The use of information technology (IT) in small and medium enterprises (SMEs) is one of the spearheads of small business stimulation policies. The relative backlog in IT adoption that SMEs show, compared to larger companies, is considered one of the reasons for their slower development. With the IT industry shifting its focus to smaller and medium sized companies this situation could be changing, but will the typically reluctant small business entrepreneurs be convinced? The sharp fall of the e-business hype strengthens the skepticism about the value of IT. In 2002 the average IT spending in Dutch SMEs was below 0.5% of their revenues (Ravesloot et al., 2002). On average large companies spent between 1.8% (industry) and 9.3% (telecom) on IT (Wijbenga et al., 2003). How does this fact reflect on the productivity of SMEs? Does the lower IT investment rate in small business, compared to larger enterprises, correlate with a lower productivity?
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