One in four small firms finds it difficult to keep pace with new technology, according to a report today.
A survey found that a tenth of smaller companies do not use email and a third do not have the internet.
The poll of more than 100 businesses by Lloyds TSB showed that only half believed new technology had improved working life.
One in five said computers had taken the "personal touch" out of working relationships.
Stephen Pegge, head of communications at Lloyds TSB Business, said: "Small firms have tended to limit their use of technology to communicate and organise information, but have been slower to wake up to the opportunities these tools might present for production and distribution.
"If small businesses fail to invest for the future, they could find they are soon overtaken by more efficient and more productive competitors."
Half of those surveyed spent less than £5,000 on computers or internet connections in the past year. ..SUPL: