Academic journal article Entrepreneurial Executive

Impact of Internet on Small Business: A Survey of Entrepreneurs

Academic journal article Entrepreneurial Executive

Impact of Internet on Small Business: A Survey of Entrepreneurs

Article excerpt

ABSTRACT

To help understand the impact of the Internet on small business, a survey of entrepreneurs was conducted. The survey results indicate a majority of small business entrepreneurs are aware of and adapting to the digital world. Eighty percent of entrepreneurs use the Internet in day-to-day business activities even though the extent of usage of the Internet varies widely across firms. Entrepreneurial attitude toward the Internet is more favorable with relatively larger and successful firms operating in dynamic environments. Small businesses with modest goals (i.e. promoting goods/services) were more successful with the Internet than firms with ambitious goals.

INTRODUCTION

The Internet has had a pervasive effect throughout the business world in the United States. Much has been written on this topic and it is really hard to avoid reading any business magazine without a discussion on how the Internet has influenced business outcomes and processes. It is widely accepted that the usage of the Internet is of a competitive necessity for survival of firms. There is also a perception that this digital age could possibly level the playing field for small business in certain sectors of the economy.

In the last few years, a large number of articles and books have been published on this topic. The focus of these articles has been largely on the large business firms or web-based emergent firms and how they have succeeded or failed in the new electronic world. However, during the last decade, small firms primarily have been the economic driver of the United States economy in terms of job creation and economic growth (Birch, 1981; Office of Advocacy, 1998). But very little is known on the impact of Internet on small business firms. For instance, in a library search, minimal information was found on how small businesses are coping with these dynamic changes in the economy. Hence, it was decided to conduct a survey of small business entrepreneurs to help understand the changes the Internet has had on small business.

This study seeks to answer three exploratory questions: 1) What are entrepreneurs attitudes and opinions on the impact of the Internet on Business; 2) What is the extent of involvement of small business with the Internet; and, 3) What factors influence entrepreneurs' attitudes towards the Internet? This paper is divided into five sections including this introductory section. In section two, the logic behind the questionnaire items, data collection methodology and sample characteristics of this study are explained. Section three presents the findings of this study on the opinions held by entrepreneurs on the Impact of Internet on small business. This section also presents the survey findings regarding the current usage of Internet by small firms. Section four reviews the results of the factors that influence the entrepreneurs' attitudes towards Internet. Section five concludes with the key findings of this study. This section also presents a summary of the responses to the open-ended question in the questionnaire.

DATA COLLECTION METHODOLOGY

Since we had minimal priori expectations, our goal for this study was to gather a reflection of small business entrepreneurs' attitudes and experiences on the impact of Internet on business operations. We also collected some information about firm characteristics to see if any patterns existed between the entrepreneurs' attitudes towards the Internet and the type of the firm. A questionnaire was used as a survey instrument primarily for speed and ease of collection of data. A 5-point Likert Scale was used for all the items except for the one open-ended question at the end of the questionnaire.

Questionnaire Description

In brief, the questionnaire was made up of two parts. Part 1 focused on Impact of Internet on Business. We focused our questions on four issues:

a) Reasons why a firm may choose to implement E-Commerce
solutions;

b) Reasons why a firm may choose not to implement
E-Commerce solutions;

c) Current usage of Internet by the entrepreneur; and,

d) Life cycle stage of the business unit with respect
to the involvement with the Internet. … 
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