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					     D.

Case Studies

1997 - 2000
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I. Introduction

  In a further part of the MSSTUDY II case studies were conducted by the
  national institutes in the different countries of the European Economic Area.
  The case studies should be organised in such a way that a "learning
  process" between the different European "information communities" would
  become possible giving answers to the following questions: What shall we
  imitate, and what shall we avoid?
  As the following table shows case studies were undertaken in the areas of
  "information policy", "market development", "suppliers", "users and
  intermediaries", the "public sector" and "neighbouring markets".
  Of course, the instutional, cultural etc. environments of the EEA countries are
  very different so there is no way of fully imitating or avoiding some of the
  described positive or negative "model examples". But a careful reading of the
  case studies will give additional insights not to be found by national
  experience alone and may lead to ideas how to implement promising projects
  from abroad in an adapted form into the own "information community". This
  may be especially true, for example, for
     the information policy of Danmark;
     the financing of Internet start ups in Belgium (though adaptation is yet
      also necessary in Belgium because even there the content providers are
      nearly not reached) and
     the Austrian initiative to make the public sector more transparent by
      electronic means.
 Additionally the case study of France provides an example how a seemingly
 very promising if not not successful information policy has its pitfalls to be
 detected even by experts only in later years.
 For this study the case studies had to be shortened, editorialized and rewritten
 with a special emphasis on the criteria of European relevance. Some aspects
 of the case studies, e.g. "Is the Scandinavian information policy superior?", are
 discussed further in the "Executive Summary".
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Table 1
Case Studies of the MSSTUDY II
Subject                                                            Country
I.         Information Policy

I.1       Nationwide
          (1) The Information Society for All or: No A- or B-team - Denmark
              "Digital Denmark"
I.2       Regional Initiatives
          (2) Regional Electronic Information Service Network in   Finland
              Kuusamo
II.       Market Development

II.1      Internet
          (3) The National Markets for Search Engines              Netherl.
II.2      Market Development
          (4) The Multimedia Industry in the Greater Stockholm     Sweden
              Area at the Forefront of International Development
          (5) The Status of the Norwegian Multimedia Market -      Norway
              Learning from Below: Teachers Learning and
              Teaching Multimedia
II.3      Deviant Development Cases
          (6) Is the Teletel Success Story Hindering the           France
              Development of Internet Services in France?
II.4      Market Factors of Strengths and Weaknesses
          (7) External Financing of Electronic Information         Belgium
              Services
II.5      Convergence of Markets
          (8) UK Regional Press: Best Practice Template for        UK
              Europe
III.      The Suppliers

          (9) Il Sole 24 Ore: Bringing Economic, Financial and     Italy
              Regulatory Information on the Web
IV.       Users and Intermediaries

IV.1      Pharmaceutical Industry
          (10) Use of Electronic Information Services by           Spain
               Pharmaceutical Laboratories 1998 - 1999
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IV.2   Libraries
        (11) The Library System on the Move to Defend Its      Germany
            Central Position in the Information Delivery for
            Science, the Citizens and the Business
            Community
        (12) The Digital Library of the National Documentation Greece
            Centre (NDC)
V.     The Public Sector

       (13) HELP - An Electronic Information System of         Austria
            Austrian Authorities on the Internet and a Model
            Example of the Virtual Public Administration
VI.    Neighbouring Markets

       (14) SLS with ASTRA, the Leading Satelite System for    Luxemb.
            Digital Reception in Europe and Soon Beyond
       (15) The "Multibanco System"                            Portugal
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I. Information Policy

I.1 Nationwide

       Case Study Denmark (1)

       The Information Society for All or: No A- or B-
              Team – Digital Denmark

”The Info-Society for Everybody". A special strength of the Danish
technological infrastructure and business environment is, and hopefully will
continue to be, the result of the government policy, as stated by the Minister
of Research and Information Technology in 1995. This policy is aiming at
making the whole population info-citizens and Denmarkt the "Info-Society
for Everybody". There should be no A- or B-team, no computer illiterate
citizens.
Broad participation was considered by the Ministry of Research and
Information Technology to be very important. "The purpose is not to sell IT to
the Danes, but we will have to relate to the impact of IT on our lifes, and our
society, and how this can be used to further our overall objective." It should
be clear, however, that this is a way to broaden the electronic information
market as well. When the whole population become regular users, the
information market obviously will also benefit.
Of primary importance to attain the goals are:
 education and training at all levels;
 availability of equipment;
 accessability to use friendly systems, and necessarily,
 reasonable conditions on the telemarket.



The specific initiatives to be taken. In August 1997, the Ministry of
Research and Information Technology issued "Action for Change – IT Plan
97/98" with a description of the specific initiatives to be taken.

Area 1. Citizens' rights in the Information Society
Initiative 1.1: Fundamental rights in the information society
Initiative 1.2: All libraries to have free Internet access for everyone
Initiative 1.3: Better, less expensive Internet access
Initiative 1.4: Senior citizens and IT
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Initiative 1.5: IT must speak Danish
Initiative 1.6: Universal design

Area 2. Open Public Sector
Initiative 2.1: Self-service
Initiative 2.2: All user-oriented forms on the Internet
Initiative 2.3: A home page for every government agency
Initiative 2.4: An official E-mail address for every government agency
Initiative 2.5: Legal information freely available on the Internet
Initiative 2.6: The Danish Legal Gazette online
Initiative 2.7: The Danish Official Gazette online
Initiative 2.8: Improved service in the courts
Initiative 2.9: Testing open mailing lists
Initiat.   2.10: Internet bookstore

Area 3. Flexible Administration
Initiative 3.1: Communication between municipalities, ministries and
                government agencies
Initiative 3.2: Establishing a new distribution system for real estate data
Initiative 3.3: Establishing public address sharing
Initiative 3.4: A common, computerized visa register
Initiative 3.5: Government Intranet

Area 4. Digital Business
Initiative 4.1: Consumers' rights
Initiative 4.2: Taxing net-based services
Initiative 4.3: "Corporate Denmark"
Initiative 4.4: EDI in public procurement

Area 5. Security and Safety in the Information Society
Initiative 5.1: Bill for digital signatures
Initiative 5.2: Developing security solutions
Initiative 5.3: Privacy on the net
Initiative 5.4: Making the most of the Internet
Initiative 5.5: Twenty-first Century dates in IT systems

Area 6. Developing Computer Literacy
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Initiative 6.1: The IT lift
Initiative 6.2: Education of teachers and continuing education
Initiative 6.3: Developing state-of-the-art teaching tools
Initiative 6.4: Electronic institutions of learning
Initiative 6.5: Virtual education co-operation in the Öresund Region
Initiative 6.6: National sub-strategy for IT research
Initiative 6.7: Electronic Research Libraries
Initiative 6.8: Center of multimedia

Many of these initiatives are now well under way.



Liberalisation of telecommunication. Liberalization of telecommunication
is considered crucial to the success of the info-society and to fulfil initiative
1.3 ("Better, less expensive Internet access").
The area of telecommunication has thus moved from being a strongly
monopolised area to becoming a highly competitive one. For the users the
intended effects of the teleliberalisation should be lower prices and better
services as a consequence of the competition situation.
Danish telephone prices have for many years been among the lowest in the
OECD. But in the latest years this has changed, so that more European
countries now have as low or in one or two cases lower prices. Then in April
1998 it was demanded by the Danish government, that the telephone tariffs
in the near future should become as low as the lowest comparable in the
region. Some time ago this seemed to be the tariffs in Finland, but by the
end of 1998 the Swedish telephone tariffs are lower, and so those with which
the prices of Tele Danmark should be compared. In the period 1998-2001
16-18% decrease of the prices is expected. As several of the new actors on
the telemarket are offering their customers free access to the Internet,
expecting to earn the money on online time and later on the telephone
subscriptions, then to a certain extent the goal of "Better, cheaper access to
the Internet" will be achieved.



Libraries as the forerunners of development.                   Libraries can be
realistically chosen as "forerunners" in the development of the information
society because, e.g., 80% of the Danish population are using the public
libraries.     According to the library law the 275 local authorities
(municipalities) are obliged to establish public libraries in each municipality or
establish one in co-operation between two or more municipalities. In the first
half of the nineties the national library authority supported the development of
library automation. There by the end of 1997 out of the total of 250 only 3
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smaller libraries had not accomplished automation of the catalogue and the
circulation. In addition, 90% of the libraries offered access to external
databases, mostly to the joint Danish library database, Danbib, the article
Database, or to the database of the large academic libraries. 52% of the
libraries offer access to CD-ROMs and multimedia in the library, offering
CD-ROMs on loan as well. Software has been offered on loan in many
libraries for more than a decade. Some of the public libraries offer special
business services and act as intermediaries to external databases, often
asking a fee, which does not, however, cover the expenses of the library.
Further, you may find in many libraries a separate PC with a programme to
calculate your taxes.
144 of the libraries (58%) were in 1997 connected to the Internet. Usually
half an hour at a time may be booked.
Since 1997 the library of the Technical University of Denmark has cancelled
a large part of its periodical subscriptions and instead signed contracts with
some of the large publishers of academic journals for the delivery of such
journals in electronic form.



Information offensive in the education sector.             A network called
Sektornet (sector net), a high speed net connected to the Internet, is offered
to all schools in Denmark. All secondary schools have already joined the
Sektornet, and it was expected, that by the end of the century there would be
very few schools without Sektornet connection.
In the schools two main factors of influence on the IT development must be
considered: the requirement of sufficient IT equipment and the IT training of
the teachers. The point is, that no pupil in the 2100 municipal primary and
lower secondary schools (folkes holer) should be denied the knowledge of
computers because there is no PC in the household. Therefore the Ministry
of Research and Information Technology in accordance with the initiative 6.4
("electronic institutions of learning") has encouraged the local authorities to
find the money to provide the local schools with a reasonable amount of
modern computers (i.e. computers which are able to access and use the
Internet). The objective is one per 5-10 pupils in 2003. In a few
municipalities there are 1-7 PCs per pupil, while other municipalities do not
possess more than one per class (average number of pupils per class is in
Denmark about 20).
In 1997/98, 90% of the teachers in secondary schools used computers at
home. In 1997 there were 2.8 pupils per computer in the college of
business, in the technical schools it was 3-4 pupils per computer.
Lack of sufficient interest of the university students in IT-oriented study is
one of the threats to the intention of the IT society for all. Most of the IT
industry complain that there is a lack of people with adequate at least normal
IT education for the need of the industry. To ensure more candidates with a
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normal IT education it has been decided to start an IT college as a graduate
school where the students must have at least a bachelor degree at advance.
When fully developed in 2003 the college should have 1000 students.
Many trade unions, particularly the union of office employees (HK), have
encouraged their members to acquire skills in using IT, as part of their
training. They have for many years now arranged three courses for the
members. From a European point of view this can be seen as a model
example because qualification does not belong to the core activities of most
European Trade Unions. Unemployed people are given the opportunity to
upgrade their qualification through training – IT training as well – which is
offered free of charge. The course for acquiring a "PC driving license" in
1998 has been an overwhelming success.
For employees in public offices steps have been taken to upgrade their IT
qualifications. The Ministry of Research and Information Technology has
granted 2000 PCs (with printers, modems and Internet access) to employees
in various institutions. The institutions that were granted PCs were selected
after their applications were evaluated. 10 times as many institutions
applied, as those who were granted computers. The precondition was, that
the employees should use their spare time to follow courses and each should
obtain a "PC driving license".



"PC driving license" and other private training initiatives. Private
companies take an interest in the training of their employees, too. Many
large companies as well as some minor ones offer the employees computers
at home on loan, in some cases even as a gift, on the condition that the user
him-/herself is willing to use some of its private time for participating in
courses to use the equipment extensively. Such courses are more often
than not paid by the employers.         The government encourages this
arrangement by not making the installation of company computers in the
homes of employees an object for taxation.

