Understanding the potential macroeconomic impact of the

Document Sample
Understanding the potential macroeconomic impact of the Powered By Docstoc
					      Understanding the potential
     macroeconomic impact of the
  implementation of technologies for
digital business ecosystems in Europe


 Characteristics of the Potential users of the DBE


                      Lorena Rivera León
                      European Commission
                 DG Information Society and Media
              http://www.digital-ecosystems.org
     The power of DBE in promoting regional
                  development

• DBE is a powerful instrument for narrowing the knowledge
  and wealth gaps among different regions in Europe
• DBE allows business connectivity and global talent
  identification
• DBE allows SMEs to increase their opportunities to
  integrate themselves into global value chains and global
  production networks
• DBE provides SMEs with more and better opportunities for
  upgrading their IT capabilities




             Lorena Rivera León – European Commission   # 2 of 32
   Who are the potential users of the DBE?
• Every business entity in Europe, irrespective of the size of
  the enterprise or the sector of activity
• DBE especially oriented to support connectivity among
  SMEs but also between SMEs and large enterprises
  around Europe
• There are more than 17 million SMEs in EU-25 (non-financial
  business economy)
• In 2003, 99.8% of EU-25 enterprises were SMEs.
      •   91.4% of micro enterprises: 1 to 9 employees
      •   7.3% of small enterprises: 10 to 49 employees
      •   1.1% of medium enterprises: 50 to 249 employees
      •   0.2% of large enterprises: more than 250 employees


 Necessity to study European business characteristics,
                   focusing on SMEs
                  Lorena Rivera León – European Commission   # 3 of 32
                                        Large presence of SMEs
                                SMEs per 1,000 population in EU-25, 2003




Source: Eurostat – Industry, Trade and Services, 2006

                                    Lorena Rivera León – European Commission   # 4 of 32
                   Large presence of SMEs

• In average, there are 38 SMEs per 1,000 population in
  EU-25 (2003)
• Countries above this average are:
   – Italy, Spain, Czech Republic, Portugal, Hungary, Slovenia, Cyprus
     and Luxembourg
• Implementation of DBE would be particularly beneficial for
  these countries
   – These countries would benefit the most, in relative terms, from
     early implementation of the DBE




                Lorena Rivera León – European Commission   # 5 of 32
                      Large presence of micro enterprises
                               European enterprises by size (totals), 2003




Source: Eurostat – Industry, Trade and Services, 2006
                                    Lorena Rivera León – European Commission   # 6 of 32
                      Large presence of micro enterprises
                  European Micro enterprises per 1,000 population, 2003




Source: Eurostat – Industry, Trade and Services, 2006
                                    Lorena Rivera León – European Commission   # 7 of 32
               Dominance of micro enterprises
• Demography matters, but also the industrial structure of each country
• In average, there are 35 micro enterprises per 1,000 population in EU-
  25 (2003), in comparison with just:
        • 3 small enterprises per 1,000 population
        • 0.5 medium enterprises per 1,000 population
        • 0.1 large enterprises per 1,000 population
• Countries above this average are:
        • Micro enterprises: Italy, Spain, Poland, Czech Republic, Portugal, Hungary,
          Slovenia, Cyprus and Luxembourg
        • Small enterprises: Spain, Portugal, Sweden, Austria, Denmark, Estonia and
          Luxembourg
        • Medium enterprises: Czech Republic, Denmark, Slovenia, Lithuania, Latvia,
          Estonia and Luxembourg
• The industrial structure of these countries explains the proliferation of
  SMEs within their territory
• Political (incentives), economic and social frameworks can also
  influence the industrial mix: i.e. Luxembourg


                    Lorena Rivera León – European Commission   # 8 of 32
                         SME concentration in 5 countries
                                         SME distribution in EU-25, 2003

• More than 65% of EU-25 SMEs are concentrated in 5 countries
• Italy and Spain have more SMEs (in number) than 20 countries in the
  EU-25




Source: Eurostat – Industry, Trade and Services, 2006


                                   Lorena Rivera León – European Commission   # 9 of 32
           SMEs as drivers of the European economy
Number of persons employed, 2003 (% share of total)                                Value added, 2003 (% share of total)


•    SMEs employ about 67 per cent of                                        •   SMEs generate more than half (57
     the European workforce (EU-25,                                              per cent) of EU-25 value added.
     2003).                                                                  •   They generate 57 per cent of the
•    They employ 69 per cent of the                                              value added in the Czech Republic,
     workforce in the Czech Republic, 79                                         68 per cent in Spain and 70 per cent
     per cent in Spain, 82 per cent in Italy,                                    in Italy.
     74 per cent in Latvia and 71 per cent
     in Lithuania.




