The New Zealand Government has shown a concern to promote the use of information communication technology (ICT) by New Zealand small to medium size enterprises (SMEs). There has been an enquiry into telecommunication regulation and an ongoing commitment to an E-summit programme. The latter involves both Government and enterprise in ongoing dialogue and public fora. In the May 2002 Budget for fiscal year beginning July 1, 2002 Government is introducing a new regional broad banding initiative to assist where private telecommunication companies find it not profitable to upgrade the infrastructure. This study investigates the perceptions of SMEs, as solicited through a quarterly SME survey conducted for the Independent Business Foundation. The survey is now into its third year and provides the opportunity for monitoring changing sentiments and addressing new issues as and when they arise. The perceptions of various groups integrally involved with the small medium enterprises (SMEs) sector, regarding information communication technology (ICT) are analysed in this paper. The Economist Intelligence Unit/Pyramid Research (EIU) study (2001) (www.ebusinessforum.com) into levels of E-preparedness ranked New Zealand 20th down from 16th the year before. While the impact of ICT across the whole business sector is important, it is essential that the SME sector, including the micro businesses, should capture some of the efficiency gains. Government has continued to push ICT but there has been an increasing disquiet that business is not moving quickly enough to catch the knowledge wave. Science Minister, Hon Peter Hodgson, addressing a pharmaceutical conference in March 2002, observed “I have watched us miss the ICT bandwagon, if I can be blunt. And it’s not going to happen again.” (New Zealand Herald, p E3).Trade NZ, a government department, notes the importance of unleashing the potential gains from ICT for SMEs in underpinning their recent programme of assistance: New Zealand has no other option but to adopt e-business and increase participation of its SMEs in the global economy. E-Business has the potential to expand the country’s current exports and grow the number of new exporters. Since uptake of true e-commerce is slow among exporters and other companies, the New Zealand Trade Development Board (Trade New Zealand) has taken on a leadership role through a NZ$10 million project supported by additional funding from the Government. (Trade NZ 2001). In the absence of a commercial imperative or a large stick/carrot regime it may be relatively easy to succumb to complacency in times of reasonable economic growth. Currently, agricultural exports are doing relatively well given the higher international prices for commodities. Nevertheless, it is generally recognised that long-term sustainable competitive advantage needs to be built upon a strong foundation in the knowledge economy. With a small population, a relatively open economy, heavy compliance regimes relating to occupational-safety and health, resource management, employment relations, and the burden of social welfare vis B vis other emerging knowledge economies there are multiple challenges to be faced. The SME sector, and in particular the micro business sector, is a very large component of the New Zealand economy. If ICT offers the opportunity of reducing costs and enhancing supply chain efficiency, then it is important that these potential gains accrue to the SME sector. At the national level telcos (telecommunication companies) continue to dispute interconnection agreements. “After Telecom refused to switch WorldxChange’s toll bypass phonecalls to Clear’s network, WorldxChange complained to the Commerce Commission on Friday June 1 accusing Telecom of abusing its market power” (New Zealand Herald 9 June, 2001). It is generally true that competition works to limit the extent to which there are dead weight losses in the system (Williamson 1996, p.197). However, the ICT environment reflects an ineffectual regulatory and compliance policy framework, which is a typical problem in a heavily bureaucratic structure where administrative process is the objective rather than tangible efficiency gains. The EIU makes this point forcefully commenting, “The importance of a regulatory regime geared to e-business is clear in our rankings; it is the main factor that puts Australia 18 places ahead of its neighbour New Zealand, which ranks only 20th.” This is despite the government’s involvement in a number of initiatives such as E-summit and ECAT (Electronic Commerce Action Team). The efficacy of these policies needs to be considered in the light of New Zealand deteriorating international ranking. Government policy, in New Zealand, relating to small to medium enterprises (SMEs) has altered significantly during the last decade (Nyamori and Lawrence, 1997). The changes have not followed a consistent pattern but rather have promoted considerable uncertainty in the environment. Commenting on the then most recently announced policy for SMEs Welham (2000, p41.) suggests, “they are ‘reinventions of the wheel’ for it has all been done before.” Scrimgeour and Locke (2001) review the decade from 1990, concluding that Government policy in a range of areas appears, among SMEs to have a low credibility. The SME survey has been conducted quarterly since 1999. The telephone interview consists of two parts. First, there are questions relating to the level of operating activity and these are asked each quarter. In addition several special interest questions are asked. These typically relate to the topical issues and the responses are prepared for business professional magazines. The minimum sample size of 400 provides a level of margin of error of less than 5%. The typical survey consists of 1,200 calls to allow for meaningful regional and industry comparisons to be made. Sample selection is generated from ‘yellow pages’ telephone listings. The sample is programmed subject to constraints. Specifically two parameters are considered. First, the regions are balanced to ensure that more than 30 enterprises are selected in each chosen region. This biases the sample against the geographical concentration of Hamilton north. Similarly, the industry profiles are not representative of the proportions operating in the economy by rather ensure that minimum samples sizes are greater than 30
