The 21 st century has been characterized by dynamic and rapid technological
advancements. The technological advancements have affected all the sectors of the economy
including the business. In that regard, the most affected subsection in the economy are the
small and medium Enterprises (SMEs). The SMEs are those businesses that have less than
ten employees and have a turnover of less than 100,000 euros per year It is estimated that
more than 60% of the business in the UK can be characterized as SMEs in terms of the area
coverage, revenues earned and the number of employees (Khalique et al., 2018). It, therefore,
shows that the SMEs drive the economy of the UK. In a bid to improve its performances, it
is important to determine and understand the factors that affect the sector of the economy.
However, this research will focus on understanding the impact of the Knowledge innovation
and ICT on SMEs.
The following research main aim is to determine the impact of the Information
communication technology on the SMEs. The study will examine the impacts of ICT,
innovation, and knowledge the SMEs that adopt the ICT and the firms that will also fail to
adopt the ICT. Additionally, the research will look at the SMEs overall knowledge and how
that impacts their productivity and management. The current world deals with a lot of
information and any business will be exposed to a large amount of information. How the
business handles, it will determine significantly how well they will perform? Therefore, the
research will be able to answer and add to the existing academic knowledge exactly how
knowledge, innovation, and ICT impact the performance of the SME in the UK. The research
will also be able to highlight to the SMES owners how they can align their products and
services to the global requirements. The research will also be able to outline to individuals,
government and relevant agencies how they can establish an enabling environment of the
SMEs to grow.
The main research question is how knowledge, innovation, and ICT impacts the SMES
However, there will also be other specific questions that the essay will also look to answer.
i) How can the SMEs apply the ICT in their activities?
ii) What are the challenges hindering the increased use of the ICT?
iii) What are the factors that are limiting the innovation exercises of the SMEs?
iv) Are there activities that can increase the innovative abilities of the SMES
v) How does the SMS apply the knowledge in their daily activities
These research questions can be answered by the research proposal after the data is
collected, analyzed and interpreted The data collected will then be presented and used to
answer the above-mentioned questions. After answering the specific questions, it will then
be possible to answer the general questions and draw a conclusion or propose strategies that
can be used to improve the SMEs performance.
The Literature review
The SMES hare the driving force behind any countries economy as they employ and
account for more than 50% of most countries GDP (Khalique et al., 2018). Advanced
technology has also increased the use of Information Communication Technology which has
greatly influenced the business environment, including the SMEs. According to Yusuf
(2011), it is clear that today the ICT shapes every aspect of our lives. Therefore, ICT will also
impact the SMEs in any way depending on how they interact. ICT has been known to
increase outcome, performance, and revenues for many other businesses. According to
Yusuf (2013), we live in a highly technological era that is characterized by technological
advancement and information technology. It is an era that is data-driven. Therefore, it implies
that all the business must at one time or the other deal with the information that is provided to
them. Oluwafemi (2015) backs up the statement and adds that businesses have therefore
resorted to using data analysis and information consumption in running the business.
Oluwafemi (2015) however adds that the use of the ICT determines the level of knowledge
that the business will have. It is through this knowledge that Oluwafemi (2015) suggests that
the business will be able to make decisions that are best suited for the business.
According to Gayen and Roy (2018), they assert that the adoption of the ICT will not
only increase the efficiency of the adoption of the evidence-based approaches backed by
information-driven strategies by the SMES, but it also has the potential to reduce the costs
and the productivity level of the SMEs. Use if evidence-based approaches improve on the
knowledge of the business and their innovations strategies. The statement is supported by
Misuraca et al., (2018) who according to their research they were able to realize that the ICT
costs effectiveness might motivate the users to go and use the internet commerce in
improving the communication with their stakeholders.
Gayen and Roy (2018), generalize the benefits that the SMEs can gain from the
adoption of the ICTS includes developed capabilities to manage data, intensive resources,
cut on their transaction costs, develop capacity, another and disseminate according to the
international scale and gain access to important information.
From the previous researches, it is clear that SMEs can enjoy a lot of benefits from
the adoption and usage of the ICT. However, Cant et al., (2018) handle the issue of the ICT in
a different manner. They argued that most of the benefits that the previous scholars have
outlined as the benefits are only potentialities that SMEs might achieve if they use the ICT
accurately. According to the researchers, SMEs face a lot of problems and challenges that in
most instances make it hard for them to adopt the ICT. Therefore, while there are all those
potentials the SMEs will not be able to achieve them unless the challenges are addressed first.
Cant et al., (2018) identifies the challenges as the large initial capital outlay,
infrastructure, lack of knowledge, policies legal, regulatory policies form characteristics,
return on investment an and the managers' characteristics. With all these insights other
factors come into play which will determine how the ICT ultimately impacts the SMEs. It
is, therefore, not viable to examine the impact of the ICT on the SMES without first
determining the level of knowledge or the skills that the SMES operators have. One factor
that has stood out as limiting factor in the adoption and usage of the ICT is the skills
knowledge and attitude that people have the ICT in general. Another factor that seems to
stand on the way is the availability of the software, computers, internet. telecommunication
and ICT experts to handle the ICT in the SMEs.
