An Examination of Regional Policy Implications Pertaining to SME E‐Business Adoption in South‐East Wales

• DOI: http://doi.org/10.1002/jsc.2020
• Author: Geoff Simmons,Christopher Miller,Brychan Thomas
• Date: 01 September 2015
• Published date: 01 September 2015

RESEARCH ARTICLE

Strat. Change 24: 429–446 (2015)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2020

Copyright © 2015 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2020

An Examination of Regional Policy Implications

Pertaining to SME E-Business Adoption in

South-East Wales1

Brychan omas

University of South Wales, UK

Christopher Miller

University of South Wales, UK

Geo Simmons

Queen’s University Belfast, UK

Regional policy frameworks need to focus on strengthening the ICT infrastructure,

clarifying market rules to build user condence, developing networks, facilitating

ICT-enabled clustering and infrastructure sharing.

E-business, otherwise known as electronic business, ebusiness, or Internet busi-

ness, can be dened as the application of information and communication tech-

nology (ICT/IT) to support business activity (Beynon-Davies, 2013). IBM’s

marketing and Internet teams rst coined the term e-business in 1996 (Amor,

1999; Gerstner, 2002). e rapid development of e-business applications has

changed the way businesses, of all sizes, interact with customers and suppliers.

E-business is concerned with business cooperation, customer service, elec-

tronic order processing, supply chain management, and electronic purchasing in

the value chain. It can use a combination of extranets, intranets, and the World

Wide Web, and allows the integration of business processes involving internal

electronic information (Bakos et al., 2015) and the exchange of company data.

E-commerce is dened as the buying and selling of goods and services over the

Internet (omas and Simmons, 2010). It involves the use of the World Wide

Web to provide income and through the Internet the capability to develop links

with partners and clients (Grandón et al., 2011; Jehangir et al., 2012; Zucchella

and Hagen, 2012). is can involve the implementation of knowledge manage-

ment systems (KMS) and information systems (IS) (Lawrence, 2010).

E-commerce is viewed as part of the overall strategy of e-business (Lamie et al.,

2011). Business and management scholars, as well as the popular business

1 JEL classication code: M21.

One region where e-business has

had a particular impact for small

and medium-sized enterprises

(SMEs) in recent years is South-

East Wales (SEW).

Results from the survey

demonstrated that nearly all rms

used some form of information

communication technology (ICT).

There are therefore real

opportunities to develop and

diversify the SEW regional

economy through e-business.

430 Brychan Thomas, Christopher Miller, and Geoff Simmons

Copyright © 2015 John Wiley & Sons, Ltd. Strategic Change

DOI: 10.1002/jsc

press, agree that e-business, encompassing e-commerce,

has revolutionized business transactions (Amor, 1999;

Chaey, 2011).

For rms adopting e-business there are several impor-

tant themes in relation to strategic change. e shift from

product-driven to market-driven demand has been inu-

enced by the use of the Internet and emphasizes the stra-

tegic importance of e-business. In particular, strategic

IS development has been discussed at length by Chaey

and White (2010). e theme of strategic competition has

promoted the need for rms to move to technology-

enabled activities such as Internet orders (Porter, 1996).

Another theme of strategic change is the Internet allowing

sellers, buyers, and consumers to reduce transaction costs

for business activity to be undertaken on a third-party

basis (Porter, 2001). A further theme has been falling

transaction costs weakening the ‘glue’ holding together

value chains and challenging conventional business models

(Evans, 2013). As a result, competitors can build an elec-

tronic platform layering the competing elements of the

value chain above the common business platform (Evans,

2014). e strategic change issues involved in e-business

outlined have particular pertinence for small and medium

enterprises (SMEs) (Cote et al., 2005). rough thinking

about e-business strategically, SMEs may leverage solu-

tions to transform their business and create value for

customers and the rm (Casadesus-Masanell and Ricart,

2010). inking strategically about e-business deploy-

ment is therefore of signicant importance to SMEs

(Chaey, 2011).

Given the current global economic recession, the role

of SMEs and their ability to leverage e-business solutions

has become a critical challenge (Ashurst et al., 2012).

ere have been a number of important studies concern-

ing Internet adoption by SMEs in recent years (Galloway

et al., 2011; Rosli and Noor, 2011; Sanders et al., 2010;

Simmons et al. 2011; omas et al., 2013; Tseng and

Johnsen, 2011) as well as IT adoption and usage

(Mardikyan, 2010; Oliveira and Martins, 2011). An inter-

esting stream of this literature has explored e-business and

other advanced ICT applications from a UK regional

perspective. Jones et al. (2003a, 2006) conducted an eval-

uation of e-business stages of growth models (ompson

et al., 2013; Williams et al., 2010) and e-business barriers

within SMEs in Wales (Jones et al., 2007, 2008, 2011,

2012). Further studies have investigated the ‘knock-on

eect’ of e-business as well as skill and competence issues

within the graphic design industry in Wales (Murphy

et al., 2007, 2010). Although these and other studies have

investigated various aspects of regional SME e-business

adoption, research has yet to adequately address the policy

challenges facing regions in providing strategic guidance

for SMEs in e-business adoption (Inedo, 2011). is is

particularly pertinent in relation to facilitating a post-

recession recovery for UK regions and the SMEs residing

within them.

e aim of this article is to address this by focusing

an empirical study on SME e-business adoption and

regional policy implications for a UK region in assisting

SMEs. Two objectives to focus this were: (1) develop a

conceptual model interpreting the knowledge gap between

e-business adoption in practice and policy implications;

(2) test the model empirically with SMEs from the South-

East Wales (SEW) region of the UK to identify policy

challenges in providing strategic guidance for their SMEs

adopting e-business. e movement from research aim

and objectives to the literature-backed conceptual model

as a basis for the study conducted provided a robust basis

for the research design and ndings. e SEW region has

attracted a number of previous studies of e-commerce and

e-business adoption (Jones et al., 2007, 2008, 2011;

Murphy et al., 2007, 2010; Quayle, 2001), as well as

ongoing studies in which some of the authors have been

involved. e research team had access through ongoing

work to SME members of the Chamber of Commerce in

SEW located in the two main conurbations of Cardi and

Newport with outlying areas. ey represent the two main

‘engines’ of business activity in the SEW region. is

region is the gateway to England, being strategically

placed on the middle and east of the M4 motorway