November 22, 2004 - Washington, DC On November 4, 2004 a videoconference "Implementing National e-business strategies for economic growth: Successes, constraints and lessons learned" was held with various representatives from government agencies implementing e-business strategies in Korea, Canada, Chile, and South Africa, and experts from Eslovaquia, Scotland and the World Bank.

The aim of the video seminar was to help those in governments, industry and international institutions to identify how to accelerate e-business adoption. It had three segments - a keynote presentation by e-business government leaders in Korea, a panel discussion of like participants from five other countries, and an open discussion on- and offline. The key items addressed were (a) the role of eBusiness in national competitive strategies, and (b) the lessons learned from the countries that have implemented these strategies. Evidence shows that ebusiness is not a matter of computers and wires, but a significant contributor to productivity and economic growth, the Millennium Development Goals to reduce poverty, and a partner of e-government to reduce the cost of doing business.

An important objective as part of the Korean government's goal to transform Korea into a knowledge economy has been development of ebusiness for micro and small businesses (MSB). The main problems MSBs face is the lack of IT expertise, capacity to operate and maintain IT resources and a low standardization level. The Korean government invested heavily through consortia of private IT firms to highly customize applications for MSB needs, deliver them through applications service providers (ASP), establish standards across ebusiness projects, and organize e-business training programs. The Ministry of Information and Communications, together with small business associations and the National Computerization Agency, constitute the core institutional framework for this program. Progress has been furthered with development of government-to-business (G2B) services, including a national comprehensive e-procurement system which allows all businesses in the country to participate in bidding processes. Additionally, it has emphasized ensuring secure online transactions and provided fiscal incentives to encourage firms to adopt ebusiness. Some 35,000 MSB projects have been implemented and provided support primarily for initial consultations, basic business software, enterprise resource planning (ERP), manufacturing process information, and joint applications development.

The government of Canada began work on electronic business and ICT in 1997. Since then, it has evolved, together with changes in the marketplace, specially with respect to MSB practices. The emphasis has been put on creating (a) the right environment for electronic commerce, (b) an attractive fiscal policy for the investment in IT and innovation, (c) the right legal framework for e-business trust, including privacy legislation, and (d) increased Internet access, particularly broadband. To deal with a lack of critical mass of expertise available to MSBs to adapt ebusiness, there are also attempts to work with larger companies with expertise on the area to increase access to IT expertise. Average yearly growth of MSB e-business has been about 60% over the past few years. The key lessons from this experience have been that connectivity is not enough to ensure success and that deliberate effort is needed by government to provide the proper ebusiness environment and help enable firms to build ebusiness into a company's business model.

Even in Chile, the IT leader of Latin America, only around 5% of MSBs have real ebusiness processes. The policy options chosen to incorporate e-business among other technologies range from the regulatory policies to reducing the cost off access to connections, to the creation of a national network for MSBs to receive training on IT and how to incorporate it in their businesses. The Government's G2B program has also cut red tape, put trade procedures online and setup electronic invoicing, among others steps to encourage ebusiness adoption. Like Canada, it has also improved the legal framework for online security and rights protecting consumers.

In Scotland, ebusiness is embedded in the fabric of economic policy, which focuses substantially on increasing national competitiveness. The government's programs focus both on demand-side awareness by providing through Scottish Enterprise workshops, seminars, online fact sheets and case studies on ebusiness to inform the business community about its benefits. It also encourages supply-side promotion of MSB applications development by the IT industry to deliver affordable solutions, as well as provision of broadband access by investing heavily in open access, wireless networks across the country. The impact on revenue per employee of adopting ebusiness practices among Scottish companies is estimated at a 40% increase. Success has come primarily through an emphasis on political will, a market focus (rather than solely on technology), an integrated strategy with stakeholders, balance in IT services demand and supply, and on delivery.

In Slovakia, the main favorable element for ebusiness has been its entry into the European Union, which implies the adoption of legislation and the access to seed money for projects related to the information society. Otherwise, so far, many of the preconditions for the effective implementation of the legislation do not yet exist. Additionally, the general socioeconomic and education conditions in the country are not favorable as yet towards the implementation of eBusiness among MSBs.

In South Africa, different ministries of the South African Government have been investing in various ebusiness and egovernment initiatives. However, the efforts have not been coordinated and many times they have been reinventing the wheel and regulatory policies are not yet adequate for ebusiness development. Yet, impending changes in the regulation of broadband are expected to radically and positively change the landscape in the IT sector. Some specific notable achievements so far have been the creation of telecenters, an ICT charter, the Digital Commons initiative by which sectors and companies can leverage from a pool of common knowledge, and Impi Linux, an initiative to promote the use of open source. In the future, South Africa needs to move up through the value chain and create capacity to produce and export software and IT products, perhaps by forming South-South collaboration arrangements such as with India and building a supply/demand interrelationship with government support.

In response to a question about whether businesses and individuals living abroad made eBusiness successful, global Korean companies have had a hand in engaging via ebusiness overseas Koreans doing business, for example in the US food industry. Many Canadian citizens living in the United States lead major ebusinesses. It has realized its potential and is taking advantage of those spillovers, specially in the area of attracting capital and advice. In Scotland, the government has created the so-called Global Scots initiative, which holds meetings every year to tap networks and resources among high level Scot executives spread around the world.

In summary, video seminar participants manifested uniformly the importance of ebusiness as a competitive tool and the significant role of government to help enable it. It should support the basic environment, which begins with ensuring online trust and security and setting interoperability standards. Stressing broadband development is critical, given the substantial increase in returns to ebusiness that it yields, as well as critical government-to-business services such as e-procurement. At the firm level, demand enabling is key to success by encouraging B2B relationships, working at subsectoral and regional levels to facilitate development of customized applications solutions, ebusiness training for MSBs and shared-use solutions such as high-value services in telecenter networks.

For more information on e-business events, please contact Jim Hanna at jhanna@worldbank.org. For more information on the e-business initiative, please visit the site http://www.worldbank.org/ebusinesslac