eBusiness Adoption in SMEs: Barriers and Support Framework in the European Union, Study notes of Business Administration

Download eBusiness Adoption in SMEs: Barriers and Support Framework in the European Union and more Study notes Business Administration in PDF only on Docsity! - 35 - THE ECONOMIC CONDITIONS OF ENTERPRISE FUNCTIONING eBusiness Policy Support Framework SMEs are slower than large firms to adopt new ICT unless effective use of ICT and performing operations electronically (eBusiness) across all sectors of the economy can act as a driver to increase competitiveness. Potential SME benefits and firm and sector-specific strategies drive the adoption and use of ICT. Furthermore, sectors are increasingly global and dominated by large firms and the structure of their values chains and operations shape opportunities for SMEs. Principal reasons for non-adoption are lack of applicability and little incentive to change business models when returns are unclear. SMEs also face generic barriers to adoption including trust and transaction security and IPR concerns, and challenges in areas of management skills, technological capabilities, productivity and competitiveness. The issues for governments throughout the European Union (EU) are to foster appropriate business environments for eBusiness and ICT uptake, and target programs to overcome market failures to the extent that they are needed in particular areas (e.g. skill formation, specialized information). Governments have a range of SME eBusiness and internet use programs. However, commercial considerations and potential returns are the principal drivers of SME adoption and profitable use. The key drivers for enabling eBusiness development are commitment and support of industry associations, in particular in sectoral initiatives, synergies by having access to resources from other initiatives or organizations, competitive pressure and ease of participation. The key barriers slowing ICT adoption are competition among companies in the target group, Lack of awareness, often combined with mistrust regarding ICT and ICT service providers, costs, lack of internal ICT and management knowledge, Network infrastructure issues: access and interoperability, Legal uncertainties. The European Commission has identified 3 factors that make it difficult for SMEs, in particular, to engage more fully with ICT and develop sustainable business practices: 1) the relatively high costs associated with investments in ICT; 2) the lack of technical and managerial skills and; 3) reluctance on the part of SMEs to network with other enterprises. The proposed framework summarizes the main policy directions derived from the analysis and the key areas of eBusiness support - Business environment, Skills upgrading, Network infrastructure, Trust infrastructure, Digital products and information services, Intangible investments and assets, Information, Government on-line. Finally the paper maps proposed key eBusiness support areas around key dimensions of eBusiness (functional, sectoral, and regional/spatial) on three distinct levels (micro: the level of the firm, meso: the level of the region, and macro: national/international). Keywords: eBusiness, ICT impact, SMEs, support policy framework. Introduction The evolution of eBusiness or the uptake of eBusiness practices has become popular to depict as a process involving transitions toward increasing use of ICT coupled to organizational change and sophistication which can impact business performance. This process should not be interpreted as a generic or deterministic process of adaptation that can be replicated across institutional contexts. Instead, there are many ‘environmental’ elements, ranging from policy frameworks, supporting public administrations, competitiveness/collaboration frameworks, levels and quality of education, entrepreneurial culture and ICT infrastructure, among others), that condition the evolution of eBusiness (Vitkauskaite, 2009). In 1997, IBM coined the term ‘eBusiness’ to refer to the increased utilization of information and communication technology (ICT) in business processes. In 2001, the European Union launched its ambitious eEurope program, aimed at pushing Europe at the global forefront in eBusiness uptake, among other things. Ever since, eBusiness policy has been at central focus on regional, national, and European level. eBusiness support policy is usually targeted to encourage and assist small and medium size enterprises (SMEs), to use Information and Communication Technologies in a way that will maximize their competitive advantage. Effective use of ICT across all sectors of the economy can act as a driver to increase competitiveness. ICT connectivity is very widespread in businesses of all sizes. As is the case with all technologies, SMEs are slower than large firms to adopt new ICT. Potential SME benefits and firm and sector-specific strategies drive the adoption and use of ICT. Furthermore, sectors are increasingly global and dominated by large firms and the structure of their values chains and operations shape opportunities for SMEs. Principal reasons for non-adoption are lack of applicability and little incentive to change business models when returns are unclear. SMEs also face generic barriers to adoption including trust and transaction security and IPR concerns, and challenges in areas of management skills, technological capabilities, productivity and Docsity.com - 36 - competitiveness (Gatautis, 2008a). The issues for governments