European Small Businesses Play Russian Roulette With Their Futures

New Study Reveals European Small Businesses Could Lose up to 1631,200 Billion

An estimated 258,000 small businesses in the UK, France and Germany could face the total collapse of their businesses if they were to lose all their computer data, according to an independent survey conducted by MORI . The financial cost to small businesses of losing all their data without having adequate back-up systems in place could cost those three countries as much as 163700 billion in total. If this figure is projected across all European Union countries, it could be as high as 1631200 billion.

The research was sponsored by Iomega International SA, the market leader in storage devices and involved the detailed questioning of IT decision makers in 330 companies with less than 50 employees in the UK, France and Germany. The objective of the research was to question European small businesses on the value of the information they stored on their computers, how secure that data information is and estimate the cost of losing that information if it were to be lost.

The survey revealed that the small businesses that took part in the survey valued their computer data at 163373,227 on average, although more than a third were unable to put a value on their data at all. Two-fifths (40%) are not securing important files at least once a week.

"1631,200 billion across the European Union. That's equal to four times the GDP of Switzerland . It's a shocking statistic that companies are willing to take such a gamble with one of their most valuable assets. Small businesses are the lifeblood of Europe and keep more than 60% of its workforce of people in employment. We have become dependent on technology, to such an extent that for some European small businesses they are 100% reliant on the information that is stored on their computers," said Vic Sanchez, European head of Iomega International SA.

"It's not just large corporations and big banks that regard their technology as mission critical now, it's a large chunk of the small business community. The problem is that small businesses either don't know how they can put the safeguards in place to ensure that they back up their files."

The study revealed that the approach small businesses took to protecting their data fell into eight distinct character types, of which two in particular stand out - The Wise Owl and the Headless Chicken. The Wise Owl describes the small business that knows the financial risk of losing data, can put an actual value on their data and takes steps to secure important files at least once a week. A third of Germans (34%) but only one in seven French (15%) could be described as Wise Owls. One fifth (23%) of UK businesses could be considered Wise Owls.

The Headless Chicken is at the other end of the scale. This company is aware of the financial risk of losing data, can put a value on that data, yet does not take the necessary steps to ensure that important files are backed up at least once a week. A quarter (24%) of French companies and one in ten (9%) UK companies fall into this category.

Whilst six per cent of the companies that MORI spoke to said that they would be in danger of going out of business if they were to lose their data, a further 30% said that they would suffer substantial financial loss. A quarter of the companies surveyed claimed that they would suffer moderate financial loss. Only 14% said that they would suffer no financial loss at all.

"The companies that fall into the Headless Chickens category need to be looking at ways in which they can transform themselves into Wise Owls. Using technology like Iomega's to put in place simple and cheap solutions could mean that those companies not only need not fear going out of business but could think about their future in a more stable, productive way," said Sanchez.

Other key findings

• Of the businesses surveyed a quarter (25%) in the UK compared with 34% of French and 18% in Germany considered that they did not have enough time/were too busy to back up their data
• Small business in the UK, France and Germany are still reliant on paper. Among the reasons given for not backing up, the strongest reason given for not doing so was because the respondents had paper copies of their important documents
• More than half (54%) of the companies that took part in the survey considered a corrupt hard disk to be the most likely cause of data loss. The second most likely cause (43%) was considered to be deleting a file accidentally
• The survey revealed that small businesses in the UK feel especially vulnerable when in comes to computer theft. More than half (53%) of the UK survey respondents felt that the theft of their computer was a likely way of losing one's data
• Almost half of the respondents in the UK (46%) and France (49%) considered computer viruses to be a likely threat to their important data, compared with only a quarter in Germany (26%)

Technical details

MORI was commissioned by Iomega to conduct a study of UK, French and German small businesses and laptop users. 330 interviews were conducted with small businesses, 130 in the UK, 100 in France and 100 in Germany. In each case, MORI interviewed the person responsible for looking after business data held on computer. The sample was randomly selected from a list of small companies, spread across all industry sectors. Half the interviews were held with businesses with between 1 and 9 employees and half with businesses with between 10 and 49 employees. Among laptop users, only those who use their laptops regularly for business purposes were interviewed. 170 interviews were conducted in total, 70 in the UK, 50 in Germany and 50 in France. The sample was drawn randomly from a list of laptop users from across the UK, France and Germany. Data has been weighted to reflect the three country average. All interviews were undertaken by telephone by On-line Telephone Surveys Ltd. between 15th December 1999 and 13th January 2000.