Also as a private initiative from the Danish Data Association, the concept of
"PC driving license" has been initiated. This is part of a European project,
based on an idea originally conceived in Finland. The idea is that individuals
should be encouranged to test their IT skills after participating in some
courses. They are now tested for the basic knowledge in 7 important areas
of IT use. The Danish Data Association has the responsibility of authorizing
the test centers and developing the test material. At the end of 1998, 300
test centers all over the country have been authorized. This initiative seems
to be a success in Denmark. At the end of 1998 user number 10,000 had
already passed the test and 82,000 are under way (IT-brancheforeningen).
Often companies send their employees to such courses. One large bank is
said to plan for 10,000 participants over the next few years (personal
communication from one of the centers).
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Booklets and information technology class. What would appear to be a
special Danish phenomenon is the launching in 1993 of a series of booklets
on IT-topics at prices, that are very low considering the Danish market.
Each booklet is typically about 80 pages, the standard prices are today 5-6
EURO, some are even cheaper than that. In particular two publishers are
offering the booklets. Such a booklet treats one particular topic, for
instance: "How to buy a PC", or "How to start with Internet", or "Teach
yourself EXCEL". There is also one for each of the seven parts of the PC
driving license course. They are very simple, instructive and reliable, and
they have become very popular, and are sold in supermarkets and at
newsstands as well as in ordinary bookshops. More than 2 millions of the
booklets have been sold up to the end of 1998, mostly to private users. This
initiative is also helping to spread the knowledge of IT to a large group of
users. Most of these booklets may of course also be borrowed from the
public libraries.
In some cases private initiatives have also led to establishment of IT-clubs,
where groups of citizens help each other to become better IT users. In
some cases such clubs have obtained support from local authorities.



Equipment should understand and speak Danish (see initiative 1.5). The
Internet must speak Danish. This is absoluitely necessary if IT is to be used
quite naturally in the daily life of all Danes.
On the point of synthetic speech and speech recognition, Denmark is not in
front.      Development of Danish synthetic speech programmes and
programmes to understand spoken Danish has been rather slow compared
to the development in other areas of IT. It is said, that it is particularly
difficult to make such software for the Danish language, because of a lack of
precise rules for the pronounciation and because the Danish grammar has so
many exceptions. Be that as it may, but the ministry has realized, that an
extra effort is needed here. Some of the Danish universities are working in
this field, and the establishment of a Virtual Center for IT-Research may also
contribute to the speeding up of this kind of research.



Citizens with communication handicaps.               Citizens with serious
communication handicaps, whether this concerns vision, hearing, speaking
or writing handicaps (physical or mental) may benefit from the Social
Services Act (July 1998) which entitles such citizens to be supplied with
information technological assistant devices, such as computers, "speech
machines" etc. If the devices are what is called "normal consumer goods" –
such as PCs – they will be supplied at half the market price. In other cases
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the devices may be free of charge. In each County of Denmark a Unit for
Assisting Devices has been assigned.



Public information. One of the consequences of the intentions of an Open
Public Sector (area 2 above) has been that the use of the legal database with
Danish law information, RetsInfo, has become free of charge from the
beginning of 1998. In the previous 12 years of existence it was not much
used.
A committee, the Heinesen Committee, in 1998 finished its work concerning
the items of area 2 ("an open public sector"). An agreement was reached to
realize the ideas that citizens, companies, organisations and associations
should have simple 24-hour-a-day access to all public information and to
electronic self-service. Moreover, all publications from the ministries will be
accessible on the Internet. The Danish State Information, SI (part of the
ministry), is now an active agent in developing www.danmark.dk with links to
all of the 15,000 public institutions in Denmark.



The most recent development towards E-Commerce. The initiative taken
in 1994-1997 may be seen as providing the prerequisites of the information
society: penetration of equipment and good quality technical facility in the
society as well as provision of necessary education at all levels are the first
steps towards fulfillment of the vision of the information society.
Consequently, in the next phase, from 1998/99 onwards, it is considered
important to focus on the use of the IT in areas, where the population, trade
and commerce, as well as the public sector may benefit. The new initiative,
"Digital Denmark", is doing just this, beginning with "Focusing on
e-commerce" (www.internethandel.dk). Efforts to eliminate hindrances to
the E-Commerce will be made, the necessary laws and regulations will be
implemented, and the public will be encouraged to use this way of
communication and trade.
                                  *
Assessment in the context of strengths and weaknesses, opportunities
and threats.

Stengths: IT will make many daily chores basic for everybody, for instance
in trade and commerce, education, transportation, and the participation of the
population in the political and cultural development of the society. In many
instances, there will be economical benefit as well. The public sector, which
has to look for more efficient working methods all the time and try to reduce
the use of manpower, may obviously benefit.

Weaknesses: A policy might result in a lowered rate of development of
Denmark as an information society when many procedures have to consider
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the whole population instead of aiming at some technological elite. But so
far, Denmark is still among the foremost in this development. Also it may be
a weakness, that the whole society will be very much dependent on the IT,
and many things will stop, if something goes wrong (the same may be said
about electricity). If the libraries are the "spearheads" in implementing the
info-society, what about the 20 % who never visit the libraries?

Opportunities: The whole population will become computer-literate, i.e.
well equipped to act as responsible citizens in the modern society. This is in
accordance with the usual Danish social philosophy of equal opportunities.
Establishment of the Information Society for All is an opportunity to develop
the democratic functions of society, through the better possibilities for
dialogue between citizens, politicians, and public administration. When
society is more transparent, citizens' participation in the democratic
processes is made easier. In the long run it may be expected, that because
of the high degree of penetration of the info-society, the development may
lead to a more advanced society. As a byproduct, a far larger market for
electronic services and products is to be expected.

Threats: The interest of the public on the one side and of the publishers
and producers of equipment, systems and software may not fully coincide in
every case. There may be also too much regulation.
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I.2      Regional Initiatives

        Case Study Finland (2)


        Regional Electronic                  Information           Services
        Network in Kuusamo

Developing the regional and local Information Society. The national
information society strategy has recently been updated in Finland; the final
report was published in December 1998. Visions of this strategy include
safeguarding balanced regional and local information society development.
The local information society, therefore, is one of seven spearhead projects.
Its main objective consists of developing good practice in implementing
regional and local information societies and in promoting regional
cooperation and interaction and pooling of resources.
Regional electronic information network with interactive services on the Web
are being developed in a growing number of municipalities in Finland.
Kuusamo is one of the pioneers in developing municipal IT-based services to
its residents in the past ten years.
Kuusamo is a municipality in north-east of Finland in the Koillismaa region.
It is a total area of 5.815 square kilometers (one fifth of the area of Belgium)
with a population of 18,400 inhabitants. It is a highland area with forests
(60% of the area) and lakes (more than 160). It is a very popular travel
resort especially for winter sports, with over a million tourists a year.



Initiative and funding. In developing sparcely populated areas, well
functioning telematic infrastructure plays a vital role in modern information
society. Smoothly running information technology together with a wide
variety of services available via the network make an essential tool in
keeping the whole economy alive. This is also true for municipalities which
are situated far away from larger cities and for R+D conglomerations of
universities and enterprises.
Development of a local information society started 1989               when the
municipality of Kuusamo participated in a national project            of twelve
municipalities (local telematic know-how and information             society in
municipalities). Its two main aims were the development of           distribution
channels for municipal services and the utilisation of information   technology
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to carry out such services. Kuusamo also participated in another national
planning and working group in 1990: Which services can municipalities give
to their residents via information networks? Results of the national project
plan encouraged Kuusamo to be a pilot municipality in testing the feasibility
of the idea. Project PAVE (palveinverkko service) forms the framework for
developing Kuusamo municipality information into a web version.
Funding was appropriated as government subsidy from labour force district
as well as from municipalities in the Koillismaa region and from suppliers of
the necessary technology. Kuusamo municipality was and is, however, the
major source of funding for the planning and implementation of Kuusamo's
Internet service as well as for further development and maintenance.



Implementation. Early 1996 saw the first place of the present development
in Kuusamo: collecting, analysing and converting content and material
suitable for the choice of services. Summer 1996 marked a pilot of the
service and further refining. February 1997 marked the publication of the
Kuusamo web (http://www.Kuusamo fi), at the same time as the Web of a
larger regional project, the Koillismaa information network.
The structure of the Kuusamo Web has undergone further development
during 1998. New services have been added, particularly transactional
services, access to the library's registers as well as agendas and minutes of
the meetings of local administration.
The present Internet-based service is based on material planned for and
implemented in earlier phases. Renewing the graphic outline has been the
main item in developing today's services. It has also been necessary to
renew the structure and content to some extent in co-operation with local and
regional authorities. Schools have gone their own way in planning and
implementing their web pages, each according to its interests. Further
education has been organised to teachers in producing web pages.
Interactive or partly interactive sections allow the users to make a
"transaction" e.g. by
   posing a question to municipal authorities;
   making a complaint to the municipal consumer adviser;
   asking for further information from the cultural centre Kuusamo-talo;
   searching for a title in the library's collections and making a reservation;
   ordering travel information and brochures and reserving accommodation;
   adding an event to the Event Calendar;
   ordering a building permit application;
   filling in an application to decline joining municipal waste disposal
    system;
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   searching for a company or a branch in the Koillismaa company register;
   registering to a course in the summer university of the northern
    Pohjanmaa province.

An alert citizen can read the agendas and minutes of the meetings of
communal administration, councils and boards on the bulletin board. It also
gives a list of building permits granted during the current and previous year.
There is plenty of information about services by local authorities, a telephone
directory to the authorities, plenty of local statistics and history, and a good
alphabetical index. One is also able to access the larger Koillismaa Web
and keep up with ongoing IT development projects in the area.
Residents of the municipality and of the Koillismaa region are the main users:
about 60 to 70% of users. There are about 300 daily sessions. Agendas of
meetings, decisions made, the main pages of local administration
(descriptions of services) as well as travel pages, event calendars and maps
are the most popular hits.
Statistics about interactive transactions is inadequate but does, however,
indicate something like 80 interactions in a period of six months, mostly
enquiries and feedback. It is likely that all residents have not yet realised
the ease of use of the municipal telematic network in dealing with local
authorities, neither do all of them have access to the Internet via their home
computers.
Microcomputers with Internet access (with a web browser and telnet facilities
to read one's mail) are available to users free-of-charge in the library in
Kuusamo, in a local travel centre and in the town hall. In addition, it is
possible to access the Internet via microcomputers at the library of the
vocational school for a small hourly fee.



Benefits, problems and the future. The main benefits of the system are:
   improved accessibility to services which are now better and more readily
    available;
   possible to automatically transfer information from operative applications
    into a web version;
   possibility to give up certain press releases because the same
    information is available via the Web, e.g. Events Calendar;
   automated maintenance, thanks to modern technology;
   possibility to browse the library's main register as a major improvement to
    the selection of services, as well as agendas and promemorias of
    meetings; documentation, subject matters and search features are even
    better than those at the library's own client PCs.
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Problems:
   electronic identifying procedures are yet missing;        they would be a
    prerequisite to "real" transactions;
   necessity to develop services processes further to make benefits more
    concrete – there is the challenge!
   no benefits yet in production of services; limited resources and limited
    time make it difficult to develop maintenance and updating of current
    information content and network services.

Further renewal of graphics is going on as well as of updating the services.
New technology to publish current municipal notices and bulletins is being
implemented. Progress with electronic transactions (standards and methods
of identifying and encryption) will enhance the possibilities of the residents for
interactive transactions and handling their business with local authorities via
the Internet. Access to current geographical information is one of the main
projects under development. Open learning environment is also being
developed together with the Ministry of Education.
"Kuusamo's projects have roused a great interest", said a representative of
the municipality. "We hope that we are able to give an example to others
also in the future especially as to implementing a local information society."
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     II.      Market Development

     II.1 Internet

           Case Study Netherlands (3): The Market for
           National Search Engines

Market dominance of the USA. Anyone using the Internet to search for
information is quickly swamped by a bewildering amount of information
presented to search engines. The fact is, search engine services are still in
their infancy. Some of them do not have a complete listing of web sites in their
databases, others are not user-friendly and almost all of them are not fully
developed with regard to the information retrieval technology.
With a handful of exceptions in Europe, Canada, Australia, Israel and parts of
Asia, American start-ups habe received the bulk of equity injections. Since
1995, American companies have received 201.5 million dollar of the 225
million dollar total investments. The American corporations have a dominant
position in the search engine industry.
European search engine development companies face a lot of strong
competition from the major international players. But there are plenty of
entrepreneurs and investors betting that, until search mechanismus are vastly
improved, there will be room for better, faster and cheaper search engines.
Globally, the lack of native language sites is a tremendous limitation to the
further development of the market for search engines. Encouraging signs,
however, are coming from investors who finance start-ups for search engines
with a specific geographic coverage.