throughout the European Union (EU) are to foster appropriate business environments for eBusiness and ICT uptake, and target programs to overcome market failures to the extent that they are needed in particular areas (e.g. skill formation, specialized information). Governments have a range of SME eBusiness and internet use programs. However, commercial considerations and potential returns are the principal drivers of SME adoption and profitable use (Gatautis, 2008b). The object of research – eBusiness support policy. The main objective of this paper is to elaborate eBusiness support areas and empirically validate proposed eBusiness policy support framework. The methods of research are systemic, logic and comparative analysis. eBusiness impact The effects and impact of eBusiness can be mapped along three dimensions: business functions, the structure and composition of sectors, and regional or spatial aspects of economic and business processes. ICT impact on business functions: Economic research has confirmed the impact of ICT on firms’ productivity. A common observation is that this effect has been larger among US enterprises over the past 10-15 years than in EU enterprises. This has been a major concern of EU policy for years. In 2006, eBusiness W@tch asked companies across the EU to assess the impact of ICT on their own business. The “efficiency of business processes” and “work organization” are the areas where most companies have experienced positive effects (see Exhibit 2). This confirms, once again, that ICT is a key instrument to optimize linkages in the internal value chain and across enterprises. As a result, 55% of the firms interviewed report positive productivity effects. Customer service is another area where many companies (52%) observe positive effects from ICT; in telecommunications, the figure rises by as much as 75%. Interestingly, even in manufacturing sectors, more companies report positive ICT effects on customer service than on reducing procurement costs. Only a minority of a report (or admit) negative effects in any of the business areas surveyed. The remainder have not observed any effect from ICT, or are undecided. Figure 1: Perceived ICT impact on the business Source: eBusiness W@tch (2006). Companies expect that ICT will have a "high impact" in the future particularly for management and accounting, as well as for marketing and customer service (see exhibit). The anticipated impact depends, of course, on the industry and the size of a company. For example, ICT effects on production processes will be more significant for manufacturing companies. In fact, firms representing about 60% of the pulp and paper industry, ICT manufacturing and shipbuilding expect a high or medium impact on production, compared to about 40% in construction or tourism. The same applies to effects on logistics. Figure 2: Where ICT will have an impact in the future Source: eBusiness W@tch (2006). Firms expect that ICT will continue to have a significant impact on how they do their business in the future. In particular, they believe that ICT will become even more important as a tool to support planning, decision making and controlling. Management and controlling functions in an enterprise depend critically on ICT systems. They provide information faster, more flexibly and more concisely than would otherwise be possible. In larger enterprises, many of the regular management reports (e.g. from controlling) are automatically generated from ICT based information systems. It is interesting that marketing and customer support have overtaken production and logistics as primary application areas for ICT in the scenario of large firms. This applies not only to service sectors such as tourism and telecommunications (obvious for these industries), but increasingly also to manufacturing sectors. A more detailed picture of prevailing eBusiness practices emerges when we look at the specific functions of business and the uses of ICT. Connectivity and basic ICT uptake have visibly progressed since 2005: By 2007, 77% of all businesses had a broadband connection (97% of large enterprises and 77% of SMEs) and 77% were using the Internet for dealing with banks. In addition, enterprises started making significant use of e-government services, stimulated by progress in the greater availability and sophistication of online public services (Eurostat, Survey on ICT use in EU enterprises). As it has been highlighted earlier, the uptake of ICT by businesses yields important economic benefits as long as it is accompanied by investment in business reorganization. However, evidence of the potential impact of ICT on the Docsity.com - 39 - that market pressure has been an important driver of the active participation of SMEs in the activities (Davidaviciene, 2008). However, even if there is market pressure, the ease of participation is another important facilitator mentioned by several initiatives, in particular when working with SMEs. The administrative requirements for companies to submit a project proposal must be reasonably low, as otherwise many companies shy away right from the start (Gatautis, 2007). Barriers A commonly found impediment for sectoral eBusiness initiatives is the issue of competition among companies in the target group. The sectoral focus and the involvement of companies that are part of the same sector or community inevitably leads to competition issues with possible conflicts of interest (Gatautis, 2008). Lack of awareness, often combined with mistrust