Security concerns prevent firms from adopting e-commerce

DUBAI — Security concerns are the primary reasons for low adoption rates of e-commerce amongst small businesses, noted experts in a recent book titled, ‘E-Commerce in Regional Small to Medium Enterprises (SME)’.

By A Staff Reporter

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Published: Tue 24 Jul 2007, 8:53 AM

Last updated: Sun 5 Apr 2015, 3:19 AM

The book, authored by professors from the University of Wollongong in Dubai, is the outcome of studies spanning two years that show regional SMEs in developed countries of Australia, Sweden and the United States have low e-commerce adoption rates. The authors, Dr Lejla Vrazalic and Dr Robert McGregor, both associate professors at the University of Wollongong in Dubai and Australia respectively, say the findings have important lessons for the Gulf countries.

The book endorses the widely held view that security concerns prevent small businesses from adopting e-commerce. It is also consistent with the view that small businesses generally do not have the same access to technical resources and expertise that larger organisations do. As a result, the security concerns become a major barrier.

“Governments that wish to promote e-commerce practices in small businesses need to understand the mindset of the group when devising policies,” said Dr Vrazalic. “Small businesses cannot be treated as a homogenous group of organisations. They require tailored programmes to assist with e-commerce implementation. These programmes should provide expertise to initiate e-commerce and also draw from the collective experience of small businesses in implementing e-commerce.”

The flourishing economy of the UAE has led to a number of government initiatives promoting a leading innovation-based knowledge economy. The most notable among them are the establishment of ‘smart cities’ such as the Dubai Internet City and its $1.3 billion expansion project, expected to be complete by the end of this year. The government also has ambitious plan for e-government services.

According to the schedule set by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, 90 per cent of government services and 50 per cent of public transactions should go online by the end of 2007. However, the major IT-using companies are large corporates in the banking, telecommunications, energy, transport sectors and government departments themselves. The small and medium businesses lag behind their larger counterparts, points out the book.

“It is in the governments’ interest to promote e-business in small businesses because small businesses are the backbone of the economy. E-business is an enabler that allows small businesses to compete in the international arena and also promotes exports,” says Dr Vrazalic.

Prof Nick van der Walt, CEO, University of Wollongong in Dubai, commented, “Dr Lejla Vrazalic’s book pinpoints the factors that are hampering the wider use of e-commerce among small businesses, to the detriment of economies globally. It is rich in lessons for the Gulf region as well, because governments here are spending large sums of resources on promoting e-business and e-government.”

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