CORDIS Archive

August
2002

Wake-up, take-up, and shake-up

Small and medium-sized enterprises (SMEs) are the main source of new jobs and are crucial to Europe's competitiveness in the global market. Yet most of them find it very difficult to fully exploit digital technology. The Information Society Technologies (IST) programme is helping SMEs to do e-business, though that often entails drastic changes in how they work.

In the networked economy of the future, SMEs will no doubt operate as nodes in an extended virtual enterprise. But they are currently stopping short on the road to e-business, with internal and external e-mail plus perhaps a rudimentary website. They usually lack the technical skills they need to capitalise on digital technology, and often get locked into systems they have built up piecemeal. It doesn't help that the regulatory environment for cross-border e-business can be complex and payment transactions uncertain. Worst of all, many SMEs remain unconvinced of the usefulness of e-business for their operation. Key Action II of the IST (Information Society Technologies) programme supports projects to encourage SMEs to do more business electronically. Since it began in 1999, around 70 such projects have started, involving hundreds of SMEs, together with the many academic and other organisations that work with them. These projects are making SMEs radically alter the way they do business.

Satisfactory results

IST projects are of three types: trials, best practice actions, and demonstrations. A study completed in February 2002 looked at 41 randomly chosen take-up projects - 20 trials and 21 best practices. They are categorised by business sector, technology, and thematic area. Quantitative scores are backed up - and occasionally modified - by qualitative comments. The best practice projects concentrate on themes to do with market exploitation, such as e-business, e-commerce, supply chains, dissemination, and e-logistics. Almost half of the best practices are connected with supply chain management. Trials more often assist early adaptations of promising technologies, including authentication, encryption and digital rights.

There is a nice spread of projects across a range of different business sectors. Overall, services account for 63% of the projects, industry and manufacturing 21%, and primary or basic economic activities (agri-food, oil and gas, etc.) 16%. In fact, ICT alone accounts for 17% of the projects assessed. This is followed by both textiles and shoes; general manufacturing; and services and logistics, each sector representing 10%. The geographical spread is impressive, with 30 countries represented in the project portfolio, including all 15 EU Member States. Taken together, France, Italy, Germany, Spain and the UK account for almost half the projects.

The study assesses how well the projects suit their categories, and whether they use suitable methodologies - only 15% of the projects are rated as low on these criteria. It also lists the results to be produced - products, services and best practice business cases. The trial projects are rated as being more innovative, with only 10% judged below average for innovation. On the other hand, only 20% of the best practice projects are rated as being more innovative than average.

The report also describes the status of the EU's GoDigital initiative for SMEs, and evaluates the IST project portfolio's contribution to it.

While the SME take-up projects are assessed as generally positive, one proviso is that EU-funded research will need to be better co-ordinated with regional and national initiatives. In the run up to 2010, the main requirement is for support to the mixed economy of SMEs. So far, the principal focus has been on helping SMEs to develop their businesses, a model which must become more flexible. Developing technologies that offer visible benefits is the first step towards effective take-up. However, the real on-going challenge is to break down traditional barriers so that SMEs and technology providers can understand each other.