U.S. businesses are expected to spend $688 billion on information and communications technology this year, with small businesses accounting for about a third of the total, a new study shows.

According to Compass Intelligence, a Scottsdale, Ariz.-based research firm, small businesses will boost ICT budgets by up to eight percent a year, spending $280 billion by 2012.

That growth will be driven by a need to leverage new technologies to better connect with business partners and customers through hosted services, mobile access  and other networking tools, Compass Intelligence CEO Kneko Burney said in a statement.

"Beyond 2009, I expect to see the emergence of Web 3.0 for commercial businesses, where firms will use a combination of social networking, content and contact management and e-commerce to generate new revenue," Burney said.