IT contractors need to focus more on small and medium-sized business (SMB) rather than just large companies, a market intelligence company has claimed.

International Data Corporation's (IDC) European Vertical Markets (EVM) has released research into SMBs, describing them as the 'backbone' of the western European economy.

"For IT vendors targeting this space, an understanding of the SMB market structure is crucial," said Nina Bonagura, senior research analyst, IDC EVM.

Of the ten million-plus enterprises across western Europe, 99.8 per cent employ fewer than 500 people, accounting for as much as 70 per cent of the total workforce.

As one of the region's largest, most dynamic segments, the SMB sector present significant opportunities for IT contractors, IDC EVM added.

However, there are a number of issues preventing smaller firms in the UK from employing the IT contractors they may require.

More than half of the companies surveyed by the Federation of Small Businesses (FSB) earlier this month felt current UK taxation was preventing them from employing new staff.

John Wright, national chairman of the FSB, suggested a cut in National Insurance Contributions would encourage small businesses to "take on more staff and grow their business".