Lack of confidence is putting UK businesses off ecommerce

UK businesses are not trading online as much as the government had originally anticipated - and one of the biggest problems is a lack of confidence.

In 1998, the government set a target of having one million businesses online by 2002, but less than half a million have reached the objective.

The Department of Trade and Industry's (DTI) annual International Benchmarking report looked at the barriers to online trading in 10 of the world's leading economies.

The most common reason for not adopting ecommerce in all the countries examined was that goods were not appropriate to sell over the internet.

The second reason given was a preference for face-to-face relationships with suppliers, indicating a lack of trust and confidence.

Small businesses feel particularly unsure about adopting new business technologies.

'There are confidence issues with service providers,' said Peter Scargill, national IT chairman of the Federation of Small Businesses.

'You're told you need to get really on this and it's the next best thing since powdered milk. But then you can't get your email or you have a virus. If you're a small company there's often no IT department to tell to sort this out,' he said.

Beatrice Rogers, ebusiness programme manager at industry body Intellect believes UK businesses are too trusting of what they are told by suppliers and official bodies.

'Understanding what's good for your business and understanding that ebusiness isn't going to sort everything out is key,' she said. 'It's people and technology that will take us forward.'

The Institute of Directors (IoD) says the UK must overcome its fear of new technology if the country is to climb back up the benchmarking ladder in the future.

'Many businesses must overcome their instinctive aversion to new technology and look beyond this to the potential impact on their business models,' said an IoD spokesman.

'This is not a "new economy." It is a new set of tools or freedoms which are complementary and can be usefully deployed in almost any "old economy" company,' he said.