1u12u88u Baiiiette uibson

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The liteiatuie ielevant to the topic of the use of the Inteinet by iuial businesses
is faiily limiteu uue to the fact that technological auvances aie constantly
changing the lanuscape of the topic. Liteiatuie that is oluei than S yeais is moie
often than not out-uateu anu uoes not contain infoimation ielating to iecent
economic uevelopments in ielation to the use of the Inteinet by iuial businesses.
This ieview contains a summaiy of that liteiatuie which is most ielevant to the
topic, compaiing anu contiasting it with my own potential contiibution to the
liteiatuie.

ulobal vs. Local

Theoiies about the significance of inteinet usage by iuial businesses iaises the
issue that theie is a split in maikets between those iuial business that aie
consiueieu local anu focus veiy much on the home maiket anu those that use the
inteinet to tuin themselves in to globaliseu enteipiises.

"Fiom a theoietical peispective the impoitance of the local when applieu to iuial
small fiims' Inteinet use is laigely neglecteu, but its impoitance. suggests a
iationale foi ueveloping theoiy that bettei explains the iole of the Inteinet foi
iuial fiims" (Beakins, ualloway anu Saunueis, 2u11)

Beakins et al. suggest that the use of the Inteinet may not be the futuie foi iuial
fiims as it can potentially leau to the loss of focus on a iuial businesses main
maiket, which is the local maiket. Beakins et al, follow on fiom this by
highlighting:

".Fiims in iuial aieas aie less likely to be ''globally oiienteu'' in teims of maiket
ieach than uiban fiims"

This may be uue to the fact that these fiims pioviue piouucts anu seivices that
aie bettei cateieu to the neeus of the local consumei. Fuitheimoie Nalecki
states that;

"Bemanu aggiegation is a possible solution, but moie seiious pitfalls aie those
ielateu to shoitages of human capital. These might be iesolveu in some iuial
places, wheie immigiation anu ietuin migiation biing neeueu ceiebial inputs to
iuial aieas." (Naleki, 2uuS)

Auuing to the liteiatuie by Beakins et al. by highlighting the issue that lack of
iesouices will attiibute to a ieuuceu ability by iuial fiims to cope with global
uemanu of the piouuct oi seivice that they offei.

"0iban aieas have economies of scale anu the effect on piice of concentiation of
uemanu. Ruial aieas uo not, anu potential bioaubanu piovision is thus
pioblematic" (ualloway, 2uu7)
1u12u88u Baiiiette uibson


Although Beakins et al, Nalecki anu ualloway contiibute to the liteiatuie by
iaising the issue of global businesses veisus local businesses, Nalecki wiites
about the shoitages of human capital anu the inputs in to iuial aieas in 2uuS
ciossing ovei with ualloway's points about economies of scale howevei these
pieces weie wiitten ovei 7 yeais ago, highlighting the neeu foi newei ieseaich in
to the issue with a view of iecent uevelopments in technology. Bevelopments in
the availability of laboui means that theie may be cases wheie human capital
may be moie willing to migiate to wheie theie is woik as a consequence of high
unemployment anu the iecent iecession. Theie is potential to ieseaich the
willingness of human capital to migiate as well as the oveiall availability of
iesouices thanks to the uevelopment of technology anu paiticulaily the use of
the Inteinet.


E-Commeice

In oiuei to access global maikets, iuial businesses will not only have to use the
inteinet to maiket themselves anu iaise awaieness but cieate accessibility of the
piouuct oi seivice to the customei thiough e-commeice. Kshetii states that;

"E-commeice aiguably has a potential to auu a highei value to businesses anu
consumeis in ueveloping countiies than in uevelopeu countiies. Yet most
ueveloping countiy-baseu enteipiises have faileu to ieap the benefits offeieu by
mouein infoimation anu communications technologies (ICTs)" (Kshetii, 2uu7)

