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Small businesses wary of high tech

Most small firms are confused by technology purchasing decisions and skeptical that the investment will bring much of a return.

The majority of small businesses are confused by technology purchasing decisions and skeptical that technology spending will bring much return on the investment, according to a new study, notwithstanding the efforts of high-tech companies to convince them otherwise.

Companies with less than 500 employees accounted for over $44.3 billion in technology spending in 1997, according to market research firm International Data Corporation (IDC). That number is expected to rise by 15 percent next year.

Recognizing this, major PC vendors like Dell Computer, Compaq Computer, and Hewlett-Packard have recently launched high-profile campaigns targeted at the lucrative market. But IDC reports that high-tech companies have some significant obstacles to overcome before that market is fully fleshed out.

The study, sponsored by IBM, the U.S. Chamber of Commerce, and the Small Business Administration, concluded that most small businesses approach technology spending with caution. They are apprehensive about investing in unproven devices and often rely on friends and colleagues for advice instead of professional consultants.

Although 67 percent of businesses with under 100 employees have Internet access and 85 percent use email, 61 percent say they wait until technology is "proven" before buying in and only 47 percent consider themselves "pro-technology."

Only a quarter of those companies polled have a Web site, or use the Internet for promotional or marketing purposes. Roughly the same amount are familiar with the concept of electronic commerce.

These findings, coupled with the promise of growing small business revenue, have spurred IBM to announce its own small business campaign, called the Small Office Solutions Initiative. The program will include Small Business ThinkCenters at local chambers of commerce, a Small Business Toolkit, and a new Web site for small business owners to assess their technology needs.