Conclusions concerning the Dutch market. After characterising the search
engines active on the Dutch market the national report comes to the following
conclusions concerning the home market: Dutch search engines are niche
players, which are specialised in cataloguing and listing Dutch web pages.
Dutch search engines are employed when the user wants to search for Dutch
content. In this sense, the larger American search engines are not really direct
competitors for Dutch-oriented/language search engines.
The greater issue is the fact that there are many Dutch search engines for one
small country. This is the biggest influencing factor for all Internet ventures that
rely on web advertising as the main source of revenue. The more content
sources there are, the more advertising revenue tends to be spread around.
This source of income is only assured for the larger, better-known search
engines, as they are the only ones that will generate large amount of page
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views on which advertisers rely. For many search engine companies,
advertising is the only source of income. If they do not generate the
much-needed page-views, they will lose income and eventually phase out or
be acquired by a larger competitor.
New search engines are always being developed, but to be successful in the
overcrowded market, these new search engines should add more intelligence
to the search process or should contain additional features which make them
more user-friendly with more personalised services. The development of
intelligent agents should also be mentioned here. Other conclusions include:
   Search engines should be standardised to offer a more efficient and
    methodical way of searching.
   The accent should lie on the quality of the information and not on the
    quantity. Currently, there are more than enough web pages with
    information in one form or another. Separating the good from the bad is
    important. Authorised information will become a focus point in the future.
   Content, such as news updates and financial information, is critical for
    search sites because this is the only method for gaining and keeping users.
    In brief, the companies need to supply extra value to its users.
    Creating a more personal approach towards users is important. Lycos is a
    good example of this as it offers their own personal area on the site called
    "My Lycos". In this area, users can view their calendar, check on weather
    conditions in selected cities, read the top news stories of the day, create
    their own bookmark folders and much more. Yahoo! also implements the
    same ideas. Key in this is maintaining user loyalty.
   Portal-oriented and structured search sites will prevail amidst the fierce
    competition.
    Search engines need to be pre-structured and present users with words
    and synonyms to chose from, in the search for the appropriate information.
    The business model that most search engines companies rely on, is
    based on revenue from advertising. This business model will change
    towards more transaction-based revenue.
    The trends now present in the United States will eventually take place in
    The Netherlands.
    Small search engines companies will eventually not be able to compete
    against the better-known and bigger competitors.
    Search engines will need to look for more forms of revenue and diversify
    their content.
   Advertising expenses will go to the larger, better-known search engines
    companies. The smaller companies will be acquired.
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   Emphasis should be placed on the further development of (intelligent)
    search tools.
    Only the most well known Dutch search engines, those that have invested
    in partnership and branding, will survive and make substantial profit.
     In the future, other sources of revenue will have to be tapped to ensure
    the continuation of (search engine) web sites in general.
   Many search engine companies share their indexes to broaden their
    coverage of the WWW. This makes good economic sense and improves
    the results of the search engine. When search results are good, people will
    tend to use that specific search engine more, making it attractive for
    advertisers.


    Trends. The Dutch report also emphasized the following trends:
    We may see the creation of Internet-2, which will co-exist alongside the
    current Internet, that will only supply the user with more relevant quality
    information.
 Current developments show moves towards close participation
   (convergence) of search engines with content providers. Ilse.nl is a good
   example of a company that focuses on this area. Ilse.nl has recently
   launched a Belgian search site, together with Internet provider Planet
   Internet that already has strong market presence.
    Specialisation is likely to become the standard for the future. Most current
    search engines are English based and cover the WWW in a very broad
    way. This results in a lot of irrelevant information in response to a search
    query. In the future, we may see subject specific search engines with an
    interface that is in the users native language.
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II.2     Multimedia Industry

       II.2.1 Case Study Sweden (4)

        The Multimedia Industry in the Greater
        Stockholm Area at the Forefront                                   of
   International
        Development

Ake Sandberg: The core of independant interactive media producers.
It seems that the Swedish case study consists of informative abstracts of two
other studies. So far, the most thorough study of multimedia and Internet
companies in Sweden in the years 1996/97 has been produced by Dr. Ake
Sandberg, a researcher at the National Institute for Working Life. This
study, and a special study of multimedia in the Greater Stockholm area,
indicate that Sweden – and Stockholm in particular – has a high
concentration of multimedia companies, or ”producers of new interactive
media”, which is fully comparable with New York City. Sandberg’s study of
the core of independent interactive media producers may be summarised in
ten points:
1. Sales in this new media area is expected to grow by 100 % a year. The
   typical new media company is small, with sales in the media area of
   more than 3 million, which are expected to rise to about SEK 6 million
   within the next 12 months.
2. Producer companies typically have six or seven employees, but some
   larger companies bring the average up to almost 20.
3. The new media companies are largely an urban phenomenon, with 33 %
   located in central Stockholm, a further 14 % in other parts of Stockholm,
   and 17 % in Gothenburg and Malmö/Lund.
4. The number of productions is dominated by the Internet/intranets (80 %),
   while 16 % consists of CD-ROM productions. The remainder are
   diskette-based.   CD-ROM production is responsible for a higher
   proportion of sales (about 25 %). Three quarters of the companies
   regard CD-ROM production as their core activity.
5. Only 5 % of productions are games and entertainment. Advertising,
   corporate presentations and training programmes are the main areas,
   with 26 % each.
6. Assignments are often of a broad nature, covering not only media
   products but also information, marketing and organisation. Information
   strategies tend to be on a normal assignment basis. Many companies
   also conduct other operations, often IT consultation. Co-operation
                                  202


    between producers is common – since this enables them to exploit their
    various special skills.
7. About 18 % of the companies are subsidiaries, with parent companies in
   a wide range of industries. Only 3 % of ownership are in the form of
   joint venture companies.
8. Four fifths of productions are commissioned, and four fifths of the
   customers are in the private sector. Establishment of foreign operations
   is expected to increase. This also applies to exports.
9. The major obstacles to expansion are a shortage of qualified staff and
   venture capital, and also lack of experience on the part of customers.
   These problems are mentioned by almost 30 % of the companies
   surveyed.
10. Many employees have a higher education background, particularly with a
    computer orientation. Recruitment needs will also remain greatest for
    this type of personnel over the next few years. Swedish companies in
    this sector have a higher proportion of permanent employees
    (approximately 85 %) than in some other countries, for example
    Germany. Only 25 % of the employees are women. Pay scales are
    relatively generous (approximately SEK 20,000 a month for a project
    manager), although there is considerable variation. Few employees are
    members of a trade union – less than 20 % of the companies have
    signed collective agreements, and only 60 % have any sort of union
    organisation.



Agency for Administrative Development: Independent and inhouse
multimedia resources of large companies. The agency for administrative
development has followed up the previous study with in-depts interviews with
industry and user representatives, and certain items have been updated to
include 1998/99. Further, a survey of ”in-house multimedia resources” in
large Swedish companies has been performed.
Central results are: 95,2 % of listed companies have their own media
production facilities. In 1996, the typical media company as well as the
in-house media units had 6 to 7 employees but there were also companies
with about 20 and even above 200 employees. Sub-contractors and free
lance assistance was employed to a considerable extent, although it was not
possible to obtain exact figures.
It was claimed that profitability was satisfactory, and that the most profitable
area was web production. However, many of the interviewees stated that it
was difficult to charge reasonable prices and that producers tended to
present optimistic estimates in order to win commissions. A lack of
understanding on the part of customers of the business potential of media
services and the production costs involved was said to be one of the reasons
for this problem.
                                 203


It was considered that the Swedish interactive media sector, like its North
American counterpart, holds a leading position in the world in media
development. The interviewees considered that the lead over the rest of the
world (except for the US) was 2-3 years – which is a long time in a young
industry with a very rapid pace of development. Several respondents
considered that Sweden’s lead was due to successful infrastructure
investment and a good ”background environment”. (”We are in the lead
thanks to Ericsson and Telia”.) These comparative advantages, however,
will wither away, unless other and new structural initiatives are taken.
There was ”development optimism” and a pioneering spirit as well as a lack
of any fixed work on development modus, and customers confirmed that
there was considerable ad hoc improvisation. Several companies reported
financial problems in their current state of development, in particular access
to venture capital – though the lack has eased the last two years. Lack of
experience on the part of customers was consistently mentioned as a major
obstacle to development of the industry.



Better industry analysis needed.         E.g., the understanding of the
correlation between the interactive media industry and other knowledge
sectors and the industry’s contribution to the public and private sectors
should be improved.
                                  204



II.2.2      Case Study Norway (5)



            The Status for the Norwegian Multimedia
            Market

            Learning from Below: Teachers Learning and
            Teaching Multimedia


Favourable and unfavourable factors. Given the fact that Norway seems
to be a forerunner in the uptake of multimedia technologies, the Norwegian
context appears to be paradoxical.           Along some dimensions, some
indicators seem favourable to the development of multimedia. In particular,
the general economic conditions (GNP per capita), a high level of general
education, and a relatively large cultural industry should be seen as
supportive features. On the other hand, demography and topography
produce barriers, the industrial structure is not helpful, and technology policy
is not particularly conducive.



Emphasis on developing online systems. Obviously, the emphasis today
is on developing online systems. Online services have enjoyed a rapid
success in both consumer and business markets. Offline applications, as
implemented on CD-ROMs and similar media, have not met with equal
success. A few Norwegian CD-ROM titles are still being issued every year,
but investment in this technology is quite small and the quality of the
productions has met with criticism. Even if most new PCs are sold with a
CD-ROM player, the sale of CD-ROMs has remained low.
Nevertheless, there are still some differences in the focus of online and
off-line strategies.    Offline systems are used mainly for games,
encyclopaedias, and edutainment. Online systems are dominated by search
engines, daily news as found in newspapers, purchase offers and information
on various topics.
In 1998, the total multimedia industry in Norway contains 370 companies with
a turnover of 1,100 million NOK. The Internet industry only includes already
300 organisations with a turnover of 800 million NOK. These figures are
also showing that the offline applications are no longer the driving force in the
multimedia field.
                                 205


Trend of the future: From fishing to farming? The Norwegian efforts in
the multimedia field can be characterised as fishing trips. This is due to the
fact that most efforts are of an experimental nature, showing an unclear profit
potential. Of course, there will be economic arguments supporting the need
for such experiments. After all, profits are expected in a not-too distant
future to those who find smart ways of developing or using multimedia
applications.
Metaphorically, farming is often looked upon as being the opposite of fishing.
Farming implies emphasis on planning and hard steady work. Fishing, while
being haphazard, is very hard work while it lasts, but efforts have great
fluctuations. Until now, the fishing-style multimedia is what we can see.
Whether farming-style multimedia will be possible, and what this concept will
imply in terms of practices and uptake is still the future.
The Norwegian adaptation of multimedia seems to be well on its way, but the
outcome is still undefined. It can be concluded that multimedia will be
integrated, but how, to what extent, and with what consequences cannot yet
be answered.



