While many corporations are thinking of ways to discourage their staff from using social media sites, small businesses are actively embracing social networking as a way to develop sales That's according to new research from freelancer company PeoplePerHour.com which also found that SMEs believe that the government should be doing more to encourage innovation in the technology sector.

The survey revealed that the most popular social media site for small businesses was Facebook, which was ahead of LinkedIn and Twitter. Rather surprisingly, location-based social media site, FourSquare, was also seen as making headway with 9 percent of companies in the survey using the website.

"The survey illustrates just how resilient and adaptable small businesses have become in the face of some pretty tough economic conditions," said PeoplePerHour founder and CEO Xenios Thrasyvoulou.

"It's worth remembering that a key plank of the Government's strategy is for the private sector to drive the economic recovery once public expenditure is cut."

"Entrepreneurs are clearly leading the field in incorporating all aspects of technology into their business model. This can vary from a mother using broadband access to set up a business from the home to a more sizeable company leveraging the marketing and networking potential of social media sites like Facebook, LinkedIn and Twitter."