regarding ICT and ICT service providers (and their potential for improving SMEs' performance) is quite a common problem, not only in this kind of initiative. This may represent a significant barrier in the initial phase. Smaller companies can be hardly convinced about the efficacy of introducing new business practices and tools unless these are very simple and benefits can be proved. Another issue frequently reported as a challenge are costs. Different approaches were adopted by the policy initiatives regarding the financial contributions requested from the SMEs for the service delivery. A few initiatives did not foresee any financial support for SME that were thus expected to sustain the full cost (Gatautis, Neverauskas, 2005). It is quite difficult to assess to what extent the financial support effectively contributed in convincing the SMEs to participate in the initiatives or, conversely, if the lack of any direct contribution should be considered as an indication of commitment from the participants. On the one hand, budgetary and financial constraints are regularly quoted as relevant barriers for many initiatives. On the other hand, the “grant trap”, i.e. the participants' interest in money rather than in the initiative itself, tends to compromise initiatives. Internal ICT and management knowledge: SMEs generally lack the human technological resources needed for ICT and e-commerce, because they focus on day-to-day operations and lack the time to understand the benefits of new technologies. Even when they are aware of the potential benefits of adopting eBusiness, they require know-how or qualified personnel. SMEs may also lack managerial understanding and skills for eBusiness. Successful integration of eBusiness requires many firms to restructure their business processes, to change organisational structures and to redefine their core competence and positions in the value chains. So, eBusiness tools cannot be successfully introduced and implemented without the visionary power and strategic decisions about how to apply ICT technologies for their business processes (Gatautis, Gudauskas, 2006). Network infrastructure issues: access and interoperability: The availability of a wide range of Internet connections and other communication services, preferably at competitive prices, is important in that it allows small businesses to choose different and appropriate services according to their specific needs and (initial) expectations from on-line activities. Fixed telecommunication networks are likely to continue to serve as the primary means of Internet access for many SMEs because of their relatively lower cost. However, as use of eBusiness increases, barriers related to network infrastructure seem to be higher for SMEs than large firms. Challenges include how to ensure interoperability with a range of different e- commerce systems and how to improve ICT management and organizational skills (Snieska, Simkunaite, 2009). Legal uncertainties: Most Internet eBusiness transactions are domestic rather than cross-border. Although there may be other reasons, such as the use of a common currency, differences in legal and regulatory environments are one of the most important. Legal uncertainties and conflicting regulatory environments for cross-border transactions, especially B2C, may affect SMEs particularly strongly. There is neither a harmonized legal framework with rules pertaining to the determination of jurisdiction and applicable law nor mechanisms that ensure the cross-border enforcement of legal rulings. Small businesses can risk being sued in multiple jurisdictions under a number of inconsistent laws. More generally, the lack of a satisfactory redress mechanism in the event of a dispute may strongly discourage both B2B and B2C on- line transactions. Unlike large firms, which can afford to maintain a legal department, the cost of keeping abreast of developments in the target market’s legislation and regulations and the cost of tackling the complex legal issues involved in cross-border transactions may be too high for many small businesses. Barriers to the adoption of eBusiness are also changing over time and may vary along the adoption ladder. For some SMEs sophisticated in the use of e-commerce, the barriers mentioned above may be unimportant. But they may face other challenges as they change their management and organizational structures and restructure business processes to make better use of the internet and the potential of eBusiness. Leading trends in eBusiness support practises at EU level The Lisbon Summit in March 2000 set the goal of making Europe the most dynamic knowledge based economy in the world by 2010. With European productivity growth rates fluctuating between 0.5% and 1%, the low uptake of ICTs by enterprises outside of the ICT sector in Europe is a contributing factor to the failure to catch up on the US. The relatively low levels of ICT usage (as distinct from ICT investments or ICT production) by European companies has also been identified by the Economist Intelligence Unit as the main differentiating factor in the US advantage over Europe in productivity growth. It also notes Europe’s weaknesses are most acute among SMEs and that success in encouraging innovation and effective ICT usage by SMEs across all sectors of the economy will have a large impact on the EU economy’s ability to remain competitive (Melnikas, 2008). The European Commission has identified 3 factors that make it difficult for SMEs, in particular, to