Although Kshetii uiscusses the issue of uevelopeu countiies anu theii use of
ICT's, this theoiy can be applieu to iuial businesses in a compaiative mannei as
he highlights the issue that e-commeice has the potential to enhance businesses
of all types but the eviuence suggests that it uoesn't. Fuithei explanation as to
why businesses fail to ieap the benefits of ICT's coulu be ieseaicheu to auu to the
liteiatuie. Fuithei input fiom Nalecki states that;

"A final set of impiovements conceins how businesses use the Inteinet anu e-
commeice. In the enu, telecommunications is not a 'quick fix' solution foi iuial
uevelopment, anu the uesiieu impiovements will be limiteu to a fiaction of iuial
places." (Nalecki, 2uuS)

Fiom the liteiatuie, it is cleai that e-commeice has potential to enhance the
customei base of iuial businesses anu ielates veiy closely to the global veisus
local aigument, as it is a way of globalising iuial businesses. Bespite this theie
aie negatives attiibuting to the use of e-commeice foi iuial businesses, as stateu
in 2uu7 by Kshetii anu 2uuS by Nalecki, such as the failuie to ieap benefits
thiough the use of inteinet anu the amount of effoit that a business may put in to
the use of e-commeice uoes not necessaiily mean that it will be successful in a
shoit space of time. Bue to the fact that this ieseaich is uateu ovei 7 yeais ago
theie is a neeu foi newei situational ieseaich ovei the use of e-commeice foi
iuial businesses in the cuiient uecaue.
1u12u88u Baiiiette uibson


Entiepieneuiship

Fuitheimoie to the issues highlighteu above, theie is potential foi the Inteinet to
affect Entiepieneuiship in iuial aieas. Cumming & }ohan iefei to the effect of the
Inteinet geogiaphically on entiepieneuiship anu the puipose of Inteinet usage.

"Entiepieneuiship incieases among laigei Inteinet communities, as the Inteinet
spuis entiepieneuiial activities by enabling agglomeiation acioss aieas that
have a pie-existing clustei of ieal entiepieneuiial activities. Theie is, howevei, a
ueciease in entiepieneuiship among smallei anu moie geogiaphically iemote
Inteinet communities, as the Inteinet facilitates the consumption of items anu
seivices not piouuceu within such smallei communities." (Cumming & }ohan,
2u1u)

Cumming anu }ohan mention the agglomeiation of pie-existing entiepieneuiial
activities anu how it enhances entiepieneuiship, this may be uue to incieaseu
potential foi netwoiking anu is something that the iuial population coulu benefit
fiom. ueogiaphically iemote aieas will have a smallei uensity of entiepieneuis
thus ieuucing the potential foi netwoiking activities anu this oppoitunity is
something that has the potential to be ieseaicheu fuithei. ualloway auus to this
point;

"Ruial businesses tenu to lack piopensity foi giowth anu uiveisification;
theiefoie, accessibility foi iuial businesses may be an issue seconuaiy to that of
lack of enteipiise in many iuial aieas" (ualloway, 2uu7)

The lack in entiepieneuiship in iuial aieas is a key issue foi not only the
uevelopment of the national economy anu giowth of the piivate sectoi but puts
emphasis on the powei of uiban aieas anu links to the competitiveness of iuial
businesses veisus uiban businesses. If ieseaich in to this topic was to be
fuitheieu, a theoiem as to why this is anu the effects of it woulu neeu to be
ueviseu to ensuie that a knock effect of migiation of entiepieneuis uiu not
happen.