Source: Eurostat SBS size class


                                  Lorena Rivera León – European Commission         # 10 of 32
        Different business/industry structures within the EU-25

   • Special focus on Italy and Spain: high importance of micro enterprises
     in terms of employment and value added when compared with the
     EU-25 averages.
                  • In Italy, micro enterprises account for 47.1% of total employment and 31.7% of
                    total value added.
                  • In Spain, micro enterprises contribute to 38.6% of total employment and 26.8%
                    of total value added.
                  • In these two countries, large enterprises accounted for a relatively low share of
                    employment and value added.
   • The use of DBE could be highly beneficial for these countries.

   • In Slovakia, the United Kingdom and Finland large enterprises have a
     relatively large presence within the non-financial business economy.




Source: Eurostat SBS size class and Schimiemann, 2006


                                    Lorena Rivera León – European Commission   # 11 of 32
                                    A vulnerable SME structure
                                        Total SMEs growth rate, 1990-2003
   •     The countries with the largest concentration of SMEs have seen their number of SMEs decrease
         considerably in the last 10 years
   •     A change in industrial dynamics is not plausible, given the short period of time
   •     SMEs large mortality rate due to vulnerability
   •     DBE as a tool for reducing SMEs vulnerability




Source: Eurostat – Industry, Trade and Services, 2006 and Observatory of European SMEs

                                     Lorena Rivera León – European Commission            # 12 of 32
                         SMEs serving primarily two sectors
                                                      SMEs by sector, 2001
   •     SMEs concentrated in two sectors: services and trade
   •     Manufacturing industry less important by number of enterprises but relevant in
         value added and employment




Note: Numbers are presented in thousands SMEs.
Source: Eurostat – Industry, Trade and Services, 2006 and Observatory of European SMEs
                                     Lorena Rivera León – European Commission            # 13 of 32
              SMEs structure by country and main activity, 2001




Source: Eurostat – Industry, Trade and Services, 2006 and Observatory of European SMEs
                                     Lorena Rivera León – European Commission            # 14 of 32
                                SMEs and employment change
         Changes in employment by size class and sector, EU-25: 2001-2003 (overall % change)

•    The overall percentage change is the net result of gains/losses through movements
     between activities, between size classes (enterprises that grow or shrink), and births
     and deaths of enterprises.




Source: Eurostat SBS size class and Schimiemann, 2006

                               Lorena Rivera León – European Commission   # 15 of 32
                   SMEs structure by country and sector, 2003

 •    SMEs accounted for more than 75 per cent of persons employed in EU-25 in
      the construction sector, and hotels and restaurants. They also accounted for
      more than 50 per cent of total employment in manufacturing, distributive
      trades and business activities.

 •    SMEs contributed to more than 75 per cent of total value added in the
      construction sector (EU-25, 2003), and for more than 50 per cent in
      distributive trades, hotels and restaurants and business activities.

 •    The Italian case. Special role of Italian micro enterprises in distributive trades,
      real estate, renting and business activities, construction and hotels and
      restaurants.
        – They provided an absolute majority of sectoral value added and up to two thirds of
          the workforce (share of total employment between 58 per cent and 67 per cent).




Source: Eurostat SBS size class and Schimiemann, 2006


                                  Lorena Rivera León – European Commission   # 16 of 32
        SMEs by main activity in the 5 largest countries
   •     SMEs are concentrated mainly in 4 activities
   •     Business services SMEs are predominant in Italy, Germany and France
   •     Construction SMEs are concentrated in the UK
   •     Manufacturing industry SMEs are dominant in Italy, with the largest value added in the
         EU in 2000
   •     Retail trade SMEs are predominant in Spain.




Note: Numbers are presented in thousands SMEs.
Source: Eurostat – Industry, Trade and Services, 2006 and Observatory of European SMEs
                                     Lorena Rivera León – European Commission            # 17 of 32
                              SMEs and labour productivity
 •    Apparent labour productivity: measure of the average value added (or wealth
      created) by each member of the workforce within an enterprise.
 •    In 2003, apparent labour productivity in the EU-25 was highest for energy,
      mining and quarrying, and lowest for hotels and restaurants.

 •    In manufacturing, construction, hotels and restaurants, and transports and
      communications, there is a pattern of increasing labour productivity according
      to the enterprise size.
        – Mainly due to economies of scale.
        – Connecting enterprises through DBE will help them to increase their productivity


 •    In mining, quarrying and energy activities, micro enterprises recorded the
      highest labour productivity in EU-25.

 •    In distributive trades, real estate, renting and other business services, SMEs
      had higher apparent labour productivity than large enterprises.

