Security concerns are discouraging business use of Web 2.0 technologies such as wikis and blogs despite widespread enthusiasm about their potential.

Almost 70 per cent of executives say social networking applications could boost worker efficiency, according to a survey by the Economist Intelligence Unit and KPMG. And 75 per cent of the 472 respondents believe that Web 2.0 technology will fuel innovation in their business.

But half say that the need to protect important data is standing in the way of adoption. And 45 per cent of respondents do not know how the tools relate to their business.

"Web 2.0 is not just about novel consumer technology," said KPMG chairman of technology Crispin O’Brien.

"There are real business benefits to be derived from enabling more effective knowledge sharing and collaboration among employees.

"The challenge for the technology industry is to communicate these benefits effectively and address the concerns that remain around security and relevance to different industries."