Information and communication technology (ICT) connectivity (PCs and Internet) is very widespread in businesses of all sizes. As is the case with all technologies, small businesses are slower than large ones to adopt new ICTs. Commercial considerations and potential returns are the principal drivers of small business adoption and profitable use. Principal reasons for non-adoption are lack of applicability and little incentive to change business models when returns are unclear. SMEs also face generic barriers to adoption including trust and transaction security and IPR concerns, and challenges in areas of management skills, technological capabilities, productivity and competitiveness. The issues for governments are to foster appropriate business environments for e-business and ICT uptake (e.g. to diffuse broadband, enhance competition), and target programmes to overcome market failures to the extent that they are needed in particular areas (e.g. skill formation, specialised information).