Innovation according to Misuraca et al (2018) refer to the process of coming with
new procedures and policies and organizational knowledge distribution process and new
products and services in general. It is in this approach that SMEs can gain a competitive
advantage of the other businesses that have already established. Provision of new products
can lead to new customers. Misuraca et al (2018) define that knowledge as the ability or
technical know-how of how to do something. According to Misuraca et al (2018), he outlines
that knowledge and innovation can be enhanced by ICT. According to a study conducted by
the Quinlan et al (2018), he discovered that most (74%) of the SMEs were managed by
people who did have not to study about business management or any business course after
high school. The study also revealed that 84% of the people had also never followed up to
study anything about ICT business management (Quinlan et al., 2018). In light of this
information, it is clear that SMEs may be underperforming because individuals have not
focused on acquiring the knowledge necessary to use ICT. Nonetheless, the information
processing abilities of the ICT has the ability to interpret the data and enhance the knowledge
and innovation. However, he asserts, just Like ICT, knowledge, and innovations have also
limitations. Even though they all have the potential of increasing revenue, cutting cost
gaining competitive advantage and providing new service and products, SMEs will still need
to address the challenges to enjoy the full potentials.
Despite all these challenges research show that ICT knowledge and innovation can
have a positive impact on the SMEs. This is according to a research conducted by Yusuf
(2013) in which the researchers concluded that even though a firm is small and faces all the
challenges like (cost, lack of knowledge and infrastructure) they firm still have the
opportunity to attain competitiveness and outmaneuver their rivals if it establishes a culture
and that fully exploits all the opportunities that have been availed by the ICT, internet and the
e-commerce multivendor platforms. In general, the author outlines that that ICT knowledge
and innovation will help a business in its all-around business activities. Looking critically at
the all the views and the findings that other people have outlined about the ICT it is clear that
its positive impact if adopted outscores the downside costs that the SMEs will have to incur
(Khalique et al., 2018).
The null hypothesis of the study is that ICT has no impact on the SMEs performance.
The alternative hypothesis is that ICT has a significant impact on the SMES performance
The second hypothesis
Null hypothesis: Innovation has a no significant impact on the performance of the SME
Alternative hypothesis: innovation has a significant impact on the performance of the SMEs
Null: Relevant knowledge has no significant impact on the performance of the SME
Alternative hypothesis: Relevant knowledge has significant impact on the performance of the
The following research will use both the quantitative and the qualitative approaches
on data collection. The quantitative approaches will be focused on the mathematics and
statistics to derive meaning (Quinlan et al., 2018). On the other hand, the qualitative
approaches will be reviewing data from study objects to be able to understand and interpret
observations from the closeness. The research is more focused on identifying the impact of
the knowledge, innovation, and ICT in the UK. Therefore, the research will use both the
exploratory approaches and building on the existing theories and empirical findings from the
The data collection approaches for the study will be both on primary data collection
approaches and secondary data collection approaches. Primary data collection is where the
research will collect data for its own usage and tailor-made to meet the requirement for the
research (Quinlan et al., 2018). For this study, the research will use both questionnaires and
interviews to collect the data. Since all the people that own businesses in the UK are many,
the study will use stratified sampling to divide the area into regions and send questionnaires
to people in those areas. The study will use online questionnaires that are both structured and
semi-structured to collect the data.
The secondary data analysis is the using of data already collected and stored (Quinlan
et al., 2018). It will involve thorough internet searches of the case studies about the impact of
the ICT, innovation, and knowledge. The study will then analyze their findings and integrate
it in the research together with the findings. All the data will be strictly about the SMEs
found in the UK region.
Data analysis approaches
The firstdata data analysis will be on the primary data collected. The primary data
collected will include open-ended responses and quantitative data collected. The data that
will be collected will then be analyzed first using comparative analysis. The comparative
analysis approach will compare the SMEs that use ICT, to those that do not use ICT. The
comparison analysis will examine the business revenues, business management, innovative
products a year, growth rate, and a number of customers that they are able to serve.
Additionally, data will be extracted from the questionnaires to determine the
knowledge of the people who run the business, their attitudes towards ICT and their
innovative approaches. Afterward, the information will be turned into quantitative data and
the research will use regression analysis to determine the correlation between the factors
have. The research will also thoroughly analyze and critique the secondary sources from the
internet and case studies. The analysis will allow for a qualitative analysis and interpretations.
It will also allow for a comparative analysis for all the years that the data was collected.
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through the use of complex systems theory: A methodology for modeling and
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