Information Systems and Small Business

The subject area of the application of information systems to small business is a thoroughly interesting, yet relatively under-researched topic. Small business is an important part of any economy. In the United Kingdom, 25% of the gross domestic product is produced by small business, which employs 65% of the nation’s workers (Ballantine et al., 1998). In Canada, 43% of economic output is accounted for by small business, employing 50% of private sector employees (Industry Canada, 1997). Further, governments view the small business sector as that component of the economy that can best contribute to economic growth (Balderson, 2000). Given the importance of this sector of the economy, it is incumbent upon researchers and managers of small business to develop a better understanding of how information systems may contribute to the operation and growth of individual businesses as well as the overall sector. The objective of this chapter is to provide an overview of information systems used by small business. Research projects are presented that describe the current situation. Recommendations are then proffered for various stakeholders who should contribute to a more effective use of information systems by small business.