Learning from below: Teachers learning and teaching multimedia.
Inside the Norwegian case study there is another case study in the
”Educational Sector”: ”Teachers Learning Multimedia”. In practice, the
Norwegian system of primary and secondary education is a complicated
system of responsibilities and controls between central, regional, and local
government, with decision making by the individual school and even the
individual teacher.
However, there is definitely a national discourse on computer and multimedia
related to the sectors almost shaped by the belief that information and
communication technology is vitally important. The sector of education is
supposed to supply a skilled workforce, but also to qualify young people for
the labour market of the future. However, politicians as well as citizens fear
that the schooling system will fail to do so. This anxiety (so-called "computer
angst") has been centred on simple numerical indicators, above all the
number of pupils per PC. That indicator does not place Norway in a
particular favourable position, compared to other countries. In fact, it also
gives evidence to substantial differences between different regions, and even
between schools in the same municipality.
As a consequence of this computer angst, the Norwegian policy for ICT in
education is in a large extent shaped to provide equal opportunities of skills
in computer and multimedia. There has been less concern for what is to be
achieved through ICT in education. The general aims are quite vague and
appear to be traditional. Pupils are supposed to learn to use word
processing, spread sheets, and information databases. The ability to use
the Internet has been added lately. ICT can be identified as a tool to
                                  206


improve teaching, but only in very general terms. Since politicians and the
public are less concerned, the challenge of producing visions about the ICT
may be used to improve teaching are left to the professionals, mainly the
teachers themselves.
Nevertheless, there is an important exception there. The Ministry of
Education has strenghtened the National Centre for Educational Ressources,
which plays an important role as an overseer of experiments, as a provider of
support, as an advisor to other actors in the education system and as a
provider of information to the Ministry. For example, since 1996 it has
developed the ”School Net” as an ”electronic meeting place”, that is a site for
information and quick distribution of information (national curriculum
guidelines, discussion of software, practical use of software, articles,
seminars, etc.), a site for discussions, a place to ”stimulate the development
of a critical mass”, a place to develop competence in managing electronic
information, and a place to exchange experience.
The Guidance Net is an Internet version of an existing guidance centre. The
centre provides actors within the school system with information, ideas, and
consultation concerning ICT-related subjects. In more detail, the Guidance
Net consists of five main topics and in addition the possibility for the users to
ask and answer questions.             These five topics are:           agreements
(presentation of agreements with suppliers of soft- and hardware), IT-plans
(from counties, municipalities, and individual schools), overview of courses
(relevant literature, self study books, general discussions), software (NLS
software catalogue, Internet addresses for downloading software), and
IT-projects (individual, local, national, and international projects).
In interviews with teachers of three schools crucial factors emerged. Most
schools have one or more computer labs/class rooms where they have their
ICT teaching. For many teachers, it was a problem to have to reserve this
room days ahead. One school was a so-called ”open school”. They had no
classroom.    The computers were placed on tables with wheels and
transported to wherever needed. That is perhaps the reason that they
managed successfully with a low number of machines.
Other crucial factors were the plans for educating the pedagogical staff and
the communication between teachers and government.
Besides the local domestication strategies within schools, the interviews with
the teachers also illustrate different personal strategies of ICT integration:
The traditional teacher is using his computer at home mostly for writing.
He has some experience with ICT in one intensive computer course several
years ago. This teacher is not using ICT in his working situation, because
he has a negative attitude towards the use of ICT. One reason is the lack of
availability of computers, which lead to booking computer rooms in advance
and sharing few computers with many teachers. Thus he, as many of his
colleges, prefers working at home. This way of organising his work creates
                                 207


rather poor conditions for more ”spontaneous” learning, sharing experiences
in practical as well as pedagogical use of the computer.
The lonely innovator is enthusiastic enough to create his own methods for
ICT in teaching, but the availability of computers is the main problem. This
teacher is using ICT frequently in one of his subjects by own page on the net
with questions, essays, books to read etc. He spends about four to five
hours every evening working in different pedagogical arrangements. He is
first and foremost interested in the pedagogical aspects of ICT in education.
The lonely innovator has acquired most of his skills by himself, but he
attended a course managed by the school.
The supported enthusiast is also a frequent ICT user. He has, together
with his colleagues, developed successful ICT plans at their school with
support of the management. These plans that include pedagogical ideas,
courses, hardware and software requirements, other multimedia equipment
are also to be realised. The goal is to make each pupil manage basic tasks
like word-processing, scan in pictures, presentations, use of CD-ROMs, use
the Internet with different search tools, the School Net, and E-Mail. He
views ICT as a very good tool, but sees its limitations.
In other words, ICT in education is not just a question of regulation, or a
reform that can be directed from ”above”. The different individual strategies,
and the different local cultures in every school illustrate why the
domestication of multimedia seems to be a ”learning from below” project.
                                 208




II.3 Deviant Development Cases

       Case Study France (6)

      Is the Télétel Success Story Hindering the
     Development of Internet Services in France?

French Videotex services, a success story until 1996. As late as 1996,
the penetration of electronic interactive services in France – among both
consumers and companies – had no equivalent in the world:
 generating important volume of usage;
 allowing the development of a specific local industry;
 triggering the penetration of simple online services (telebanking, online
  ordering and forms-filing, access to company information etc.) among
  sub-populations (very small businesses, craftsmen and retailers, farmers)
  which are usually not very "fond" of interactive technology.

Notwithstanding (or perhaps because of) this previous level of development
of (videotex) online services, presently France seems to be lagging behind
other industrialized countries for the development of Internet usage and
services.



Internet, le retard français? To quote an official report to the French Prime
Minister published in May 1999: "The development of Internet in France is
lagging behind, not only if compared with the situation in the USA, but also if
compared with the situation in Great Britain, Germany, Netherlands,
Scandinavia, Australia or Hong Kong. Recent efforts do enable French
users to appreciate the benefits of Internet usage. But these efforts are not
sufficient to cancel the gap between France and other developed countries.
In many aspects, the gap is even widening."
What is commonly referred to among experts, government officials and
media specialists as the "retard français" ("French backwardness") regarding
Internet development can be illustrated by a few indicators:
 In March 1999, domain names (.com or .fr) registered by French
  organizations were representing only 6% of all domain names registered in
  Europe, a huge gap in comparison with Germany (23% of all European
  registered domain names) and Great Britain (19%).
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 In January 1999, according to a European survey conducted by IDC, there
  were 4,04 millions of regular users of Internet in France, less than half the
  total of British Internet users (8,92 millions) and German Internet users
  (10,29 millions).

Therefore the following questions have to be raised: Is the very high level of
videotex services in France a brake to a rapid development of a "net
economy" in France? If yes, why is it so, and what has to be done?



The ingredients of the Télétel success story. To answer these questions,
it is necessary to highlight the "virtuous combination" of factors which really
explain the development of videotex usage on a large scale:

 Efficient network infrastructure
  The national telco operator (France Télécom) has heavily invested, as
  early as the beginning of the eighties, in a national videotex network seen
  as a "public utility infrastructure"

 Deregulation of hosting and service providing
  The creation of public online services has been largely deregulated; this
  has permitted to all sorts of entities (companies, banks, publishers,
  associations, local authorities, etc.) to easily create hosting and relating
  services provision.

 Large distribution of "free" terminals
  A few millions Minitel terminals were distributed for free. This initial basis
  has been sufficient to stimulate the development of a large number of
  services. Even after the initial effort, most Minitel were leased – and no
  more lent for free – the voluntary creation of this critical mass of
  connected terminals has been a decisive factor of the initial "take-off" of
  the whole videotex industry.

 The Kiosque Business Model
  After the removal of technological barriers (good network infrastructure,
  large availability of dedicated terminals), the Kiosque has removed most of
  the market barriers. In fact, in this business model, usage of videotex
  services is centrally billed by the national telco operator (France Télécom)
  on the user's phone bill. This centralized billing mechanism has been
  very successful:
  - For users, it is possible to have access to thousands of different
    services without previous subscription or identification, through a simple
    and "standard" time-based pricing mechanism;
  - For services providers, revenues are secured by the centralized billing
    mechanism. Providers do not have to maintain a costly accounting
    service for billing each user. In most cases, the very small amount of
                                  210


     usage would have made this direct billing uneconomical.          The
     "mutualization" of small amounts billing through the Kiosque
     mechanism makes it economically feasible to give access to the online
     services even to occasional ("low usage") users.

All these factors are anyway related to a single fact: This model of
development has been possible because of the central role of the national
state-owned telco operator, then in a situation of national monopoly and able
to invest in a long-term plan with no obligation for a rapid return on
investment. The "return on investment" has been seen on a larger societal
scale: development of a national videotex industry, increased efficiency
because of a large dematerialization of "transactions" etc.
This model of development, though successful within the national
boundaries, also had its obvious shortcomings. First of all it has remained
confined to the French market and has never shown significant successes
elsewhere.
Most private operators (software houses, host companies, etc.) which
success have accompanied the Télétel development, have remained "local
operators" with limited possibilities to base on their national success a
significant European development. In other terms, and at the difference of
what noted in other sectors (transportation, space industries), the contribution
of this domestic "success story" to the reinforcement of the French positions
in the global economy have been nearly inexistant.



From the Télétel success story to the Internet "retard français". The
very factors which have been at the basis of the large videotex services
penetration have certainly delayed the take-off of the "Net economy" in
France:
 The "time-based" billing mechanism, typical of the Kiosque is not adapted
  to the Internet economy. For one thing, Internet users are spending far
  more time connected online – more than 8 hours per month and per user
  than Minitel users (around 1 hour per month).
 For providers which services were generating large amounts of usage
  (telebanking services, online mail-ordering, credit information, etc.) the
  secure Kiosque revenues have been very substantial and always very
  profitable (because of the very low "commercial costs" associated to the
  Kiosque business model). As the Kiosque usage has continued to grow
  regularly until 1997, there was no real incentive until then to invest in a
  new, very uncertain, Internet-based business model.
 Because of the technological predominance of videotex in France, the
  attention to the TCP/IP technology has grown rather late (since the mid
  nineties) among French firms and their information technology specialists.
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  For a long time the TCP/IP culture has been limited to a few organizations
  (among which public research laboratories and universities).

Though offering limited capabilities, the videotex technology was (and
sometimes still is) sufficient for simple transaction services like telebanking,
online ordering and booking, online directories consultation, etc. Because of
the very high level of usage already existing in France for these types of
applications, the development of usage for similar Internet services is
obeying to a "substitution pattern" (from Minitel to Internet services), and do
not follow the exponential curve which is usually characteristic of the
mass-adoption "from scratches" of new technology/services.



Optimism for the future. Notwithstanding the "hindering factors", one can
be reasonably optimistic that the Internet "retard français" will rapidly recede:
 The lower usage of Internet in France was partly related to the lower
  penetration rate of PCs in French households, if compared with other large
  European countries. As nearly all new PCs are now shipped with a
  built-in modem and a free Internet access kit, the number of connected
  households will now grow rapidly.
 All indicators show that the total number of regular users (at home, at work
  and at school) of Internet is growing very rapidly: It should reach 12
  millions in mid 2000; a level of the same order of magnitude that the one
  noticed for viodetex services. The very existence of this user base is now
  stimulating a very rapid conversion of the large existing basis of videotex
  services to Internet.
 Internet usage is already generating for the telecommunications operators
  (fist of all France Télécom) bigger revenues than videotex usage (mainly
  because of the huge number of hours of connection generated by Internet
  usage). This is a strong incentive for them to invest in the development of
  Internet usage.
 Since September 1997, the French government has launched an
  ambitious action plan aiming to remove administrative barriers to the
  development of Internet and E-Commerce in France. The level of
  awareness regarding the development of the "Information Society" is now
  very high among French decision makers.
 Within the frame of this plan, most administrative procedures and
  information services are now rapidly migrating towards Internet. The
  success of the free government Internet service (Légifrance) giving, since
  the beginning of 1999, access to all new laws and decrees and to
  numerous other regulatory materials, is a good example of this tendency.
 All international Internet companies (mostly American: Yahoo!, Excite,
  Amazon, Monster, etc.) are now developing French versions of their
                                 212


  services, thus participating to the creation of a critical mass of Internet
  services.
 According to technology experts, the very existence in France of a diffuse
  "online culture" among EDP specialists, though acquired within the context
  of the "outdated" videotex technology, is nonetheless a very good basis for
  a rapid conversion to the Internet.



Though France will catch up rapidly, the deviant development of
Videotex has not created a competitive advantage for the global "Net
economy". The Internet "retard français" is largely due to the fact that,
because of the previous high level of development of videotex usage and
industry, Internet is progressively adopted as a "substitution medium", that is
as a further and gradual evolution of the existing online market and industry.
This situation is unique among other developed countries, where Internet has
rapidly found growth reserves which had not been – at the difference of
France – previously untapped by an older technology. Nonetheless,
because of the momentum now gathered by the "Internet wave", France
should rapidly reach the same level of development of its "net economy" than
the one noticed in other European countries (the only significant gap
remaining and being a source of worries being perhaps the gap with the
USA). Notwithstanding this "optimistic" conclusion, it should be noted that
the early Télétel success story has not given to the French online industry a
significant competitive advantage which would have permitted to France to
be in the forefront of the new "Net economy".
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II.4 Market Factors of Strengths and Weaknesses

       Case Study Belgium (7)

      External Financing of Electronic Information
     Services

Capital requirements of the Internet sector. One of the most important
factors which may hinder market development is money. The good news in
the area of Internet projects is that barriers of entry in terms of investment
may be relatively weak. Nevertheless the maintenance of a dominant
position in the market necessitates very rapid access to the international
market and the ensuring of a sustained rate of growth. In order to attain this
growth objective, the operation rapidly calls for fresh capital at a time when,
in most cases, the financial results of the start-ups are still negative. As
investment decisions are generally based on an appraisal of experience and
of the previous financial results of the activity, this can constitute an initial
difficulty in terms of investment.
A second characteristic is that, contrary to traditional sectors, the life-cycle is
relatively short, sometimes even 3 to 5 years, due to the rapidity of
technological evolution and of the competitive context. As soon as the
product is launched it needs to attain maturity as rapidly as possible.
Moreoever, the Internet market is new and lacks reference. On the other
hand, the appearance of new technologies regularly modifies the competitive
context, and we can observe the almost constant emergence of new
”business models”. In this obscure context, marketing and profitability
perspectives are blurred for most investors, and the market potential is
uncertain. The difficulties which can be experienced by Belgian investment
companies are, at the same time, also situated within the international
context of the market for publishing services, and particularly for
E-Commerce projects. Indeed, it makes little economic sense to launch an
E-Commerce project only on the national market, limited in size and rapidly
saturated.



