Small businesses in the West Midlands have embraced new technology such as broadband and wireless networking, according to the latest quarterly survey of the sector from NatWest/SERTeam.

In less than two years, the proportion of West Midland small firms with a broadband ADSL connection has doubled to 63.3 per cent - making it the most common form of internet connection.

Just four years ago, less than three per cent of SMEs used a broadband ADSL connection.

Over the last 20 years the use of computer technology has ballooned with only 36 per cent of small businesses owning or leasing a computer in 1985.

By 1991 this proportion almost doubled to 68 per cent and currently 96.7 per cent of West Midlands small businesses rely on a computer to function day to day, compared to 92 per cent nationally.

However, while the use of computers and broad-band is now widespread, 40 per cent of West Midland small businesses do not have a website promoting their business on the world wide web.

What's more, of those that do have a website, a third, the highest figure in the country, had not updated it in over a year.

Of the 60 per cent of West Midlands businesses that have a website, only 11 per cent use it to sell goods and receive payment over the internet.

However, a further 14 per cent said they hoped to be able to accept payments for their goods over the internet within the next year.

Government regulation and paperwork continues to be the biggest bugbear facing small businesses at any one time.

That said, the problem of the general economic climate has continued to move back up the agenda of Britain's small firms.

This was the top ranked problem for most of 2003. However, six months ago it had dropped to only nine per cent of small firms reporting this as their biggest concern.

Since then small firm performance has weakened and the proportion citing the general economic climate as their most important problem has now risen to 16 per cent, a two-year high.

Pete Ferns, director of NatWest Business Banking division, said: "Advances in technology have clearly helped small businesses make the most of the opportunities available to them around the world.

"In the last 20 years we have seen the growth of computer usage, the introduction the worldwide web and the development of broadband services.

"All of this gives small firms another helping hand to make their business a success."