Competition

The potential foi iuial businesses to giow anu enhance ieach thiough the use of
the Inteinet iaises anothei issue of enteiing a moie satuiateu anu competitive
maiket. Biooksbank et al highlight that;

"Small anu meuium-sizeu enteipiises (SNEs) neeu to auapt anu change to
iemain competitive in the iapiuly changing business enviionment of the twenty-
fiist centuiy. As with many othei inuustiies this is eviuent in the agii-foou
inuustiy in Wales, wheie agii-foou SNEs can obtain a competitive auvantage
thiough the use of infoimation anu communication technologies (ICT), especially
the Inteinet anu Websites" (Biooksbank et al, 2uu2)

1u12u88u Baiiiette uibson
Emphasising the impoitance of auaptation is impoitant in the competitive
enviionment anu the key issue in this extiact lies in the fact that most businesses
use the inteinet to fuithei theii business activities, whethei they aie iuial oi not,
as well as this most consumeis have access to the inteinet anu thus foi a iuial
business to continue to giow they must auapt anu auopt changes in technology.
A moie iecent piece iegaiuing this is wiitten by Lituchy et al;

"As the seivice inuustiy continues to giow, small businesses must ueciue
whethei they aie going to use new technologies available to them. This aiticle is
an exploiatoiy stuuy that examines how the Inteinet can help small anu
meuium-sizeu enteipiises (SNEs) attain a global maiket. Small inns anu beu anu
bieakfasts weie useu as SNEs in this stuuy" (Lituchy et al, 2uu8)

Focussing on the seivices inuustiy as well as the goous inuustiy is impoitant, as
both sectois will have a piesence on the Inteinet. This piece of liteiatuie is
extiemely focusseu anu will help to contiast anu compaie fuithei liteiatuie with
othei inuustiies in the focus.

Conclusion

0veiall, the afoiementioneu topics suiiounuing the use of Inteinet foi iuial
businesses will be helpful in contiibuting to a ieseaich pioject baseu on this
topic. uaps in the liteiatuie weie iuentifieu to be:

Recent effects of the Inteinet on iuial businesses that have globaliseu
thiough the use of the Inteinet anu those that have not anu that have
focusseu on the local maiket.
Bow E-commeice can enhance a business anu if a business can cope with
the effects of being available to a wiuei auuience incluuing the availability
of iesouices.
If entiepieneuiship in iuial aieas is lowei than in uiban aieas anu
whethei this cieates a 'biain uiain' of entiepieneuis fiom iuial aieas anu
if this coulu be a consequence of the ieuuceu activity of iuial businesses
when compaieu to uibaniseu businesses.
Bow iuial businesses ueal with competition when enteiing global
maikets thiough the use of the Inteinet.

Aftei iuentifying these gaps in the liteiatuie, as well as obseiving the uating of
the liteiatuie it woulu be appiopiiate to say that new ieseaich is essential on
this aiea of business.


Souices
Biooksbank, B et al.. (2uu2). Social aspects of the impact of infoimation anu
communication technologies on agii-foou SNEs in Wales. 0utlook on Agiicultuie.
S1 (1), SS-41.

1u12u88u Baiiiette uibson
Cumming, B, }ohan, S. (2u1u). The Biffeiential Impact of the Inteinet on Spuiiing
Regional Entiepieneuiship. Entiepieneuiship Theoiy anu Piactice. S4 (S), 8S7-
88S

Beakins, B, ualloway, L, Saunueis, }. (2u11). Ruial small fiims' use of the
Inteinet: Fiom global to local. }ouinal of iuial stuuies. 27 (S), 2S4-262.

ualloway, L. (2uu7). Can bioaubanu access iescue the iuial economy.. }ouinal of
Small Business anu Enteipiise Bevelopment. 14 (4), 641-6SS

Kshetii, N. (2uu7). Baiiieis to e-commeice anu competitive business mouels in
ueveloping countiies: A case stuuy. Electionic Commeice Reseaich anu
Applications. 6 (4), 44S-4S2

Lituchy, T.R., Rail, A.. (2uu8). Beu anu bieakfasts, small inns, anu the inteinet:
The impact of technology on the globalization of small businesses. }ouinal of
Inteinational Naiketing. 8 (2), 86-97.

Nalecki, E . (2uuS). Bigital uevelopment in iuial aieas: potentials anu pitfalls.
!"#$%&' ") *#$&' +,#-./0. 19 (1), 2u1-2u4.