Information technology and innovation for SMEs


Information and communications technology (ICT) has a key role to play in driving innovation and competitiveness for small businesses and the IT sector itself. But equipping the labour force with the right skills and providing access to high-tech infrastructure are essential if the full potential of ICT is to be harnessed.

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Innovation has become the 'mot du jour' in the debate on how the EU can work its way out of the ongoing financial crisis (EurActiv 29/01/09). The future of European high-tech industries will depend to a large extent on small and medium-sized enterprises (SMEs), which account for around 95% of companies. 

Information technology can help reduce costs, enable more efficient development processes and bring products to market more quickly than in the past. 

From a practical point of view, this can mean simple things, like e-invoicing and electronic payments systems, as well as the use of computer-aided design programs, which can make the work of engineers and architects less labour-intensive and more creative. 

In addition, many of Europe's most creative ICT companies are smaller businesses developing niche technological solutions, and they often link up with bigger firms capable of integrating innovations into existing platforms for end-users. 

The major barriers to optimal use of ICT are limitations to broadband roll-out in member states and a workforce in need of training on how to embrace emerging technologies. 

To address this, the EU has taken a number of initiatives aimed at updating ICT skills, including the establishment of a task force on competitiveness in the ICT sector and the launch of a Communication on e-Skills. 

An expert group on e-invoicing was also put together by the Commission and the importance of having the right mix of skills to take advantage of innovation in the small business sector is written into the Small Business Act

In addition to human capital, physical telecommunications infrastructure is sorely lacking in some member states. Access to high-speed broadband Internet is now seen as essential for efficient e-business, but many regions - particularly in rural areas of Europe - do not have sufficient broadband coverage.