engage more Docsity.com - 40 - fully with ICT and develop sustainable business practices (European Commision, 2006a): 1) the relatively high costs associated with investments in ICT; 2) the lack of technical and managerial skills and; 3) reluctance on the part of SMEs to network with other enterprises. Action by policy makers to entrench ICT-related managerial skills in the workforce has also been identified as one of the key imperatives for European policy makers and business leaders in creating a business environment where innovation can thrive and where the benefits of ICT are readily available at all levels of the economy (European Commision, 2006a). The Commission’s action lines are shaped by continuous technological advances with unpredictable economic and business consequences. New software and service architectures are emerging that allow not only the integration of business processes within companies but also the networking of companies and totally new collaborative environments. Key technologies enabling these advances are computer Grids and service-oriented architectures. Both are areas where the EU has demonstrated excellence and leadership in the related research. ICT can have a disruptive impact on companies and markets, thus driving innovation. Disruptive change is already evident in manufacturing (e.g. through personalization/ customisation, i.e. inserting a service into a product), in retailing (through eBusiness, diffusion of RFID / electronic labeling, automation of points of sale and supply chains, and mobile commerce), and more recently in service industries (through radical improvements in the automatic creation and personalization of e-services, their support for physical services, and consequent improvements in productivity) (Virvilaite, Saladiene, 2009). Leading trends in the EU suggest that further disruptions to companies and markets caused by advances in ICT in the coming years will most likely be threefold (European Commission, 2007): • The emergence of an “Internet of Things” where everyday objects can make simple communications on-line, enabling for example detailed and timely knowledge of product location and life cycles to be compiled, as well as individual and dynamic prices for goods. • The creation of “innovation ecosystems”; for example taking the form of SME networks which cooperate globally; dynamically exchanging resources, applications, services and knowledge. Based on computerized representations of the world’s economies and related business opportunities, such ecosystems will support radically new forms of business activity that respond very rapidly to market changes. • New forms of flexible and mobile teamwork; dynamic and agile communities of people working in new collaborative environments supported by the Internet. To meet these challenges, enterprises have to reach key targets: increased flexibility, economies of scale and scope, cost reduction, shorter timelines, access to technologies, improved quality, and improved operational efficiency. A major effort will be required to achieve enterprise interoperability especially where the market fails to find solution. Technological developments can translate into greater efficiency gains if investment in ICT is accompanied by reorganization of business processes. However, skills shortages are an important constraint. Between 2000 and 2004, ICT skills in the labor force did not significantly increase: the share of ICT specialists remaining constant around 3 % and people with more general IT-skills remaining at around 18 %. Yet competition, technological and organizational changes are also changing the occupational profile of the ICT sector itself, and the mix of skills it now requires. For example, digitization and related changes in electronic communications have reduced the need for traditional skills in maintenance and repair, and at the same time boosted demand for computer and electronic engineering professionals (EC, 2006). The growth of ICT has always been marked by fluctuations of activity and there has been an element of boom and bust. It is estimated that there are 4.2 million ICT practitioners within the EU and that approximately 180 million people are using ICT at work. A study on the supply and demand of e-skills over the period 1998-2004 reported an increase in the estimated number of employed IT practitioners during this period of about 48 %. After a peak in 2001 a low point was reached in 2003. There is some evidence of a cycle, and the European e-Skills Forum warned that significant e-skills gaps will again appear and called for the preparation of a long-term e-skills agenda. A 2005 industry report predicted that there would be a shortage in 2008, across Europe, of up to half a million people with advanced networking technology skills. ICT is one of the most global and pervasive technologies. ICT products and services and the corresponding jobs are broadly the same everywhere, and the ICT industry is operating on a world-wide basis. The ICT Task Force complains that Europe is still a patchwork of countries functioning under different regulatory systems. In addition, the adoption of best practice is too slow and an EU-wide approach is still lacking. The European e-Skills Forum has identified solutions bringing added-value at EU level, but these have so far not been implemented. For example, developing and retaining skills required for business success is a necessity to ensure that enterprises have employees with the right skills in