Sustaining Growth and Performance in East Asia
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Sustaining Growth and Performance in East Asia

The Role of Small and Medium Sized Enterprises

Edited by Charles Harvie and Boon-Chye Lee

This third book in the series focuses on how small and medium sized enterprises (SMEs) contribute to achieving and sustaining growth and performance in their economies, as well as the ways in which governments can assist and enhance that contribution. This is of particular concern given the trauma suffered by East Asian economies in the wake of the financial and economic crisis of 1997–98.
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Chapter 12: SMEs and the Internet: A Comparative Study – China and the UK

Bob Ritchie and Clare Brindley


Bob Ritchie and Clare Brindley1 12.1 INTRODUCTION The potential impact on local, national and international markets from the widespread adoption of the Internet and e-business by smaller organizations is likely to be very significant. The Internet has been heralded as having a major impact on business in the 1990s and in the early part of the 21st century. Estimates (for example, by Durlacher, 1998) suggest that although the penetration of the Internet and e-business within the small business sector in the UK was initially low (in 1998 approximately one-third of SMEs utilized the Internet), forecasts (for example by Durlacher, 1998) have suggested a dramatic growth to around three-quarters of smaller businesses implementing e-business applications by 2003. In the case of the UK alone, there are estimated to be 2.4 million businesses employing fewer than 500 people (OECD, 1998a) with 1.5 million (almost 30 per cent of all businesses; OECD, 1998b) employing fewer than 11 people. What is interesting is not just this growth but the application of the Internet within their business strategy. Berthon et al. (1998, p. 691) commented that ‘more systematic research is required to reveal the true nature of commerce on the Web’. The research that has been done to date has often concentrated on e-business applications, involving large organizations operating in consumer markets. Though some authors, for example, Dutta and Evrard (1999), have begun to explore the use of the Internet by SMEs, the literature in this area is not vast and remains highly anecdotal....

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