The Federation of Small Businesses (FSB) has urged the government to increase investment in broadband in order to bolster growth in online trading.
This is according to a new report, entitled Small businesses and online trading, which raises concerns about the lack of broadband coverage across the UK.
FSB said that current-generation broadband (up to 24 Mbps) is not available across any of their sites for nine per cent of small firms. For 22 per cent, it is not available on at least one site.
Approximately a quarter of small businesses only have access to speeds of up 2 Mbps.
In 2010, business-to-business online trade contributed £60bn to the UK economy. The FSB argued this could be much higher if the barriers to broadband were removed.
"Online trading has helped empower small businesses to find new markets, sell new products, try new models, and compete on an equal footing with larger businesses," said John Walker, national chairman of FSB.
"The biggest obstacle for many small businesses is the lack of broadband speeds and so they cannot compete online as a result.
"The FSB is calling on the government to ensure that all small businesses are connected and have access to the broadband speeds they need to do business online."
As part of the government's autumn statement, chancellor George Osborne said he is going to increase investment by £100m to create 10 super-connected cities that will receive broadband speeds of 80-100 Mbps.
Osborne also announced that £20m will be made available through the Rural Community Broadband Fund for hard-to-reach rural areas.
The FSB is concerned that £20m will not be sufficient to bridge the digital divide and argues that some of the £100m should be reallocated to the rural fund.
The government pledged a further £530m last November as part of its Comprehensive Spending Review. This will ensure that 90 per cent of households in each local authority can access super-fast broadband.
This money is being administered by Broadband Delivery UK and is available to BT and its competitors, which will bid for the funds.
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