THE ADOPTION OF IT BY SMEs: THE DUTCH CASE

IT has become a major source of innovation, innovation that is crucial for the competitive strength of enterprises. This applies to large as well as to small enterprises. Small companies that follow technological trends are, however, confronted with a number of specific constraints that impede the application of IT. The aim of this article is to show that there are plenty of opportunities for SMEs to stimulate innovation by the implementation of IT. The second aim is to make clear what are the bottlenecks in the implementation of IT in SMEs, with the ultimate goal to formulate policy recommendations to stimulate the introduction of IT in SMEs. The structure of this article is as follows. First, we will sketch the role of IT in innovation processes. The introduction of IT first of all leads to process innovation (internal and external), followed by product innovation in the sense of more diverse, cheaper and customer specific products. Process innovation can best be described in terms of standardisation, differentiation, specialisation and (vertical and horizontal) integration. Subsequently, we will discuss the empirical results of several reports we made for the Dutch Council for Small and Medium-sized Enterprises (RMK). We will make an inventory of the bottlenecks that occur during the innovation processes and the implementation of the required IT. The problem is that small enterprises often lack the necessary knowledge of the innovative possibilities of IT or find it difficult to apply it in practice. The latter is usually the case when there are considerable organisational consequences or when strategic vision is required with respect to the possible uses of IT. Finally, we will make a number of policy related recommendations.