Source: Eurostat SBS size class and Schimiemann, 2006


                                  Lorena Rivera León – European Commission   # 18 of 32
          But... Are these SMEs engaged in e-business?
                                      The e-Business Index 2006 by firm size
   •      Yes, but with great differentials in comparison with large enterprises
   •      Average SME Index equal to 62 for the use of ICT networks
   •      Weak use of internal applications and supply chain integration (especially among micro
          enterprises)
   •      Relatively important use of e-Marketing and sales




Note: Index = 100 for Large enterprises.
Source: E-business W@tch, 2006
                                       Lorena Rivera León – European Commission   # 19 of 32
          E-business differentials by firm size (small vs. large enterprises)
                                  Connectivity matters for Small Enterprises!




Source: E-business Survey, 2006
                                  Lorena Rivera León – European Commission   # 20 of 32
          E-business differentials by firm size (small vs. large enterprises)
                                  Connectivity matters for Small Enterprises!


   •     There are not large differentials between large and small enterprises when connecting
         online with suppliers and customers.
   •     54 per cent of small companies place orders for supply goods or services online. 38 per
         cent of total order up to 10 per cent of goods/services online, and 16 per cent more
         than 10 percent.
   •     There are no differences between small and large enterprises when receiving orders
         from customers online.
           –   The sectors connecting/receiving online orders from customers more frequently for small
               companies are: Tourism, Telecommunications and the Pulp and Paper sector.
           –   Most important sectors for large companies when receiving orders from customers online are:
               Telecommunications, Tourism and Consumer electronics.
           –   Small enterprises in Poland, Finland and the United Kingdom are those which receive the
               largest share of orders from customers online in the EU-10. The lowest performers are Italy,
               Spain and the Netherlands.


   •     84 per cent of small companies consider that “e-business” constitutes a part of the way
         they operate, in comparison with 81 per cent of large enterprises (E-business Survey,
         2006).


Source: E-business Survey, 2006
                                  Lorena Rivera León – European Commission   # 21 of 32
                          E-business differentials by firm size
                           Overall index (based on firm-weighted data), 2006

  •     Overall Index: ICT networks, e-
        Integration of internal processes, e-
        Procurement and supply chain
        integration, e-Marketing and sales
  •     There is approximately 50 SMEs
        engaged in e-business for every 100
        large enterprises.
  •     Benchmarking ICT adoption and e-
        business by country is complex.
        Results could reflect other factors such
        as industry structure.
  •     However, Nordic countries are in
        general the most active users of e-
        business among SMEs.
  •     Differences are not pronounced and not
        clear among countries like France,
        Germany, Italy, Spain and the UK.



Note: Firm-weighted data express e-business adoption as “% of firms within a size-band with a certain activity”.
Source: E-business W@tch, 2006

                                       Lorena Rivera León – European Commission             # 22 of 32
              Impact of industry structure in ICT use for business
                                  E-business index 2006 for 10 EU countries

  •     Finland is the e-business benchmark in a
        comparison of 10 EU selected countries.
  •     The connectivity between enterprises is
        quite advanced in Finland, Sweden and
        Denmark, compared to most other EU
        countries.
  •     The results of the benchmarking suggest
        a pronounced digital divide between
        small and large firms.
          –    In Italy, sectors dominated by small firms
               are much more prevalent than in other
               countries. This structure is reflected in the
               score of Italy in the benchmark.
  •     The DBE, as a ‘non-traditional’
        application of ICT for business, could
        help the sectors (and SMEs) of these
        countries to overcome the digital divide.


Note: Benchmark based on firm-weighted data (Indexed values: highest score = 100). Firm-weighted data
express e-business adoption irrespective of the size of the company. Results are mainly determined by the
situation in smaller firms, as there are more small companies than large ones.
Source: E-business W@tch, 2006
                                      Lorena Rivera León – European Commission            # 23 of 32
                             SMEs and Open Source Software
                                                  Companies using OSS
  •     OSS systems may help to
        “unlock” SMEs from specific ICT
        service providers
  •      The use of OSS increases
        sharply by firm size
  •     Operating systems based on
        OSS are widely used by large
        companies (47 per cent). This is
        not the case for SMEs (only 13
        per cent of total).




Note: The total is weighted by employment and should be read as “enterprises comprising … % of employment in
the 10 sectors”. Figures for size-bands are in % of enterprises from the size-band. SMEs average is the average
from micro, small and medium enterprises.
Source: E-business W@tch, Survey 2006
                                      Lorena Rivera León – European Commission           # 24 of 32
           SMEs and Internal Process Integration

•   The DBE provides support for management by enabling transparency of all
    business processes.
•   The DBE also supports collaborative and cooperative processes within and
    between SMEs (i.e. information and knowledge sharing).
         • ‘Cooperation’ means splitting a common task into sub-tasks which are performed by
           different SMEs involved in the cooperation.
         • ‘Collaboration’ means that several SMEs work together on the same task at the same
           time.
•   The DBE supports cooperation among enterprises participating in a value
    chain (or global value chain)




