IT Responsiveness in Small and Medium Enterprises: It Pays to Be on Top of IT

Information technology today is a complex area, in which new problems and challenges constantly arise and innovations emerge. The ability to incorporate an innovation in time or to solve a problem efficiently can mean competitive advantages for some firms. Being responsive in IT involves being alert, knowledgeable and prepared to face technical problems and to solve them in appropriate ways. In Europe, the year 1999 confronted firms with two examples of such challenges: the adaptation to the new European currency, the Euro, and the so-called millennium bug or Y2K problem. The present paper studies how fast a sample of 1,700 small and medium enterprises in Spain have reacted to these two problems, and introduces the company’s degree of IT responsiveness into a classical production function expressed as a structural equation model. The newly defined construct is found to be positively associated to output generation: firms that are proactive and responsive to their IT-related problems tend to outperform those who are not.