The European market for venture capital. Despite these characteristics,
the sector of Electronic Information Services, particularly that of activities
linked to Electronic Commerce, has just recently become an attractive
proposition on the stock market. The financing market which appears to
respond best to the expectations of the sector is venture capital.
                                  214


The intervention of venture capitalists can occur at various stages of
development of the enterprise. Generally, 4 phases of development can be
distinguished, with each of which a certain degree of risk is associated:
   Seed capital: this financing takes place even before beginning the
    development of the product; the product is still in the stage of creation
    or prototype and has not yet been launched in the market.
   Development capital: this second stage of investment covers the
    launching of the product in the market, ensuring the first phase of
    marketing.
   Expansion (growth) capital: this is investment for growth. The
    product has penetrated the market and is seeking to establish itself and
    flourish. The investment seeks to improve the production process and
    ensures the development of marketing investments.
   Mezzanine capital: this is the final stage, preparing the enterprise for a
    take-over bid or a management buy-out.

One of the particularities of European venture capital is its preponderant
presence at the expansion and mezzanine stages. Intervention in seed
capital, highly-valued in the USA, remains relatively marginal in Europe.
According to EVCA, the European Venture Capitalists’ Association, the
volume of investment in seed capital only represented 1.9 % of the sum
invested in 1997; for comparison: start-ups 14.7 %; expansion 77.1 %;
mezzanine 6.3 %.
There is no typical investor profile, but several: Banks 26 %, business funds
25 %, insurance companies 16 %, corporate investors 11 %, reinvested
capital gains 7 %, private individuals 4 %, government agencies 2 %,
academic institutions 1 %, others 8 %.



The virtuous circle of investment.       In 1996, venture capital funds
accounted for a total of 59 billion EURO; in 1997, this rose to 83 billion
EURO, an increase of over 40 %. This increase in liquid assets can be
explained by three factors: the appearance of new investors, the creation of
new stock-exchange markets, and economic circumstances.
New types of investors are appearing in the market, particularly for projects
linked to information technologies. Their attitude more closely resembles
that of American venture capitalists, anyway, the investors’ expertise has
become an essential element in the intervention decision. These new
investors are on the one hand ‘business angels’ and on the other hand
specialised investment companies. The ‘business angels’ are private
investors, themselves creative entrepreneurs, and ready to invest not only a
part of their personal assets in a project, but also to offer their experience of
the world of business and their expertise in that field of activity. Alongside
them a certain number of specialised companies are being created which
                                  215


offer, in comparison with traditional investment companies, the advantage of
knowing the IT sector and of having experts in it. Progressively, and unlike
the usual participants, these new investors agree to intervene upstream of
the development phase.
The creation of two stock markets just like the American Nasdaq, the Easdaq
and the EuroNM, has changed the scene. Within 3 to 5 years innovative
start-ups reasonably expect to become ”stock-marketable”. In selling their
assets, the initial investors thus release new liquid assets which can be
reinvested again. Furthermore, the macro-economic content – an inflation
rate approaching zero and the weak level of interest rates – supports
stock-market activity as well as risk investments.
A virtuous circle is progressively being created: if, a few years ago, a
start-up could only hope to attract outside investors after the phases of
creation and launch of its product, today seed capital is more readily
available and the possibilities of quick recovery exist. The amounts invested
at the start of the chain, at the creation of the start-up, are changed into new
liquid assets which can be reinvested in new start-ups.



EIS-investments in Belgium. In the area of Electronic Publishing Belgium
has the same virtuous circle as the other European countries. In 1997, 4.4
billion BEF were invested by investment and venture capital companies in the
IT-sector. However, the content sector only represents a tiny share of
the investment dedicated to the Internet, which may be explained by two
factors. On the one hand, the contents activity can form part of the general
commercial activity of an enterprise or institution. For example, this could be
the case when an enterprise decides, within the framework of its main
activity, to develop an E-Commerce site. On the other hand, the content
sector now appears to be the most risky segment of the Internet
market. In fact, in the case of users and end-customers, no dominant
business model exists. Content publishing constitutes an activity in constant
evolution, the perspectives for the development of which are still difficult to
predict.
The Belgian fiscal environment is relatively favourable towards the
acquisition of holdings in enterprises. Indeed, for several years Belgium has
experienced a situation of tax exemption on capital gains.
As elsewhere in Europe, the venture capitalists present in the IT sector, and
more specifically in the content segment, very varied profiles. Some of them
have opted for a strategy of specialization, given the specifics of the IT sector
in general and of the Internet market in particular. In Belgium, the most
important participants in venture capital in 1997 were the banks (30 %)
followed by private individuals (11.3 %). It must be emphasized that pension
funds are particularly less developed in comparison with the rest of Europe
(3.8 %).
                                   216


One investor type, however, deserves special attention.              A novice
entrepreneur wishing to finance the early step of his business may hope to
encounter a ”business angel”. This is the name given to private investors
who, in a private capacity, decide to invest part of their assets in launching
new enterprises, which they believe promise success and a return on
investments. ”Business angels” are generally businessmen who, on the one
hand have private means, and on the other hand have experience, expertise,
and a network of contacts in the specific market, from which the young
entrepreneur can profit. The risks accepted by these associates are
generally more important than those acceptable to traditional investors
inasmuch as these investment decisions are essentially based on a business
plan and the skills of the management team. Access to these somewhat
discreet participants is often effected thanks to the existence of a network of
contacts, opening doors to one or another individual. In any case, these
participants appear to be less structured than in the USA or in France where
they are federated in several organisations.



National characteristics. If the type of investors in the Internet sector do
not differ fundamentally from the European situation, nevertheless certain
national characteristics influence the structuring of venture capital in Belgium:
   Capital markets split in 2 language communities,                           the
    Flamish-speaking Flanders and the French-speaking community;
   Only minority holdings: Presently, no venture-capital company has a
    majority holding in a project linked to Electronic Information Services or
    more generally in the Internet market. The explanation for this is to be
    found in the newness of the market, which leads to a prudent attitude on
    the part of most investors;
   Public funding: Beside the financial support from the European
    Commission for the research and development of Electronic Information
    Services, there exist national public funding, most of them delivered by
    the region.

As regards the content sector, such funding comes up against two major
difficulties. On the one hand, amongst the project eligibility criteria is the fact
that it must necessarily be an innovative activity, whereas in the case of
content the innovative characteristic is difficult to prove, insofar as the project
generally consists of integrating technologies already present in the market.
Moreover, even if there has been an improvement and greater
professionalism in the way cases are processed, the time taken remains
substantial at 4 to 8 months, whereas the rapid development of the market
necessitates a culture of rapid response by all involved.
                                  217


The future evolution of venture capital. Presently the venture capital
sector generally as well as in the EIS-area is experiencing two great
evolutions – towards specialisation and internationalisation::
   Specialisation
    A weakness of the Belgian capital market, revealed both by investors and
    entrepreneurs, is the non-specialisation of venture-capital in Belgium.
    The investment companies are generalists for the most part and take on
    cases from all sectors of activity, so long as their risks can be reasonably
    measured.      This non-specialisation often creates a situation of
    information asymmetry: the Internet cases, and more specifically the
    proposals linked to the publication of contents, are frequently
    disconcerting for the negotiating financiers who often do not have the
    necessary competence to understand, appraise and evaluate the
    commercial significance of these projects and their market potential. In
    this context and in this field, sector-based expertise is becoming a
    strategic advantage for the whole of the investment and venture capital
    companies. Certain investment companies have therefore specialised
    not just in the content sector but in the high technology sector,
    surrounding themselves with experts in this field, whether they are within
    or outside the enterprise. Only one single fund, however, is presently
    dedicated exclusively to the Internet and E-Commerce (Net Fund
    Europe).

   Internationalisation
    In the future, the small number of investment opportunities with respect
    to the liquid assets available could progressively push Belgian investors
    to seek projects in foreign countries. Moreover, they are participating
    more and more frequently in investment ”road-shows” grouping together
    other European companies or funds. On the other hand, because of the
    small size of the domestic market, projects in the field of contents, still
    too few in Belgium, must henceforth become international.



What role for the public authorities? The evolution of financing methods
at last appears to question the role of public authorities in many respects:
   The public as investor
    Quite evidently, public investment companies have a role to play in the
    face of the shortage of capital liable to finance the development of new
    economic activities. They may also compliment private initiatives by
    intervening in the early phase of the cycle – the seed and development
    stage – unpopular with the other types of venture capitalists. However,
    present observation of the capital market reveals a strong increase in the
    volume of liquid assets, and an increased intervention at the seed stage
    by private companies and business angels.
                                  218


   General economic policy
    The government has just decided on a series of measures consisting of
    the progressive relief of the social charges weighing heavily on
    enterprises, directed towards low-income or unqualified workers.
    Evidently, this category of workers does not cover the bulk of those
    working in the high-technology sector or Electronic Information Services,
    who thus risk not being able to benefit fully from the new governmental
    measures.
    Tax exemption on capital gains and the recent measures on stock
    options admittedly contribute to the creation of a framework relatively
    favourable towards high-technology enterprises. But is this sufficient or
    should we imagine selective support measures for start-ups in this field?
    And how to do this without upsetting the conditions of competition
    between enterprises in place and the start-ups?

   Public investments in management training?
    Compared with the volume of available liquid assets, the number of
    projects presented seems in fact to be relatively small.                 The
    development of a business plan indeed supposes that the entrepreneur
    not only has the technical know-how relative to the nature of the project
    presented, but is also competent in the matter of management.
    Evidently, this requires a specific training initiative transcending the
    boundaries between economy and management on the one hand, and
    applied sciences on the other. But given the extreme rapidity of the
    evolution of the online publishing sector, might this not necessitate the
    setting-up of new training courses or other initiatives (continuous training,
    etc.)?

   An end to discrimination for R&D in the EIS-area
    It is also the classic modes of research and development aid which are
    put into question by the development of the Electronic Information
    Services sector. As mentioned above, for various reasons, up to now
    contents publishing has hardly benefited from research and development
    aid. Firstly, these projects linked to content publishing can paradoxically
    be judged insufficiently innovative with regard to the criteria fixed by the
    public authorities. Secondly, even when they are eligible, they are
    considered as fundamental research work: as such, development
    efforts for new products or services can only rarely claim to benefit from
    subsidies, the public intervention being limited at best to the granting of
    redeemable advances. Finally, the time-frame for processing claims is
    without doubt poorly adapted to the extremely rapid evolution of the
    sector.
    In this area, the challenge is threefold: how to redefine the notion of
    innovation to take account of the specifics of the electronic publishing
    sector? Is it possible to extensively interpret the notion of fundamental
    research to better support the sector, while at the same time respecting
                            219


the rules of competition imposed by the Commission? Finally, how to
reconcile the legitimate concern of the public authorities to avoid any
abuse in the granting of aid and support and the specifics of the
Electronic Information Services sector?
                                  220




II.5    Convergence of Markets

        Case Study United Kingdom (8)

        UK Regional Press: Best Practice Template for
        Europe

The monopolistic position of the regional press in the local advertising
market is threatened. There are currently around 130 regional newspaper
publishers in the UK, publishing nearly 1,400 regional and local newspapers.
Traditionally, the local newspaper has enjoyed an enviable, quasi
monopolistic position in the local advertising and information marketplace.
In more recent years, however, the regional press has been confronted with
competition from local radio, television, directories and specialist classified
magazines.
Nevertheless, regional newspapers are the only medium that can claim
around 94% household coverage and they are the second largest advertising
medium after television, capturing 20.3% (2,237 million pounds) of total
advertising spent in 1996, which is 36% more than the national papers. The
industry as a whole earned about 35% of its revenues from advertising and
25% from circulation. Classified represent 63% of the advertising revenue
and break down into recruitment 30%, motors 23%, property 19%, and other
(including personal ads) 28%. Depite the rise of television since the 50s and
the growth of direct mail and radio in more recent years regional newspapers
are currently estimated to capture 80% of all local advertising.