                      Lorena Rivera León – European Commission   # 25 of 32
        SMEs and online cooperation and collaboration within
                         the value system
                                                    Percentage of firms


               50

               45                 47
               40                                          41                                         41
               35

               30

               25
                                                                                     25
               20
                           20
               15
                                                    14                                           14
               10
                                                                             9
                5

                0
                    Share documents in          Manage              Collaborative design      Collaborative
                     collaborative work     capacity/inventory           processes       forecasting of demand
                           space                 online

                                                         SMEs average       Large

Source: E-business W@tch, Survey 2006

                                 Lorena Rivera León – European Commission           # 26 of 32
                                   SMEs and B2B online trading
                                                     Percentage of firms

  •     In average, only about 11% of SMEs
        use software solutions or internet-
        based services for e-procurement.
  •     There is a massive gap between the
        percentage of SMEs placing at least
        some orders online (53 per cent)
        and those that use special software
        for this (11 per cent).
  •     Companies which do not use a
        special software, place orders
        mainly through websites or
        extranets of suppliers.
  •     The digital back-office integration of
        procurement related processes is
        not advanced in these cases.



* Notes. The analysis is driven in 10 sectors: food and beverages, Footwear, Pulp and Paper, ICT manufacturing,
Consumer electronics, Shipbuilding and repair, Construction, Tourism, Telecommunications and Hospital services.
Source: E-business W@tch, Survey 2006

                                      Lorena Rivera León – European Commission          # 27 of 32
                           SMEs and supply chain integration
                            Use of SCM and ICT links with suppliers
  •     Supply chain management (SCM)
        software can help companies to match
        supply and demand through integrated
        and collaborative interaction tools.
  •     In average, 11 per cent of SMEs have
        adopted a SCM system, in comparison
        with 34 per cent of large firms.
  •     The share of SMEs reporting ICT links
        with suppliers is lower than the share
        with an SCM system.
  •     Possible explanation: many SMEs have
        software for managing their inventory
        and supplies internally, without
        integrating suppliers directly through the
        system.
  •     This reveals that they use a form of
        SCM which is not interactive between
        different companies.

Notes. The total is weighted by employment. Figures in size-bands are in % of enterprises from the size-band.
Source: E-business W@tch, Survey 2006

                                       Lorena Rivera León – European Commission           # 28 of 32
         SMEs receiving orders from customers online
                                                  Percentage of firms
  •    In average, 26 per cent of SMEs enable
       customers to order products online.
  •    There is practically no difference
       between SMEs and large companies in
       this respect.
  •    The e-commerce share is higher in ICT-
       related industries (ICT manufacturing,
       telecommunications) and in tourism.
  •    There is a gap between the percentage
       of SMEs receiving at least some orders
       online (26 per cent) and those that have
       special software for doing so (11 per
       cent).
  •    This confirms that SMEs use rather
       “simple” forms of e-commerce: receiving
       orders by e-mail without any system
       integration of the related information and
       document flow.


Source: E-business W@tch, Survey 2006

                                   Lorena Rivera León – European Commission   # 29 of 32
            Similar drivers for the uptake of e-business between
                         SMEs and large enterprises
  •     The most important reason, as stated by SMEs, to engage in e-business is to
        “gain competitive advantage”. While the most important reason for large
        enterprises is “Customers’ expectations”.
  •     “Suppliers’ expectations” are less important as a driver of e-business adoption
        for SMEs. These results indicate that customers have more negotiation power
        than suppliers.




Notes. The total is weighted by employment. Figures in size-bands are in % of enterprises from the size-band.
Source: E-business W@tch, Survey 2006

                                       Lorena Rivera León – European Commission           # 30 of 32
               SMEs drivers for the uptake of e-business
  •    There are some sectoral differences when analyzing the SMEs drivers for the
       uptake of e-business.
  •    Customers are clearly the key driving force in tourism and in ICT-related
       industries.



  •    Evidence of the existence of new forms of ICT-enabled customer service.
  •    Customers are increasingly being integrated into planning, decision making and
       production processes.




        DBE helps SMEs to connect with potential customers
                          and suppliers


Source: E-business W@tch, Survey 2006

                                   Lorena Rivera León – European Commission   # 31 of 32
     Why the SMEs are not yet adopting the DBE?

• The DBE cannot be adopted by 1 single SME.
• A critical mass of adopters within a specific territory is necessary to
  guarantee DBE sustainability

• There is a need of policy development at the regional level, driven by
  the regional/local catalysts
• Regional/local catalysts would ensure that these actions are taken by
  the local authorities/government, industry associations, and any other
  entity that has the capacity to influence policy making in favour of the
  DBE adoption.




                   Lorena Rivera León – European Commission   # 32 of 32

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:7/31/2012
language:English
pages:32