Small Businesses Eagerly Await Information Highway, [ sent to me I am not sure of CR status .. dj

[David Farber <>]

Small Businesses Eagerly Await Information Highway,


February 9, 1994




 Small businesses across the United States are poised to take advantage
 of the Clinton Administration's proposed National Information
 Infrastructure, or{information highway,}according to the results of a
 survey of 514 small businesses announced today by IBM.  Close to half
 the respondents have heard of the information highway.  Of those,
{three-quarters view it as a potential business asset.}


 Aimed at determining what small business owners think of the planned
 information highway, the IBM survey found that among those aware of
 the phrase, a large majority believe it will impact their profits
 favorably.  They also think it will increase their ability to expand
 globally and give them access to competitive bidding information not
 normally accessible.


 The United States is ahead of other countries in developing an
 information highway according to the majority of those surveyed.
 On average, they say it will take more than eight years before
 becoming a reality for half the small businesses in this country.


 The survey of presidents, owners and managers of small businesses
 with revenues of $5 million to $99 million was conducted between
 January 10 and January 21, 1994, for IBM by Roper Starch Worldwide.
 The survey has a margin of error of plus or minus 4 percent to
 6 percent on the totals.


 "We've been working very hard for the last few years to understand
 the contributions of information technology to the productivity
 and profitability of small and growing companies," said Wirt Cook,
 general manager, general business and distribution, IBM United
 States.  "Obviously, these companies are very important to us.  The
 information highway should represent a real opportunity for small
 and growing businesses, and we intend to be a player in helping our
 customers realize that opportunity."


                {Uses of the Information Highway}


 Services expected to be offered on the information highway that are
 perceived as useful to small businesses include the ability to place
 or take business orders as well as send design and manufacturing
 specifications to staff, vendors or customers.  Other services include
 using tele/video conferencing, checking market prices or determining
 the availability of raw materials.


 Interestingly, three of the top five areas of perceived usefulness
 relate to customer service, indicating a growing reliance on
 technology for service delivery.


             {Government and the Information Highway}


 Two-thirds of those who have heard of the information highway believe
 that helping develop it is a good use of government funds.  However,
 they are divided on the specific role government should play.  About
 half say they would like to see some government influence.  Forty-four
 percent say they would prefer no government influence.


 When asked about specific responsibilities, a significant number of
 respondents say the government should be involved with providing
 trademark protection and patents, managing radio frequencies and
 protecting intellectual property rights.


 Private companies should develop and maintain the infrastructure,
 according to 83 percent of the respondents.  Three-quarters say the
 private sector should maintain technical standards.


 Privacy and the information highway is a big concern.  Two-thirds
 of those who have heard of the information highway agree there will
 be a lot of electronic eavesdropping.  A smaller majority agree that
 the ability to protect confidential records and information will
 be compromised.


       {Sources of Expertise About the Information Highway}


 When presented with a list of potential sources of expertise on the
 information highway, a third say they feel hardware/software
 manufacturers will be the single most reliable source.  Other
 potential sources of expertise include entrepreneurs and consultants,
 partnerships with big business, the U.S. Chamber of Commerce, the
 Small Business Administration and government agency representatives.


       {Global Competitiveness and the Information Highway}


 To be competitive globally, nine out of 10 respondents feel it is
 important to develop the information highway with a majority saying
 it is very important.


 Almost all small businesses, however, are taking a wait-and-see
 posture about committing to the information highway while only
 6 percent say they are taking immediate steps to join the
 information highway.


              {Importance of Information Technology}


 Technology systems now in use are absolutely essential to the
 functioning of their businesses according to eight out of 10
 respondents.


 A majority say information technology helps them understand
 cash flow and be more responsive to customers.  A majority also
 say it is helpful in becoming more profitable, controlling
 operating costs, providing a competitive edge, managing and
 controlling resources, and improving the quality of products and
 services.


 Overall, small business owners are more likely to say information
 technology helps them grow and expand their business than they are
 to say it is used for survival.


 A majority of respondents say their investment in information
 technology will increase over the next 12 months, reflecting an
 8 percent increase over a somewhat similar survey conducted last year.


 The survey was conducted to pinpoint the information technology needs
 of small businesses served by IBM and its network of 3,500 Business
 Partners.  IBM Business Partners provide marketing, support and
 application software for IBM products.