There is a growing "digital divide" between multinational and technology literate Irish firms and traditional small and medium sized enterprises (SMEs), a new report shows.

The report, commissioned by the Oireachtas Joint Committee on Enterprise and Small Business, highlights a "very superficial engagement" in e-commerce by SMEs.

A lack of appropriate skills and necessary infrastructure are the biggest barriers to the adoption of e-commerce by Irish SMEs, says the report. It highlights several issues that are promulgating the digital divide, including a lack of bandwidth and power in the regions.

Just 21 per cent of Irish companies with Internet access use an ISDN line, which means the majority do not have low-cost "always on" access.

The report highlights that, although 19 Internet data centres will be completed in Dublin over the next year, only two are to be built in the rest of the State.

"If e-commerce is not solely a Dublin phenomena this issue must be addressed as a matter of urgency," says the report.

A list of recommendations includes:

the deployment of low-cost "always on" Internet access as a matter of priority;

developing a national plan for the State's electricity-generating capacity and distribution network to support e-commerce in the regions;

using digital television to provide lower-income groups with access to the Internet, e-mail and other interactive Government services; and

developing and deploying a basic IT familiarity course to workers and the unemployed.