With the global credit crunch looming large over them, and less than favourable tax conditions on the domestic front, the UK’s  small firms face an uphill struggle every day in order to compete with bigger businesses. Many see investing in IT and communicatons technologies as a way of beginning to level the playing field. New research from the New York-based market intelligence firm, Access Markets International (AMI), shows that that they spent more last year on IT services than in 2006.

The problem is, they are having to pay a lot of money for the kind of IT support that keeps them in touch with their larger competitors. At first glance, the 8% increase appears to be relatively small. However, it translates as around $500 million extra that small firms need to find in order to invest in computing, software and networking support, and other related professional services. In total, more than £20 billion is being spent on IT services by small firms. On AMI’s website, company analyst Jacqueline Atkinson, said the increase was to be expected, because businesses now rely on IT more than ever before.

“In a way, this is not surprising, as companies need to support business operations and manage their IT infrastructures with an ever-increasing range of IT products and services,” she said, ”but it confirms that IT capabilities are expanding, particularly in the realms of security, storage and networking. SMBs need to outsource expertise in order to champion added solutions.”

In addition, the study found that smaller firms employ outside IT consultants than bigger businesses. They simply to not have the resources to maintain a dedicated IT department. Only one in three firms of less than 20 employees has one member of staff devoted to managing IT service and support.

While some firms have had to cut corners in other areas of their busnesses in order to find the money to invest in what is often seen as an area vital to growth, others will have been put off altogether by the costs involved in purchasing business software, for example. The Forum of Private Business (FPB) provides software for hire, which can help to reduce these costs, but most members are still to take up the offer.

Last year, a study carried out jointly by the Institute of Directors (IoD) and broadband provider UK online found that the UK’s small businesses are risking losing business and falling behind their European counterparts becasue of their failure to grasp the benefits of the internet, such as promoting their businesses to a potentially global audience. Many do not even have a basic website. In a bid to remain stable in the present, many small firms are being forced to place their futures on the line.