ICT,E-BUSINESSANDSMEsORGANISATIONFORECONOMICCO-OPERATIONANDDEVELOPMENT2FOREWORDThisreportwasundertakenbytheWorkingPartyontheInformationEconomy(WPIE),andcarriedoutinco-operationwiththeWorkingPartyonSMEsandEntrepreneurship.ItwaspreparedforthesecondOECDConferenceofMinistersResponsibleforSMEsheldinIstanbul3-5June2004andhostedbytheTurkishMinistryforIndustryandTradeThereportsetsoutpolicymessagesandrecommendationsfromtheworkundertakenonthistopic.ThesemessagesandrecommendationsprovidematerialfromwhichgovernmentsmaydrawinpromotinginnovativeSMEsintheglobaleconomy.GrahamVickeryandKenSakai,InhoLeeandHagbongSimoftheOECD’sDirectorateforScience,TechnologyandPolicypreparedthereport,withacontributionbyMurielFaverie,FORUM,UniversitéParisX,Nanterre,France.PreparationofthereportreceivedfinancialassistancefromtheFrenchGovernmentandfromtheUnitedStatesDepartmentofCommerce[e-BusinessFacilitationInitiativeattheOECD].ItwasinitiallyissuedunderthecodeDSTI/IND/PME(2002)7/FINAL.ThisreportisissuedontheresponsibilityoftheSecretary-GeneraloftheOECD.ViewsexpressedarethoseoftheauthorsanddonotnecessarilyreflectthoseoftheOrganisationoritsmembergovernments.CopyrightOECD,2004.Applicationsforpermissiontoreproduceortranslateallorpartofthismaterialshouldbemadeto:HeadofPublicationsService,OECD,2rueAndréPascal,75775ParisCedex16,France.3TABLEOFCONTENTSEXECUTIVESUMMARY............................................................................................................................4Businessenvironment.................................................................................................................................4Networkinfrastructure................................................................................................................................4Trustinfrastructure......................................................................................................................................5Digitalproductsandinformationservices...................................................................................................5Skillupgrading............................................................................................................................................5Intangibleinvestmentsandassets...............................................................................................................5Information..................................................................................................................................................5Governmenton-line.....................................................................................................................................6Competition.................................................................................................................................................6Intellectualproperty....................................................................................................................................7INTRODUCTION..........................................................................................................................................8I.BENEFITSANDUSEBYSMALLBUSINESSES...........................................................................9BenefitsofICTandInternetuse.................................................................................................................9ICTadoptionandfirmperformance..........................................................................................................11UseofICTandInternetamongSMEs......................................................................................................11AdoptionofInternete-commercebySMEs..............................................................................................13Towardse-businessintegration.................................................................................................................18II.BARRIERSTOUSE.........................................................................................................................19Unsuitabilityforbusiness..........................................................................................................................19Enablingfactors:internalICTandmanagerialknowledge.......................................................................20Costofdevelopingandmaintaininge-businesssystems..........................................................................21Networkinfrastructureissues:accessandinteroperability.......................................................................22Buildingsecurityandtrust........................................................................................................................26Legaluncertainties....................................................................................................................................28E-businessadoptionchallenges:lessonsfromEBIP.................................................................................