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Small doesn't mean insignificant

Online social networking can provide small companies with the scale and influence to have the same impact on IT as their larger counterparts

Self awareness is a difficult skill to master. Most people are more likely to undervalue their personal worth than exaggerate it. It's more natural to focus on your faults than your strengths — especially if everyone else is bigger than you. Europe's small and medium-sized businesses contribute up to 80 percent of employment in some sectors and provide around 75 million jobs. Yet despite their enormous contribution, they have been woefully under-served by IT providers.

Things have begun to change recently but the attitude and approach of many large hardware and software vendors has been clumsy, top-down and verging on the patronising to date. A report from the EC ICT Taskforce released this week attempts to explore why small companies lag behind their larger counterparts in IT adoption. The taskforce, whose members include behemoths such as Microsoft, IBM and Intel, admits that prohibitive pricing has contributed to the problem, but also points to over-regulation creating barriers to effective use of IT.

More telling is the taskforce's assertion that intellectual property rights and patents go hand in hand with innovation. SMEs will only improve their IT standing by joining the larger players in becoming prolific contributors to the patent system. This is wrong for two reasons. First, playing the patent game requires deep pockets, which small companies simply do not have. Second, as Microsoft's ongoing tussle with Novell shows, claiming patents are vital for innovation is like saying copyright is an essential part of song writing. It can be useful for commercialising the end result, but has nothing to do with the creative process itself.

Collectively, small companies contribute as much to the economy as large enterprises, but they have none of the clout. As well as their scale, big businesses benefit from being plugged into a network of influence from lobbying groups to trade associations. SMEs are inhibited by their size and isolation.

Improved co-operation and collective bargaining is one solution to the problem. Thankfully, the web has made this process much easier. Online social networking — of which the new ZDNet UK is a strong proponent — can at the very least help smaller organisations share information. At best, it can be used to create virtual organisations with the same scale and bargaining power as physical corporations. Rather than IT manufacturers seeing SMEs as an unexploited opportunity, it is time for small companies to realise where the bargaining power really lies.