the right jobs at the right time. For this purpose, many of them are developing ICT competence catalogues, processes, tools and strategies. Several countries have already set up ICT competence frameworks. Many enterprises operating in these countries have developed their competence inventories on them. Efforts to establish and update these proprietary inventories and systems are costly and could be shared for the benefice of enterprises and especially SMEs. Using a European e- competence framework would represent a useful solution in line with the ambitions of the single market. The need to maintain and continuously upgrade e- skills stems from technological change and increasingly from internet-enabled global sourcing. New sources of ICT talent in emerging economies, especially India and China, imply the need for the adaptation of the EU workforce. Software programmers face commoditization of their skills, and some low- and middle-income workers face increasing risks to their jobs. The OECD estimates that around 20% of total employment could potentially be Docsity.com - 41 - affected by offshoring. At the lower end of the qualification spectrum, de-skilling of workers often takes place as their know-how becomes codified making it relatively easy to outsource. Higher-level e-skills cannot be so easily encoded, which puts a premium on these skills in a EU workforce context. This issue is debated in the media as the emergence of a significant restructuring of the labor market. Several sources report a deterioration of the image of the ICT sector and ICT work, which is reflected in the decline in the number of students starting ICT courses. Adding to the concerns related to the demographic decline, young people seem less and less interested in studying mathematics, sciences and technology, and the gender issue still remains. There is a need to communicate better with the public, especially young people, parents, teachers and women, and to adopt measures to facilitate the adaptation of the workforce. The continuous development of ICT and changes in the corresponding e-skills requirements provides a complex, moving target for policy-makers. National educational and professional training systems are facing a huge challenge to deliver the skills needed by our economy and society. Despite their efforts, they still find it difficult to cope with the situation, and lifelong learning is still far from being a reality. New forms of partnerships and flexible approaches (such as those based on e-learning) need to be much more actively promoted (Kumpikaite, 2008). Industry complains about growing gaps and mismatches between the supply and the demand of specific e-skills. The European e-Skills Forum and the ICT Task Force has warned against the rise of “parallel universes” between industry-based and government-supported education in ICT. The experience of embedding ICT industry e-skills certifications within the national qualification framework, such as pioneered in the United Kingdom and some new Member States, provides interesting case-studies that should be reviewed and shared between Member States. The Commission has stressed that qualifications should increasingly be defined in terms of expected learning outcomes to encourage education and training providers to focus on the competence needs of individuals and employers, and not on the duration, location or organization of the institutions. The traditional notion of literacy needs to embrace the complete set of e-skills and media competences required in a knowledge-based economy and society. Eurostat figures indicate that 37 % of the EU population has no computer skills whatsoever and that more than 60 % of people not educated beyond lower secondary level have no basic e- skills. A lack of e-skills will prevent these people from using e-commerce and e-government applications and participating fully in the information society. Furthermore, the lack of e-skills exacerbates social and educational disadvantages, inhibiting lifelong learning and up-skilling. The market on its own cannot close the digital divide. Innovative public measures and multi-stakeholder partnerships are at the heart of both the Recommendation of the European Parliament and of the Council on key competences for lifelong learning and also of the Riga Declaration which was adopted at the Ministerial Conference on e- Inclusion in June 2006. Innovation requires a regulatory environment that is predictable, accommodates and even encourages new developments in goods and services, protects intellectual property and provides open, interoperable standards. This needs the enhancement of the regulatory environment and ensuring of an effective IPR framework. Progress has already been made on Better Regulation at both European and national level. Reducing the administrative cost of regulation of enterprises, will be a significant contribution to innovative activities. At the same time, the regulatory environment should also reinforce consumer confidence by ensuring that protection measures that exist are applied effectively to innovative products in the same way as to existing products. The assessment of the impact of regulation on innovation needs to be enhanced. Regulation should be predictable, flexible, simple and effective. Regulations that focus on the policy goal, rather than on the technical solution through which it is achieved, leave space for innovative solutions. The Commission will continue to encourage this type of legislation, as