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Firms skeptical on e-com
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June 21, 2000: 12:47 a.m. ET
Survey finds many doubt impact of e-commerce on their firms; authors warn of risk
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NEW YORK (CNNfn) - Small and medium size companies are increasingly embracing the Internet, but many remain skeptical about e-commerce, according to a study released on Wednesday.
Those owners could be putting their businesses at risk, the authors say.
A majority of these companies, 85 percent, say they use the Internet in their business, up from 65 percent the last time the survey was conducted in 1998, according to the report by National Small Business United and Arthur Andersen. Seventy-one percent either have a Web presence or are planning to develop one in the next 12 months, an increase from 63 percent in 1998.
At the same time, however, 42 percent said they expected electronic commerce to have no impact on their business. "They see it as something on the fringe," said Nancy Pechloff, director of Andersen's Enterprise Group. "In our view, Internet technology is going to have an impact on business. There's some concern that they don't see the whole picture."
 More than half the companies in the survey -- 54 percent -- do not conduct e-commerce and don't plan to start in the next year, according to the survey, the eighth in its series.
But when small and medium size companies do realize the importance of the new medium, they are likely to move quickly to take advantage of it, said John Hexter, chairman of National Small Business United.
"The new economy has been happening very rapidly," he said. Many business owners are "only beginning to understand the implications of the Internet."
As an example, the No. 1 way firms recruit workers is through classified ads in newspapers, Pechloff said. Only 3 percent are using the new job-search Web sites, and only 5 percent even post their job openings on their own company sites.
As for the skepticism that the 42 percent expressed about e-commerce, "the other 58 percent say the future is here and they're going for it full bore," Hexter said.
Overall, 61 percent of respondents believe that the economy will continue to expand through 2000, nearly double from the last survey. And small companies are showing willingness to adapt to today's tight job market by outsourcing more activities -- 55 percent are choosing to outsource, up from 44 percent in the last survey. 
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