Information and communication technologies: a curse or blessing for SMEs?

Over the last few decades there has been an increase in the development of computing and telecommunication technologies, which has enabled, in a significant way, the development of an advanced global business and commerce (Andrijcic and Horowitz, 2006). The continuous advancement of information technology impacts all sectors of the economy, both positively and negatively. The implementation of the internet into business operations creates a paradigm shift from the traditional ways in which firms operated and interacted with customers and employees. However, it also increases the vulnerability to information security breaches (Arcuri, 2017). The Internet, coupled with advancement in information technology (IT), makes virtual management of business possible and this allows for quicker and more efficient transactions. It also allows for online databases, which significantly reduce the time it takes to retrieve information while creating the possibility for linkages across them. With the escalating globalisation forces and the added pressure of competition around the world, companies are increasingly applying the Internet as a strategic tool (Ching and Ellis, 2004; Pezderka and Sinkovics, 2011). The proliferative usage of information and communication technology (ICT) applications acts as a source for competitiveness and allows firms to grow (Jorgenson and Stiroh, 2000; Higón, 2011), enables them to control their processes (Jean et al., 2010), and also allows them to expand their international activities (Sinkovics and Penz, 2005). Since small and medium-sized firms (SMEs) play an important role in the economy, through their contribution to job creation and stimulating innovation, it is anticipated that SMEs may adopt new technologies in order to create more innovative products, compete in more effective ways and enhance their growth and survival (Bruque and Moyano, 2007; Smith, 2008; Nguyen, 2009; Higón, 2011; Steinfield et al., 2012).
This chapter discusses some positive performance aspects of the growing use of information and communication technologies by firms, especially SMEs, but also to highlight potential security threats that can affect the lifespan of the firm through, for example, financial losses and damage of the firms’ reputation. In particular, section 2 discusses the effect of ICT on firms’ performance and international expansion. Section 3 reviews the security risk associated with the increasing adoption and reliance of the ICT. Section 4 provides some aspects related to the costs of cyber-crimes to firms and customers. Finally, the last section concludes the chapter and provides some recommendations for building a safer online environment.