it has done through its “New approach” to product regulation. Furthermore, it will encourage the timely adoption of ambitious standards that focus on performance rather than technology. A clear priority for the EU is to close the important gaps in the Single Market, particularly in services, and this includes: streamlining of procedures, reduction of administrative burdens, and promoting transborder market access in particular for public procurement. Applications would include: interoperable provision of pan-European eGovernment services and the crossborder recognition of eSignatures. The legal framework governing the information society and the sometimes fragmented implementation in the Member States can make it difficult to exploit the potential of ICTs on a European scale, risking increasing barriers to cross-border online trade. It is necessary to address overlapping requirements, gaps or inconsistencies in implementation and to keep pace with technological change to ensure the efficient functioning of the "e- Internal Market". For example, eInvoicing will be addressed during 2008 and 2009 by an Expert Group that will identify regulatory shortcomings and eInvoicing business requirements, and will propose to the Commission by end-2009 a framework to promote full recognition of e-invoices in cross-border transactions. The Commission will act to improve the institutional framework of European standardisation. In particular, it will seek to speed up the adoption of open, interoperable standards and to better integrate SMEs and consumers into the standards-setting process. In fast-moving technology fields, such as ICT, private company specifications can easily become de-facto industry standards. If this happens, it is important that they should not become a barrier to market access. Further, as demonstrated in the area of mobile communications, the rapid setting of open, interoperable standards is key to global success for European companies. The Commission will continue to work with the European Standards Organisations and societal stakeholders to achieve this result. It will ensure that European legislation facilitates the use of such standards. Promoting cooperation between stakeholders: Being part of a cluster is an important competitive strength for Docsity.com - 44 - Table 1 eBusiness support objectives at different levels eBusiness support objectives Micro level: enterprise level Meso level: networks and regions level Macro level: national level Business environment Competitiveness/collaboration framework Administration reform Competitiveness/collaboration framework Regulatory framework Administration reform Tax reporting procedures E-skills Measuring and mapping existing and emerging eBusiness management skills Measuring and mapping existing and emerging eBusiness management skills Measuring and mapping existing and emerging eBusiness skills Measuring and mapping the impact of ICT on business along functional, sectoral and regional dimensions Designing eBusiness skills development programs Intensive training courses Best practice dissemination portal EBusiness handbooks Specific targeted training programs Measuring and mapping existing and emerging eBusiness management skills Measuring and mapping existing and emerging eBusiness skills Measuring and mapping the impact of ICT on business along functional, sectoral and regional dimensions Designing eBusiness skills development programs Intensive training courses Best practice dissemination portal National eBusiness skills suppport program Network infrastructure Network services and applications Open source solutions: Software development Training Collaboration platforms Government investment in eBusiness development: Digital Business Ecosystems Networking infrastructure Clustering programs Open source solutions: Software development Training Collaboration platforms Government investment in eBusiness development: Digital Business Ecosystems Networking infrastructure Clustering programs Open source solutions: Software development Training Collaboration platforms Trust infrastructure IPRs Security Privacy Collaboration and knowledge sharing across SMEs Trust across SMEs and SMEs and public policy makers Collaboration and knowledge sharing across SMEs IPRs Security Privacy Digital services and products Provision of digital content relevant to SMEs by business associations Provision of digital content relevant to SMEs by government Intangible investments and assets Assessment of intangible assets on a regional basis Methods for measuring intangible assets on a regional basis Assessment of the role of business associations and government Governmental services The quality of government digital information available to SMEs The quality of government digital information available to SMEs such as e-procurement The quality of government digital information available to SMEs The quality of government digital information available to SMEs such as e-procurement Docsity.com - 45 - Conclusions Most of SMEs still lack behind eBusiness adoption. Principal reasons for non-adoption are lack of applicability and little incentive to change business models when returns are unclear. SMEs also face generic barriers to adoption including trust and transaction security and IPR concerns, and challenges in areas of management skills, technological capabilities, productivity and competitiveness. The issues for governments throughout the European Union (EU) are to foster appropriate business environments for