MANY small businesses in the UK are falling behind the competition as technology progresses, according to a report sponsored by BT Business.A comprehensive study by the Centre for Future Studies, an independent think-tank, found that many small firms were unable to meet customer demands and expectations because they were failing to recognise the need for the effective management and use of their IT and communications.

MANY small businesses in the UK are falling behind the competition as technology progresses, according to a report sponsored by BT Business.

A comprehensive study by the Centre for Future Studies, an independent think-tank, found that many small firms were unable to meet customer demands and expectations because they were failing to recognise the need for the effective management and use of their IT and communications.

The report contains a comprehensive analysis of the capabilities of small businesses and how they match up to consumer expectations. S

There are an estimated 4.3million SMEs in the UK, accounting for half of the UK's turnover and employment, smaller businesses are now generating twice as many jobs as large employers.

But the study shows they do understand the importance of technology in their business, with 86% acknowledging technology is pivotal to their long-term success.

However, while they are doing their best to embrace technology, they are having difficulty managing it and ultimately identifying where their business is falling down.

Owner-managers were unable to implement solutions on their own because they did not have the IT skills, and there was no single source of trusted information or advice for them, the report found.

Although four out of five owner-managers did not think their business lacked IT skills, more in-depth interviews found that up to half of small firms had deficiencies in their IT knowledge and skills, and as a result, were unable to manage technologies to optimise the benefits to their business.

BT Business managing director Bill Murphy urged other businesses and organisations to join them in seeking to expand the knowledge base of UK SMEs.

Dr Frank Shaw, Foresight director at the Centre for Future Studies, said: “Consumer expectations are increasing as they experience a better level of service. All of this is driving IT investment and SMEs need to deliver on service whilst also accommodating changing work patterns which meet their employees' expectations. Innovation is the key if SMEs want to compete in today's domestic and world markets.”