Independent research, commissioned by a leading internet company, suggests small and medium sized (SMEs) firms are failing to invest in new technologies and could be losing their competitive advantage.

The study is accompanied by a stark "adapt or die" warning for organisations that are not keeping pace with technology.

E-commerce: 'Vital for growth'

The report suggests that while most Scottish SMEs realise doing business via the internet - e-commerce - can level the playing field with bigger competitors, only a quarter are do so, compared with a third of similar-sized companies elsewhere in the UK.

The survey points to greater psychological resistance to technological change north of the border, deriving it says, from a fear of change.

Jeremy Mooney, spokesman for Nortel Networks who commissioned the report, said: "This research finds that Scottish SMEs acknowledge the need for technology to support future business growth, but that worryingly, internal constraints are preventing the required technology investment.