New delivery media, especially the specialist classified press, are
opening up the path into the marketplace. The competitor map in the
local information and advertising marketplace is certainly growing more and
more complex. As well as existing competitors such as radio, television,
magazines and directory publishers moving into new business areas, a whole
host of new players are making a move on local advertising revenues. As
far as the former are concerned, local radio advertising has seen strong
growth in more recent years and commercial radio stations are now eager to
build on this by developing text-based services on new media channels.
The network of local television covers far larger areas than local newspapers
and their share of the local advertising franchise is therefore diluted and their
target market somewhat different. However, with the development of digital
cable, satellite and terrestrial TV and with it the space for more television
channels, TV broadcasters will be able to benefit from a range of new
                                  221


opportunities: It is expected that the boom in channel availability will result
in the development of more localised TV channels and text-based information
services.
The regional press are also concerned about the specialist classified press
moving in on the local market in vertical sectors such as motors and property.
The classified magazines such as Exchange & Mart (motors), Loot (general)
and AutoTrader (motors) have been quick to recognise opportunities offered
by the new delivery media and these key players have already established
high profitable Web sites. In addition, directory publishers with a strong
interest in the local market such as Thomson Directories, Yellow Pages and
Scoot (formerly Freepages) are finding themselves ideally positioned to play
a central role in delivering Electronic Information Services to local
communities: directory data is particularly suited to the search and retrieval
format of interactive environments and this information – essentially classified
listings of business names and addresses – is a core element of the
community resource.
With regard to new threats, the activities of the wide grouping of online
service companies (Microsoft, Carpoint and sidewalk, Yahoo!, Excite etc.),
local electronic start-ups, and familiar names in unfamiliar guises (Virgin Net,
LineOne etc.) have caused a large amount of speculation and discussion
within the regional press over the past two years. This group consists
mainly of companies who are using electronic media to target consumer
marketplaces which in some way challenge (or have the ability to challenge)
the advertising franchise and community information provider position of the
regional press. Together with this group, regional newspapers are also
increasingly aware of the threat of their major advertising clients (e.g. car
dealers, recruitment agencies, estate agents and local authorities) taking
their offering directly to the customers via electronic delivery channels rather
than through the newspapers. These are obviously all very real threats and
ones to which the newspapers must respond.



Regional newspapers have begun to repositioning themselves as "local
content providers" independently of any particular medium. While the
range and scope of delivery channels may seem alarming, the UK regional
press have already begun to face the challenge across a variety of electronic
media and with a variety of strategies, working both on an individual and
group level. As well as individual groups developing their own electronic
publishing strategies, the UK regional press has been working together in
consortia such as ADHunter to provide a national source for classified
advertising on cars, jobs, and property, and Quartet, a similar grouping which
has developed into a bulk buying agency for the regional press. The fact
that the regional press have reacted to the situation and are doing something
concrete about it is just one reason why we believe that this is a strength
from which other people within the European Community can learn. The
                                222


situation that has evolved, whereby traditional competitors are working
together, is a model.


A model for the regional press in other European countries? In the
subsequent path of the British Case Study individual news group initiatives
and collaborative ventures are described. It is shown that there are many
paths down for the the regional press not mutually exclusive. From the point
of view of the British national report, the UK regional press can serve as a
model for the regional press in other European countries and that especially
the collaborative model developed in the UK can readily be adopted.
                                 223



III. The Suppliers

III.1 Case Study Italy (9)


     Il Sole 24 Ore: Bringing Economic, Financial and
     Regulatory Information on the Web

The offerings and the reasons for success. With a circulation of more than
400,000 copies a day, Il Sole 24 Ore is the most important Italian daily paper
offering economic, financial and regulatory information. The database of Il
Sole 24 Ore has been available online since 1984 through dedicated lines
but only since 1996 it can be reached through the Internet.
Some of the services offered are available free: visitors can, for example,
access and read the HTML version of articles published on the newspaper in
the same or in the preceeding 7 days. The complete collection of the whole
database of Il Sole 24 Ore and of other newspapers and magazines
belonging to the same group is fee-paying available in the online database of
the group.
The more traditional information is classified into different thematic areas:
fiscal regulation, stock exchange quotation, Euro, healthcare etc. The most
successful section is financial information: this has been explained with the
evolution of Italian investors market, rich of non-skilled investors needing to
find a wider financial information, which is easily available through the web
sites.
Useless to say, such a deep penetration of information delivered under the
brand of Il Sole 24 Ore is more than a reason to be proud for the company:
it points out the lack of economic/financial and legal information sources in
Italy and the difficulty of anybody to gather it. Not surprisingly, about 30 %
of the former clients of the company online databases were public
administrations, who used this service to collect information that only few
local administrations (i.e.: chamber of commerce of Milan) deliver to citizens.
Because of this lack of information, especially in the fiscal and legal sector,
the company plans to develop some new products and services addressed to
attorneys and professional accountants.
The supply of electronic information is made also of offline products.
Through the web site, in fact, it is possible to purchase the CD-ROM with the
collection of all the articles published on Il Sole 24 Ore, but also of The
Economist, the Financial Times and of La Stampa; a new issue of each
CD-ROM is published every 3 months. The group of Il Sore 24 Ore is
distributor in Italy of the Financial Times and of FT Profile, the database
provider of the Financial Times, available both online and offline.
                                    224


News on the Web are superior to the news of the print version mainly for two
reasons: news on the development of regulatory issues, for example,
request more space and cannot be published on the printed issues of a
newspaper. News can be upgraded in real-time. Usage is supported by
the brand ”Il Sore 24 Ore”: the newspaper is undoubtedly considered as
influential benchmark for business and professional operators in Italy.
Additionally, the web site is not considered in competition with the
newspaper. The former is a completely different product and has been
planned with the aim of attracting end users: 1/3 of the visitors of the web
site admitted that they are not used to buy the newspaper. Nevertheless,
the launch of new online information services is always massively supported
by the newspaper.



The customers. The transfer from dedicated lines to the Internet caused an
increase in the number of users who grew from 1,000 to 4,000 and who have
also changed in their composition. Before the advent of the Internet, 30 %
of the clients were banks and the rest was made of public administration,
consulting firms and professional men while after the introduction of the web
sites the number of firms, especially small and medium enterprises, has
grown rapidly: only 20 % of the new customers are big companies.



Visits, page impressions and revenues. Il Sole 24 Ore online is one of
the most visited Italian web sites. In February 1999, 293,000 visits and 24
million page impressions have been calculated. From March to October
1998 the growth rate of page impressions was 107 %. High usage coincides
with particular events, e.g. a slump on the stock exchange. 20,000 users
have registered on the Forum. A customer database is built up by
questionnaires, which is compiled by each client while registering for a
specific service. Even though clients are not obliged to compile the
questionnaire, about 70 % of them chose to fill in and communicate the data.
An important source of revenue for the group of II Sole 24 Ore is given by the
web advertising (both banners and sponsorships), which in 1998 has
generated 2,2 billions of lira turnover and is expected to reach 3,5 billions of
lira revenue in 1999. Both the online and offline electronic information
services are managed by the new media business unit, which has estimated
to have a turnover of 9 billions of lira for 1999, 7,6 billions lira of sales derive
from the online services business, while 16 % of the sales is due to the
commercialisation of offline products.
It has been estimated that a small (but significant) number of clients are not
in Italy. The turnover generated by these clients amounted in 1998 to 150
million lira.
                                 225


IV.     Users and Intermediaries

IV.1 Pharmaceutical Industry

        Case Study Spain (10)

        Use of External Information Sources                                by
        Pharmaceutical Laboratories 1998 - 1999

Data collection. The subject was chosen because the pharmaceutical
laboratories constitute one of the most information intensive industries. They
are also a set of relatively homogenous companies that allow an uniform
treatment. Currently a wave of merges and acquisitions takes place in the
industry a situation which created a feeling of insecurity among the
professionals. It was observed that the information professionals were
working intensively under an important stress and in an atmosphere a little
oppressive. In many cases they were very reluctant to provide information
because of confidentiality reasons and, especially, because of the strict rules
imposed. Therefore they were afraid to speak without the authorization of
their managers.
However, 36 valid answers were received that are quite representative by big
(6), medium (23) and small laboratories (7), by geographical location
(Barcelona 18, Madrid 17, Valencia 16) and by international headquarters
(e.g. Spain 11, Germany 6, France 5 and USA 5). The answers received
were also more optimistic than expected when claiming the questionnaires at
the telephone.



Organisational structure.        28 laboratories (78 %) had a library
documentation centre responsible for the most information tasks, although
only 14 of them (39 %) constituted an independent unit devoted only to
information services. 18 (50 %) had at the same time small information
services in various departments: Regulatory Affairs 16, Finance 9, Sales
Marketing 7, Juridicial 7, Medical Research 6, Technical Productions 3,
Quality Analysis 1, Data Processing 1, Personnel 1. 18 out of the 25
documentation centres of laboratories depending on foreign headquarters
received support from them. The percentage of information searches asked
to the central services varied between 1 to 18. There was no correlation
with other factors.
                                  226


Staff. On average the number of professional workers was 2.46, ranging
from 0.1 person to 15 persons. There was not a relationship between the
information staff and the number of workers in the company nor the sales
volume, except in extreme situations: very big laboratories tended to have a
little more staff than the average, and very small laboratories had part-time
staff only.
On average, each information professional might have potentially served the
information needs of up to 167 employees (taking the total personnel figure
of the company). According to the answers received, each information
professional served 25.3 users (users who asked for services at least once
per month).



Budget structure. The budget was spent according to the following items:


                                                                        %

 Journals                                                             36.13

 Photocopies of articles and printed documents                        20.76

 Books                                                                11.80

 Online databases                                                     11.06

 CD-ROMs                                                                6.80

 Internet (including online services accessed through this              5.46
 media)

 E-Mail (including costs of documents received by this way)             4.16

 Microfilm or microfiche                                                0.16

 Other                                                                  3.66


Most respondents were unable to provide figures about the information
expenses of departments others than their own or about the total information
expense of the company.



Suppliers and databases. The laboratories were asked to tell which are
their main (electronic) information source indicating their intensity of use (5 =
high, 4 = fair, 3 = little, 2 = seldomly, 1 = sleeping password or old CD-ROM
copy). Taking all scores together, the ranking of international suppliers
were: 1. Dialog 72; 2. Silver Platter 63; 3. STN 34; 4. IMS 32; 5. DIMDI
26; 6. Ovid 17; 7. Dun & Bradstreet 16; 8. Reed-Elsevier 12; 9. Swets
                                227


11; 10. Dawson 10. National suppliers scored between 78 (DOE) and 15
points (La Lay-Actualidad).
For databases the following ranking emerged: 1. Medline 143; 2. Embase
68; 3. Cancerlit 29; 4. Chemical Abstracts 28; 5. IMC Ind.Med Esp. 26;
6. WBI-Derwent 22; 7. Biosis 21; 8. PJB Pharmaprojects 17; 9. Cocerane
14; 10. Current Contents 14; 11. Registry 14; 12. Inpadoc 12; 13. IMS
R+D Focus; 14. Aidsline 10; 15. Derwent Drug File 10; 16. IMS Idrac 10;
17. Intl. Pharm. Abs. 10; 15. Reuters Health 10; 19. Micromedics 9; 20.
Psycinfo 9; 21. PJB Script 8; 22. CAB 7; 23. IAC Promt 7; 23. Scisearch
7; 24. EPO European Patent Office 6; 25. Serline 5. This list includes the
databases that were named two times and more by respondents.



