‘Digital divide’ among European entrepreneurs: Which types benefit most from ICT implementation?

•We investigate which types of entrepreneurs adopt and use ICT more frequently at work.•Employers adopt and use ICT more than solo self-employed.•We also examine the relationship between ICT use and entrepreneurial earnings.•Earnings rise with ICT usage frequency from a threshold level: around 25 per cent of the time.•The increase in earnings associated with ICT use is greater for employers. This paper explores the extent to which information and communications technology (ICT) is used by different types of self-employed individuals and how it affects their earnings. We investigate independent own-account workers (IOA), self-employed with employees (SEwE) and dependent self-employed workers (DSEW). Using recent survey data for 35 European countries, we find that earnings rise with the level of ICT use but only from a threshold of utilisation accounting for at least 25 per cent of the time. Moreover, we find that the increase in earnings associated with ICT adoption and usage is larger for SEwE types when compared to both IOA and DSEW. Finally, we find an indirect negative inertia effect of job tenure (i.e., entrepreneurs who have been running their business for a relatively long period of time) on earnings (via low ICT adoption and use). Policy implications are also discussed.