMEs, whilst one new factor was identified which would appear to be unique to, or at least more significant in, the domain of e-commerce adoption. A more detailed analysis of the adoption factors over the four adoption stages demonstrated that SMEs adopting e-commerce are likely encounter the acculturation effect.

Adoption of innovation studies invariably assumes that the factors associated with adoption are linear in nature. This study highlights that these factors may well be more complex than currently assumed and hence forms a useful starting point for future innovation studies.


Elizabeth Daniel
Information Systems, Research Centre, School of Management, Cranfield University, United Kingdom

Hugh Wilson
Visiting Fellow; Director, Centre for e-Marketing Information Systems, Research Centre, School of Management, Cranfield University, United Kingdom

Andrew Myers
Visiting Fellow, Information Systems Research Centre, School of Management, Cranfield University, United Kingdom


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Table 1: E-commerce Activities



Previous Study

Variable Name in Current Study

Providing information on company

Hamill & Gregory (1997) Keeling et al (2000)


Providing information on goods or services

Webb & Sayer (1998); Dutta & Evrard (1999); Poon & Swatman (1999) Keeling et al (2000) Jacobs and Dowsland (2000)


Taking orders

Webb & Sayer (1998); Dutta & Evrard (1999); Poon & Swatman (1999) Jacobs and Dowsland (2000)


Receiving payment

Webb & Sayer (1998); Dutta & Evrard (1999)


Delivery (of digital goods or services)

Webb & Sayer (1998)


After sales service or contact

Webb & Sayer (1998)


Identifying new inventory suppliers

Dutta & Evrard (1999) Jacobs and Dowsland (2000)


Ordering and payment of inventory purchasing

Dutta & Evrard (1999) Jacobs and Dowsland (2000)


Non inventory purchasing (such as travel, stationery)

Dutta & Evrard (1999) Jacobs and Dowsland (2000)


Communication (email) with customers or suppliers

Hamill & Gregory (1997); Dutta & Evrard (1999); Poon & Swatman (1999) Keeling et al (2000)


Internal communication between employees

Hamill & Gregory (1997); Dutta & Evrard (1999); Poon & Swatman (1999)


Document & design exchange with customers or suppliers

Hamill & Gregory (1997); Dutta & Evrard (1999); Poon & Swatman (1999) Keeling et al (2000)


External information search eg competitors, regulations

Hamill & Gregory (1997); Dutta & Evrard (1999) Keeling et al (2000) Jacobs and Dowsland (2000)


Communication with shareholders and investors

Webb & Sayer (1998)



Hamill & Gregory (1997); Dutta & Evrard (1999); Poon & Swatman (1999) Jacobs and Dowsland (2000)



Webb & Sayer (1998)



e-commerce, small and medium enterprises, innovation, adoption


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