Professional environment. Although many things could be improved
(status, esteem, salary, budget, resources) the general feeling was that the
working conditions of information professionals in laboratories were quite
good. The use of the new technologies and Internet was one of the most
positive aspects. The use of EIS was well accepted.
97 % of the laboratories had E-Mail available. Some respondents were very
happy with E-Mail and said that "it is beginning to replace the fax". 75 %
had a corporate web site in Spain or were significantly represented at the
headquarters web. 69 % had an Intranet in their companies. The
involvement of the information professionals in it were as follows: high
16 %;     medium 38 %;       low 20 %; zero 16 %.       70 % produced or
collaborated in the production of internal databases.         The level of
satisfaction using the Internet was rather ”medium” (56 %; for comparison:
high 33 %, low 11 %, zero 0 %).
Information professionals share frequently their working time between
information services and other tasks. They estimated their amount of time
spent in those other activities as follows:
                                 228



                                                                % of
Task                                                      non-information
                                                           activity (total
                                                             average)

 Report writing                                                 25

 Laboratory research                                            24

 Regulatory affairs                                             13

 User training                                                    8

 Intranet design                                                  6

 Archiving-document management                                    5

 Computers                                                        5

 Marketing, presentations                                         4

 Corporate web                                                    1

 Other                                                            9

                                                               100


Respondents were also asked to tell whether they act or plan to act as
knowledge manager in the companies: yes 14 %, perhaps 39 %, no 41 %,
no answer 6 %.



Trends. The respondents were further asked to rate their agreement to four
proposals according to the situation in their companies (in %):


 More and more end users carry out their own searches                 68

 The role of the information professionals is becoming more
                                                                      66
 important

 There is a shift from printed information sources                    72
 to the electronic ones

 The acquisition of printed documents (books, journals)
                                                                      65
 continues to grow




Management unaware of information.        From the opinion of the
respondents from various companies it was quite evident that the high
                                  229


management does not understand clearly the strategic importance of having
timely and good information. Although in almost 70 % of the companies an
Intranet had been implemented, the top management still resisted to change
to a more transparent flow of information and to more modern management
structures. In general there was a lack of awareness about the vital need of
working with the proper information. Managers did not know what the
information professionals did and, as a consequence, these professionals
had to fight hard to get corporate support for their activities (budget increase,
more staff, professional training ...).
There was a lack of a good infrastructure and organization in various
companies as well.        The corporate objectives were fuzzy and the
responsibilities were bad defined.



Certain separation and shortness of resources.               There was the
impression that the information professionals were worse paid, especially
less than other workers with the same university level. Also, the typical
Information Department tended to suffer some isolation and separation from
the rest of the company, although the situation appeared to improve a little
(64 % of respondents believed that their situation had improved).
Information jobs were reduced in sharp contrast to the growth of other
departments.       Respondents to the questionnaires argued that the
information staff should grow proportionally to the rest of personnel.
In most laboratories there were information budget cuts during the past
years.



Training. Many professionals complained about lack of proper training in
the new technologies, and having to self-learn. Some were worried because
the training they received was useful only for the company.



Use of electronic information and tools. A number of respondents
complained about having to work with obsolete hardware and software, but
this has to be taken in relative terms. Although probably some were not
using the last hard- or software versions, all the respondents were quite
acquainted with the current information technologies.
In many laboratories end users carried out more searches by themselves
than a few years ago. This was a positive move but there was a danger that
the user believed that the poor information he frequently found was the only
one that existed.
There was a trend to use more e-information but the real transition to
electronic media was seen clearly only in reference works as catalogues,
                                  230


directories, pharmacopeias, etc. Electronic journals were not used very
much yet because not all of them were available online and because not all
the staff had Internet access. In a few companies the management had not
provided generalized Internet access because it was worried about possible
work hindrances.
Most respondents showed to be happy with the continuous development of
new information tools and systems that they could enjoy at work. "Our tasks
are now much more dynamic". This allowed them to offer a broad range of
information services, not only on STM but also on business information. A
few respondents were informed about the use of expensive international
business databases with high added value.
There were no difficulties having to cope with all the variety of new
information resources, including the Internet.
Others reported to be excited with their Intranet because "it is very useful and
(will) allow to share information between departments". On the contrary, one
sceptic respondent declared: "information is power and it never will be fully
shared in the company".



End users. In most laboratories end users carried out their own searches.
But end users began also to think that the Internet was a panacea and with
the Internet they would be self-sufficient. Eventually they discovered that
searching was quite difficult and too much time-consuming and many went
back to the information centre to ask again for services to be done.
In some other companies end users were so busy that they never were able
to carry out their information searches.
The end users had erronous ideas about electronic journals (availability,
licences). They should be trained in various matters but training did not
seem an activity frequently undertaken in laboratories (only 8% of the
non-information tasks).
In general all the professionals quoted "good / interesting relations with
users, which show to be satisfied with the information services".
                                 231


IV.2 The Libraries


IV.2.1 Case Study Germany (11)


        The Library System on the Move to Defend its
        Central Position in the Information Delivery for
        Science, the Citizen and the Business
        Community


Problem Description. For a longer time the libraries have hold a central
position in the information delivery for science, the citizens and the business
community. With the advent of the new interactive media this position was
endangered. On the other hand, the libraries can defend their position and
even expand if they integrate the new media successfully into their offerings
and improve their service orientation to the customers. As the experiences
with the libraries in Scandinavian countries, the United Kingdom and the U.S.
show, this assessment may be quite realistic.



Methodology. To assess the innovative and modernisation potentials of the
German libraries in conjunction with Electronic Information Services current
national and European research projects with German participation in the
area of ”digital libraries” and ”integrated information systems” were screened
and evaluated. The theses which built upon the evaluation – e.g.: Shall the
libraries act as the distributors of the offerings of the hosts? The answer:
Yes, but ... – were discussed with leading German library experts.



Confirmation of the Central Hypothesis. The evaluation of projects in
different areas lead to a confirmation of the general hypothesis that the
German library system is on the move towards a successful integration of the
new interactive media and to differentiated results concerning the on-going
modernisation process of the German library system.
                                   232



    IV.2.2         Case Study Greece (12)


                   The Digital Library of the National
                   Documentation Centre (NDC)

The Development of the Digital Library of the National Documentation Center
(Athens) started in 1986 and included 7 components:
(1) gradual expansion of the printed journal collection of NHRF, to electronic
    versions;
(2) development and expansion of the Hellenic Interlibrary Loan Network;
(3) creation of digitized Dissertation Thesis collection;
(4) upgrading of the Union Catalogue of Periodicals in Hellenic Scientific and
    Technical Libraries;
(5) the creation of a gray literature collection (Digitization of conference
    proceedings);
(6) digitization and provision through Internet of Hellenic Journals;
(7) provision and exploitation of installed library databases.

As the project progressed the need for co-operation, the existence (or
non-existence) of necessary funds and the must for well preparation and
co-ordination emerged as crucial factors, as the Greek national report stated:
Financial and technological conjecture of our times do not allow actions that
are not well prepared and co-ordinated. The same is true for actions not in
connection with the present situation, serving ”bright ideas” or novelties that
can easily be doubtful. Such ideas take away the possibility for the scientific
community users to develop the technological evolution and performance.
                                  233


V.      The Public Sector

V.1     Case Study Austria (13)

        HELP – An Electronic Information System of
        Austrian Authorities on the Internet and a
        Model Example of the Virtual         Public
        Administration


The rise of electronic government services – Towards the virtual public
administraton. The growing pervasiveness of the use of information and
communication technologies (ICT) and their role as a decisive factor of
competitiveness in both industry and service sectors is generally recognised.
Austrian technology and innovation policy is thus geared not only at
improving the business environment for enhanced diffusion of information
and communication technologies and services in the enterprise sector but
also at strengthening pioneer applications in the public sector. The use of
ICT in public administration has two major functions, namely the efficient
execution of administrative tasks, the citizen- and service-oriented provision
and delivery of services by the public sector. The use of ICT for electronic
government information services fulfils the functions of information services
to retrieve sorted and classified information on demand, communication
services to interact with individuals, and transaction services to acquire
products or services online or to submit data (government forms, voting). In
addition, participatory aspects and the demonstration effects of governments
adopting ICT for Electronic Information Services have to be taken into
account.



HELP – an electronic citizen information system of Austrian authorities
on the Internet. In the context of electronic government, HELP is an
on-cost electronic on-line consumer (directory information) service,
established and provided by public administration for the purpose of the
provision of basic information and services for citizens. HELP aims at
providing 24 hour service for conducting business with public administration
over the Internet in Austria. It is aimed to facilitate access to most needed
information (documents, deadlines, addresses and phone numbers, etc.) and
provision of low cost quality services of public interest to citizens in everyday
life situations, such as birth, marriage, subsidies, driver’s license, passport,
etc. At the same time, simplification of administrative dealings via Internet
may reduce administrative costs, and even boost industry providing these
services in urban and rural areas. The provision of services in an integrated
form (”one-stop service”) is desirable when a specific information need
                                  234


necessitates contacts with a number of different administrative bodies and
can thus provide a single access point for information on a particular life
situation such as ”birth”, ”school”, ”university”, ”marriage”, etc. Among the
areas of life covered by HELP currently are
 birth;
 marriage and life-after-divorce;
 motor vehicles/driver’s license;
 passport/personal identity card;
 residence visa;
 entry-to-school;
 job;
 military service;
 community service;
 death;
 change-of-address.



HELP as an element of Austrian IS and IT policy. HELP is an integral
part of the Austrian government’s ”information society” initiative and one of
the central elements of the information technology policy strategy of the
Austrian federal government. HELP has been attributed priority during the
Austrian EU presidency in the second half of 1998, also to improve the image
of public administration through simplification of access and cost reduction in
public administration as proclaimed by the respective ministers.
The novel – and challenging – aspect of the HELP project is the complex
collaboration of public authorities nation-wide and across various
administrative levels and authorities – support to present and make their
Internet pages ”customer-oriented” from the point of view of the citizens:
vertical co-operation of Austrian administrative bodies at the federal, state
and local levels for the effective delivery of public services is complemented
with horizontal co-operation with semi-public institutions, public law corporate
bodies and the joint development with private enterprises along a
public-private partnership (PPP) model.



HELP in an international comparison. The degree of innovativeness of
the Austrian case study may be indicated by international benchmarking.
Directory services at the national level are offered – for example – in
Denmark (Danmark.dk), United Kingdom (UK government online), Finland
(Citizen handbook), Portugal (Infocid) and Sweden (SverigeDirekt), or at the
regional level in Bavaria (Bavarian Citizen Service). The novel – and at the
same time challenging – aspect of the HELP Project is the complex
collaboration of public authorities nation-wide and across various
                                  235


administrative levels and authorities – support to present and make their
Internet pages ”customer-oriented” from the point of view of the citizens:
vertical co-operation of Austrian administrative bodies at the federal, state
and local levels for the effective delivery of public services is complemented
with horizontal co-operation with semi-public institutions, public law corporate
bodies and the joint development with private enterprises in a public-private
partnership (PPP) model.
Further and finally, HELP is not only a best-practice example of the provision
of public information services, but can also serve as a model of
Public-Private-Partnership (PPP). Both the development and the actual
operation are carried out in collaboration of public authorities and private
enterprises and it is intended for the futute to finance the operating costs
increasingly through private sponsor monies.



History, organizational structure, list of services. HELP was initially
launched as an information service for citizens to assist them with dealings
with authorities in a pragmatic and unbureaucratic manner. The quantity
and quality for the information supplied is oriented at helping to guide citizens
to the most competent public administration office for their frequent issues of
daily life. HELP is designed as a platform for Austrian authorities (federal
ministries, states, municipalities, cities, government institutions, public law
corporate bodies) nation-wide and cross-institutional support and enables –
from citizen’s point of view – ”service-oriented” dealings with authorities.
HELP has initially been designed as an information service, providing
up-to-date overview of the most important dealings with authorities, and will
in a later stage of development be developed into a transaction service via
Internet. HELP is not (yet) an administrative transaction service although
transaction services are attempted through electronic filing, i.e. submission of
forms to the respective institution by the citizen, and communication services,
E-Mail contact with public servants, is also partially installed.



