Impact of Technology on Small Businesses Essay Example | Topics and Well Written Essays - 2750 words

Impact of Technology on Small Businesses - Essay Example In the present paper the impact of technology is critically analyzed to understand whether adopting technology in its various forms is profitable to small businesses or not through qualitative research methodology. Small businesses drive the economy by leading in innovation and very crucial for national economies because of their large contribution in terms of employment and turnover (Burns, 2007). Small Medium Enterprises (SME) according to the Bolton committee is defined as an independent local firm whose ownership and management is vested in the same individuals and market share is small. A firm is termed as SME when it meets two of the three criteria’s namely consisting â€Å"up to 250 employees, up to  £50 million annual turnover and  £43 million annual statement of financial position total† as given by the European Commission of 2003 (Amm, 2011, p.1). Small businesses like large firms, in their operations try to apply latest technologies in order to be competitive, knowledgeable, more efficient and eventually more profitable (Kierman, 1995). However it has been found that technology is also negatively affecting the small businesses by decreasing the personal aspect of the business relationship, surveillance and constant monitoring using technology is decreasing employee morale and productivity significantly and brick and mortar small stores are losing their market share to large companies who use technology extensively (Hanley, 2013) moreover technology brings change that might not be adopted well by employees and is expensive and keeps changing (Keirman, 1995 and Burgess, 2002). SME’s compared to larger firms respond quickly to market threats and opportunities because they are more market-driven than larger firms who are more research driven. And use innovative technology or technology innovatively in developing new markets and about ten percent of SMEs are technology based and can be termed as innovative.