eBusiness and ICT uptake, and target programs to overcome market failures to the extent that they are needed in particular areas (e.g. skill formation, specialized information). Governments have a range of SME eBusiness and internet use programs. However, commercial considerations and potential returns are the principal drivers of SME adoption and profitable use. The proposed eBusiness support framework identifies key areas of policy support: • Business environment: A healthy business environment is fundamental for firms to thrive and benefit from ICT use. This includes a transparent, open and competitive business framework, clear independent rule of law for all firms, easy set up and dissolution of businesses, transparent, simple and accessible corporate regulation, and equal and stable legal treatment for national and cross- border transactions. • Skills upgrading: Lack of ICT skills and business skills are widespread impediments to effective uptake once adoption decisions are made. Governments have major roles in providing basic ICT skills in compulsory schooling, and an important role in conjunction with education institutions, business, and individuals in providing the framework to encourage ICT skill formation at higher levels, in vocational training and in ongoing lifelong learning. • Network infrastructure: Encourage rollout and use of quality infrastructure at affordable prices. Broadband connectivity is a key component in ICT development, adoption and use. It accelerates the contribution of ICT to economic growth, facilitates innovation, and promotes efficiency, network effects and positive externalities. The development of broadband markets, efficient and innovative supply arrangements, and effective use of broadband services require policies that: promote effective competition and continue to stress liberalization in infrastructure, network services and applications across different technological platforms; encourage investment in new technological infrastructure, content and applications; and technology neutrality among competing and developing technologies to encourage interoperability, innovation and expand choice. Public financial assistance to expand coverage for under-served groups and remote areas could complement private investment where appropriate, provided it does not pre- empt private sector initiative or inhibit competition. • Trust infrastructure: Get the regulatory infrastructure right for trust, security, privacy and consumer protection. Essential is culture of security to enhance trust in the use of ICT, effective enforcement of privacy and consumer protection, and combating cyber- crime and spam. Strengthened cross-border co-operation between all stakeholders is necessary to reach these goals. Low-cost on-line dispute resolution mechanisms among firms and between firms and consumers are of particular relevance for small firms. • Digital products and information services: These are an increasingly significant part of economic activity and they offer important opportunities to small firms. Government and the private sector have key roles in facilitating content availability across all platforms and encouraging local development of new content, including content from public sources. • Intangible investments and assets: Firms increasingly rely on intangible investments and assets (skills, organization, software, networks) for competitiveness and growth. However, common frameworks to identify, measure and report intangible investments and assets still need to be developed and be widely accepted. There is a significant role for governments in conjunction with business associations and accounting bodies to encourage business to develop and use systems which recognize and report intangibles in ways that can be reliably used by investors, valued by capital markets and guide better management practices. • Information: SMEs may lack objective information regarding the benefits and costs of adoption of ICT. The private sector (e.g. business associations) and government have a role, and can provide information about service available and when necessary improve coordination of government information on the benefits of adoption and use of ICT, for example case studies and good-practice demonstrations to tackle market failures in information supply. • Government on-line: On-line provision of government information and services can increase the efficiency and coverage of public service delivery to small firms, and act as a model user and standard-setter for ICT adoption by small firms. As model users of broadband, government can demonstrate the potential of broadband- based services and content, provide demonstration and “pull-through” mechanism for small firms. Government demand aggregation to provide services can help spread new services more widely. Education, general government information and services, and provision of government services to businesses and citizens can all potentially benefit from the use of new high-speed infrastructure and services, and should be given priority in government strategies. The proposed eBusiness support key areas are mapped and addressed around key dimensions of eBusiness (functional, sectoral, and regional/spatial) on three distinct levels (micro: the level of the firm, meso: the level of the region, and macro: national/international). Acknowledgement The current research was funded by Information Society Development Committee under the Government of Republic of Lithuania. Docsity.com