Organisation. HELP is an initiative of the Federal Ministry of Finance in the
realm of the Austrian government’s Administration Innovation Programme
(AIP). The HELP-Advisory Board consists of high-level public officials in the
various federal and state ministries as well as other relevant institutions and
acts as the cross-departmental co-ordination committee. Currently a total of
44 ”life situations” warranting contacts with administrative authorities are
listed in HELP. HELP itself does not handle any procedures, this remains
responsibility of the authorities which offer their own solutions. The directory
service gives a list of authorities and provides links to relevant legal
information systems. Official forms are available for download (passport,
personal ID card). However, acceptance of the forms is at the discretion of
the individual public agencies. Guided by the principle of ”sufficient and
                                   236


optimal” quality and quantity of information will be supplied following
demands and needs of the citizens. Users may provide comments,
feedback, etc. first-hand and make them publicly available in an electronic
guest book via E-Mail which for reasons of transparency are made available
on the homepage. Interested users may subscribe free of charge to receive
updates on HELP via e-mail.



Development and funding. The project development costs of EUR
1,453.500 and EUR 363.370 annual running costs will be financed equally
between the public hand and sponsoring of private companies. Following a
half-year application development phase, HELP started its operation in
December 1997 with the following project development stages. In stage 1,
information is supplied on ”signposts” in the search for the competent
authorities in a particular life situation. (”What has to be done if a child is
born”?). Since the middle of 1998 two official forms (passport, personal ID
card) are available for download and print. Since stage 2, citizens are to use
HELP for dealing with all formalities with authorities directly via the Internet,
mainly through the availability of downloadable forms available by the end of
1999. Competent public authorities are connected via HELP. Upon
completion of the coming stage 3, citizens will have access to advanced
technologies to facilitate contact with an authority through electronic
document transfer.



Issues (1): Legal and regulatory issues. An inherent problem of
innovative products and services is the operation within an unclear,
undefined legal situation. Regulatory issues regarding the development and
use of digital signatures and encryption are ongoing, including the
discussions on the EU directive on digital signatures. Accompanying
measures to be implemented before HELP may be functionally enhanced
from information to communication and (functional) transaction service
concern general electronic information service issues like
   privacy (information being transmitted cannot be read by unauthorised
    parties) and security;
   integrity (protection against unauthorised changes of contents);
   electronic identification and authorisation (one bottleneck identified is e.g.
    the lack of EU guideline on digital signatures to foster further investment
    in technology); and
   authentication (citizens and government agencies must be sure that they
    are in fact communicating with the intended party).
                                  237


Issues (2): Organisational and institutional learning. The culture of the
medium Internet may be appropriate for a complex, bottom-up process of
organisational and institutional learning based on ICTs. However, the
amount and speed of internal restructuring within authorities may also limit
the acceptance of HELP by stakeholders. One of the major drawbacks of
HELP at the moment is the availability of downloadable forms and their
limited acceptance by the public agencies (currently only by the Province of
Styria and a number of agencies at the subnational level). Some institutions
see their ”exclusive” right to disseminate information infringed. Thus, this
project is also very demanding in so far as it asks for co-innovation on the
technical as well as on the organisational and administrative side.



Issues (3): User acceptance and public access. A necessary step
towards realising the project objectives is to ensure low or no-cost access for
citizens to information needs is balanced against the need to avoid excessive
burdens on the public services. Dissemination of public information on the
Internet does not automatically imply that all citizens have equal access.
Substantial differences exist in access of the tools of the information society
(computers, modems, etc.) and computer literacy, i.e. the ability to use them.
Booths are to be installed at public offices (e.g. district offices) for citizens
without Internet access at home or at work. HELP will also be accessible
through new terminals such as web-TV and web-phone.



Issues (4): Security and trust in electronic communication. The
system must allow verification of authenticity (by electronic signature),
electronic storage and retrieval by authorised persons, and electronic
dispatch via standardised telecommunications interfaces. The current
technical ”grey areas” mostly concern advanced applications such as
electronic forms service and transactions. In addition to the basic technical
infrastructure such as access to the Internet and browser software, there may
be additional requirements such as a smart card reader for using a digital
signature stored on a smart card in the course of the transaction service.
                                  238


VI.     Neighbouring Markets

VI.1 Case Study Luxembourg (14)

        SLS with ASTRA, the Leading Satelite System
        for Direct Reception in Europe and Global
        Potential

97 % of all households receiving TV programmes via satelite or cable
covered. SLS (Societé Européenne de Satellite) was incorporated in 1985.
The satelite facility was inaugurated in 1987, and the first satelite – Astra 1A
– was launched in December 1988. Today ASTRA is the leading satelite
system for direct reception in Europe. As of 30 June 1999, 77 million
households, or 92 % of all European households receiving TV programmes
via satellite or cable, received one or more programmes via the ASTRA
system. 508 TV programmes and more than 380 radio programmes in
analog or digital format are distributed via 148 transponders to the European
countries located within ASTRA’s footprint.
ASTRA has coped successfully with the different linguistic markets of Europe
of doing business primarily with national content providers with programmes
in the domestic languages or with content providers with programmes in
different languages. This was necessary because (with some exceptions in
the field of entertainment and information) the hopes für a successful
pan-European programming have not come true.



Global reach to Asia, Australia and – hopefully – America. SES is
expanding in Asia with its co-operation partner Asia Sat. That combined
ASTRA and Asia Sat coverage extend to 74 % of the global population in
Europe, Asia and Australia. The search of a suitable partner on the
American continent was in the phase of negotiation.
With the launch of open-protocol service, 100 % compatible with the DVD-SP
standard, in addition to the other interactive service readily available, ASTRA
is actively supporting the convergence between TV- and PC-based services.



Outlining future strategies. SES outlined its future strategies as follows:
 combined growth strategy in the core business of audio-visual
  broadcasting with emphasis on direct reception: four most spacecrafts
  are scheduled to be launched before the end of 2001, partly to meet
  increasing demand, partly to enlarge the geographical zone covered to
                                 239


  include the Eastern European countries as well as the Western part of the
  CIS;
 product development through diversification of the service portfolio, mainly
  via the roll-out of bi-directional broadband communication systems via
  satellite;
 market development through better penetration of the Eastern European
  countries and the Western countries of the CIS;
 presence on the American continent and
 creation of a seamless intercontinental broadband IP distribution system,
  which allows for the establishment of a one-stop-shop for multimedia
  application via satellite with global reach.
                                   240


VI.2 Case Study Portugal (15)

            The ”Multibanco System”

Factors of innovation: ”Multibanco” as part and as a result of a global
modernization process. The ”multibanco system” was chosen as case
study because of its pioneering character, its expansion already reached and
its evolution as an an integrated platform of diversified services. Of the cited
15 factors contributing to the creation and consolidation of the system
   2 were directly European: the integration of Portugal in the European
    Economic Community, with the perspective of creating the great
    European domestic market and its opportunities (1986) and the
    experiences of other countries in this area, like Belgium and Spain;
   2 technological: the development of telecommunication and new
    information and communication technologies and the standardisation of
    methods and processes to all the system;
   2 concerned the Portuguese economy and society: the currency
    exchange crisis at the end of the 70s as well as the urbanisation and
    employment increases in the service sector of the Portuguese economy;
   2 concerned economic policy especially towards the banking and
    financial community: national and international programs and political
    actions, namely the reorganisation of the banking system and the organic
    adaptation of its direction to the new conditions: the development of
    monetary, financial and currency exchange markets, and the creation of
    new instruments of intervention of these markets; and
   7 concerned the banking institutions and financial markets:
    - the reorganization of the financial community (namely, the reopening
      of the stock exchange) and its differentiation (1974-1983);
    - the reopening of the banking activity to private initiatives (after 1983);
    - the familiarity of the Portuguese active population with the banking
      system, incited by the employees entities, and its gradual adhesion to
      more practical ways of payment;
    - the development of the deregulation process and financial innovation;
    - the beginning of a movement leading to the universality and
      polyvalence of the banking institutions, to reinforce the co-operation in
      areas of consumer interest;
    - the widening of the bank network agencies to all Portuguese regions
      and regional decentralisations of the banking services.

Thus, the ”multibanco” system can be seen as part and as a result of a
general modernisation process of the Portuguese economy, especially its
                                 241


financial sector, and society supported by, among other factors,
European-wide pressure for co-operation and standardisation (particularly
all forms of money transactions). One of the most progressive system in the
area of Electronic Commerce respective Electronic Transaction Services
(here: Electronic Banking) was set up in the bank community because
   the integration of financial institution in a worldwide community is a
    prerequisite of further globalisation and
   the institutions in the financial area have led elsewhere, indeed
    worldwide, to the creation and development of Electronic Services
    (Electronic Information Services, Electronic Data Interchange).

Once being set up, the relative smallness of the Portuguese market may
have contributed to the universality of the multibanco system - today it is
responsible for almost the totalling of the electronic banking transactions in
Portugal – and the functioning co-operation between the participating
institutions.



An evolutionary system which adds services year by year and reaches
out in the area of information as well as in the areas of good
government and administration. Essentially multibanco is a co-operation
between banks who set up a service institution (SIBS) for generating and
controlling the multibanco system. It is also an evolutionary process adding
new services year by year and reaching out to the area of information (e.g.
videotex) as well as to the areas of good government and good
administration. Important evolutionary steps were taken, for example:
1985    Beginning of functioning of the MULTIBANCO cash point machine
        (ATM) network, and consequent emission/management of
        MULTIBANCO card and Interchange Compensations
1986    Processing Eurocheques
1987    Beginning of the Automatic Payment at the sales points (commercial
        or service establishments) in MULTIBANCO point-of-sale services
        (APT)
1989    Telecompensation of cheques and effects
1990    Acceptance of credit cards in the point-of-sale services (APT)
1992    ”Publiphone”: possibility of the public telephone to impute the costs
        of the call in MULTIBANCO cards
1993    Videotex service
1995    MULTIBANCO Change Cards (PMB), a service for payment of small
        sums of money seats in ”smart” technology cards
1996    Large Transaction Payment Services (SPGT)
                                 242


1997   Tele Multi Banco, service of MULTIBANCO through mobile phone
1998   INFOCID system in 200 multimedia terminals that allows the
       common citizen to obtain printed matters, form and information about
       social security, Ministry of Finance and Ministry of the Economy
1999   Continuity to prepare for alterations caused by the introduction of the
       EURO.       Adaptation of the information system to year 2000.
       Availability of a global Electronic Data Interchange.




Since 1993 the integration of advertising in the waiting periods of the
system. Further developments of the MULTIBANCO system are:
   The Multibanco Card can also be used internationally, in Spain, Andorra,
    Belgium, UK and Italy.
   In 1998 the total number of cards went up around 13 million, referring to
    about 180 million operations in MULTIBANCO cash point machines
    (ATM), MULTIBANCO Point-of-Sale services (ATP) and PMB terminals.
   MULTIBANCO cards had an average growth in the first eight years of
    about 53.8 %, and, after 1993, of about 14.3 % (with an average slightly
    higher for the last 3 years, 15.1 %).
   The network of cash point machines was completely online, allowing both
    a high degree of control of the service and providing the companies with
    maintenance to the system an automatic warning service for all
    malfunctions. This online characteristics allow the use of the waiting
    period of the system for showing advertisments (since 1993). The
    flexibility of the network allows the provision of some services only for
    customers of a given bank, or even for selected customers of that bank.
   The advantage of, e.g., the automatic Payment Terminal can be
    summarized in six concepts:
    - the universality of the system allows the acceptance in the same
      terminal of all the cards: national or foreign and debit and/or credit
      card;
    - the securing and velocity of the operation of payment and deposit;
      each sales point only needs a type of terminal, what expresses
      comfort and easiness of use and economies of scale for all;
    - lower costs than in any other form of payment.
   If considering the total value of the purchase in the APT MULTIBANCO
    network we have ”other retail commerce” (33 %) in first place;
    immediately after we have ”hypermarket and supermarket” (32 %); in
    third place ”restaurants and hotels” (14 %). With inferior than 10 % are
    the ”oil companies” (8 %), the ”wholesale trade” (5 %), the ”collective,
    social and personal services” (4 %), ”other transport, warehouse and
                           243


communication” (2 %) and both with 1 % the ”bank and financial
institutions” and the ”transformation industries”.      The remaining
economical activities have an inferior weight than 1 %.

				
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