Domain 2 – The Digital SME

June 26, 2003

 

Domain 2 – The Digital SME
Domain Specification
Domain Background
Definitions
Domain Focus
Domain Users
User Objectives, Outputs and Critical Success Factors
SME Success Stories
Public funded programmes and initiatives for supporting SMEs go digital
eEurope Relevance

See Digital SME Good Practice examples in Beep Knowledge Base

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 Domain Specification

Domain Background

SMEs are by far the most relevant actor in European economy, thanks to their high contribution to the employment and value added generation. Even in the last 10 years, characterised by two significant slow-down of the European economy, SMEs have increased their employment, thus compensating for the reduction in the labour-force undertaken by large enterprises.

The ‘digital economy’ is now an important challenge for SMEs.  The introduction of ICTs can be an opportunity to develop new management methodologies and for accessing new markets.  SMEs face more problems than larger companies in introducing and effectively using these new technologies.  Their traditional constraints are still conditioning their development: difficulties in accessing the financial markets, an R&D activity that generally is scarcely formalised and that scarcely benefit from co-operation with research centres or universities, difficulties in introducing formalised management tools, difficulties in accessing specialised staff and competencies, etc.

Definitions

The definition of SMEs is based on the EU quantitative parameters: employment, assets and turnover (i.e. any company with less than 250 employees). The BEEP analysis will consider both single business units and networks of SMEs.

A BEEP working definition of the digital SME includes three aspects:

In this domain, the digital economy will be defined as follows: all digital and networking technologies or applications for information and communications.

Domain Focus

In this domain the focus will only be on SMEs evolution and on the ‘external’ factors, related to ‘digital economy’ that directly affects SMEs development. This focus will result in addressing:

The possible cases to be addressed by the project can be divided into two main categories:

  1. Success and failure cases of SMEs that already apply digital solutions to their business.

    The Project will focus upon the cases representing the optimal performance of the 'digital SME' in one, more or all of the following:

SMEs not yet ‘digital’ are the target of public-funded initiatives. The collection and evaluation of initiatives aiming to help SMEs go digital will focus on programmes and projects:

Domain Users

Two possible typologies of users are likely to be interested in the cases analysed in the digital SME domain:

  1. Companies and representatives of the private sector, looking for business success models. These may also include investors in digital SMEs. These could include:
  1. Representative of the public sector or of actors involved in the definition of information for better targeting or improving programmes and policy initiatives for digital SMEs. These could include:

User Objectives, Outputs and Critical Success Factors

Due to the definition of two possible sub-domains, two different sets of indicators will be proposed.

The first set of indicators relates to objectives and outputs defined and pursued at the company level. Therefore, the level of ‘success’ refers to business indicators (such as turnover, rate of growth and profit, value-added, employment added, export, unique web-site visitors), and to the increase of employment (that is an ‘indirect’ effect of company improvement).

The second set of indicators refers to the aims of the public planning and intervention.

In both cases, some outputs and CSFs can overlap more than one objective.

Finally, for evaluating the SME success stories, the following has ‘evaluation matrix’ has been created in which some SMEs basic characteristics would be classified, for example in the following ways:

SME Success Stories

Objectives

Outputs

Possible CSF

  1. Increase in the rate of profit, turnover export, employment
  • Improved quality products and services that are competitive on the global market

 

  • Market knowledge
  • Awareness of ICTs benefits and opportunities
  • Improved access to qualitative sources of information within the ICT/IST knowledge society (providers, service centres, research centres)
  • Diffusion and application of knowledge management systems
  • Human resources
  • Existence of a strategic approach to the ‘digital economy’
  • Knowledge and application of standards
  • Diffusion of ICT equipment, software and contents within supply chains/SMEs networks
  • Integration in a innovative industrial cluster
  • Access to financial resources

Public funded programmes and initiatives for supporting SMEs go digital

Objectives

Outputs

CSFs

  1. Increase the number and success of enterprises
  • Increase of the number of companies
  • Estimated - direct - employment creation
  • Diversification of the local economy into knowledge related activities
  • Improvement in affordability of services
  • Increase of regional income
  • Existence of an integrated strategic approach
  • Integrated projects aimed at developing the IS
  • Clear hierarchy of objectives
  • Level of co-financing from private sectors
  • Clear focus on target beneficiaries
  • Level of participation of the potential/actual local users
  • Level of ex-ante assessment of the users demand and needs
  1. Upgrade regional competitiveness, trading and globalisation
  • Market accessibility for firms
  • Increase of exports
  • Increase of the ratio of high value-added products in the export
  • Increase in the start-up of new companies
  • Increase of the level of innovation within companies
  • Diversification of the local economy into knowledge related activities (in terms of firms and of employment)
  • Improvement in affordability of services
  • Strong supply and delivery chains
  • Diffusion of ICT equipment, software and contents within supply chains and SMEs
  • Market knowledge
  • Existence of an integrated strategic approach
  • Integrated projects aimed at developing the IS
  • Clear hierarchy of objectives
  • Level of co-financing from private sectors
  • Clear focus on target beneficiaries
  • Level of participation of the potential/actual local users
  • Level of ex-ante assessment of the users demand and needs
  1. Maximise the impact of digital economy within the companies
  • Telecommunications traffic growth
  • Ratio of voice to data telecom traffic
  • Increase of the service sector (related to ICTs)
  • Improvement in affordability of services
  • Facilitate and increase the access to ICTs networks
  • Improve human resources within the enterprises
  • Promote the diffusion of the new management tools and methodologies
  • Affordability of services
  • Diffusion of ICT equipment, software and contents within SMEs
  • Knowledge management systems
  • Existence of an integrated strategic approach
  • Integrated projects aimed at developing the IS
  • Clear hierarchy of objectives
  • Level of co-financing from private sectors
  • Level of participation of the potential/actual local users
  • Level of ex-ante assessment of the users demand and needs

eEurope Relevance

Key objective

Action Lines

Actions

Beep domain coverage

  1. A cheaper, faster and secure internet
  • Easy and faster access to a baseline resource of ICT solution providers
  • Secure networks and smart cards
  • Improved access to qualitative sources of information within the ICT/IST knowledge society (providers and users)
  • Partial coverage by Digital SMEs domain (public intervention sub-domain)
  • Indirect coverage for action line N° 2
  1. Investing in people and skills
  • Increase in the aquisition of ICT skills in institutions and the workplace
  • Participation for all in the knowledge-based economy
  • Provision of new learning skills in the use of ICT
  • Development of IT infrastructure that can facilitate these actions
  • Direct coverage by Digital SMEs domain
  1. Stimulate the use of Internet
  • Availability of ‘user friendly’ interactive system
  • Digital content for global networks
  • All actions
  • Direct coverage by Digital SMEs domain (public intervention sub-domain)