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Korea’s Experience in promoting e-business adoption among micro and small business






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Korea’s Experience in promoting e-business adoption among micro and small business. Yoon, Jeongwon Director National Computerization Agency. Table of Contents. Introduction E-business in Korea ASP based e-business project for small business 30,000 SMB Informatization Project Conclusion.
Korea’s Experience in promoting e-business adoption among micro and small business

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Korea s experience in promoting e business adoption among micro and small businessSlide 1

Korea’s Experience in promoting e-business adoption among micro and small business

Yoon, Jeongwon

Director

National Computerization Agency

Table of contentsSlide 2

Table of Contents

  • Introduction

  • E-business in Korea

  • ASP based e-business project for small business

  • 30,000 SMB Informatization Project

  • Conclusion

Korea s experience in promoting e business adoption among micro and small businessSlide 3

Part I

Introduction

BackgroundSlide 4

Background

Cyber Korea 21

e-Korea Vision 2006

  • Why e-business ?

    • Remove the barriers of time and distance with the Internet

    • Tool to boost the nation’s competitiveness as witnessed in the Korean success case.

  • Renewed focus on Internet growth and Internet Business :

    “Use ICT as a strategic means to overcome economic crisis”

  • New national IT master plan for five years(2002 ~ 2006) :

  • “Emphasize on advancing B2B e-commerce and providing a safe and reliable online business environment”

Background1Slide 5

Background

  • Continual growth in size of e-commerce market in Korea

    • 47.9 billion dollars in 2000 -> 195.6 billion dollars in 2003

Total Commercial Transaction vs. e-Commerce(B2B, B2C)

16.5 %

Unit : billion USD

12.8 %

e-commerce transaction

9.1 %

1,400

4.5 %

196

148

1,200

99

48

1,000

800

1,188

1,155

600

1,090

1,058

Total e-commerce transaction

400

200

0

2000

2001

2002

2003

Source: National Statistical Office of Korea

Background2Slide 6

Background

Relation btw GDP Growth and IT Industry Growth in Korea

40

35

30

25

IT Industry Growth Rate

20

15

10

5

GDP Growth Rate

0

1996

1997

1998

1999

2000

2001

2002

-5

-10

Unit : %, contrast to previous year

Source: Bank of Korea

ObjectivesSlide 7

Objectives

  • Closing the gap in IT use between small businesses and medium & large enterprises

  • Utilizing its highly advanced information infrastructure

Right business environment for small businesses

Promoting new business model

Highly Advanced Information Infrastructure

Korea s experience in promoting e business adoption among micro and small businessSlide 8

Part 2

E-Business in Korea

B2b in koreaSlide 9

B2B in Korea

More than 88% of the total e-commerce market(198.3 billion USD as of 2003)

CALS

B2B Network Project

1998

1999

2001

2002

2003

  • Electronics

  • Automobiles

  • Construction

  • Defense

  • Start with 9 fields;

    steel, shipbuilding, machinery,etc.

  • 11 fields added; watches, agricultural products, livestock, and machinery, etc.

  • 10 fields added; Semiconductor animation, etc.(Total 30 fields)

  • 9 fields added, ; stationary, jewelry, fruit, and flowery. (Total 1,017 companies)

B2b in korea1Slide 10

B2B in Korea

Large Enterprise

Large Enterprise

SME

SME

Large Enterprise

Large Enterprise

Large Enterprise

Large Enterprise

“Optimizing Value Chain”

B2B Network Project

CALS Project

B2B Network Project

  • Government investment : 70% of the total costs (Total $51mil)

  • ISP, Standardization, raising awareness on e-business, pilot implementation

B2c in koreaSlide 11

B2C in Korea

  • B2C market : 5.8% billion USD as of 2003, taking up 4.7% of the total retail market(105.8 billion USD)

    Growth of B2C Market in Korea

    (in Billion USD)

  • <Source: National Statistical Office>

G2b in koreaSlide 12

  • Establishment of a single window government procurement system for entire process via the Internet

• Public announcement of all government-wide projects for bidding

• Enabling online process for registering as a contractor, bidding on

public project, signing contract agreement, and receive payment

for services

• Standardized e-Catalog system for procurement supplies

Realizingfair and transparent procurement

process and services

G2B in Korea

G2b in korea1Slide 13

G2B in Korea

Other G2B Tool

Tax Reduction

  • ‘Special Act on Taxes’ enacted in 2001

  • Online single window for public services

  • Trade permit, logistics, customs declaration

  • Credit inquiry, business matchmaking

Online Business

Registration & permit

Online Export & Import

Processing

Promotional sites for

international trade

information

Government initiativesSlide 14

Government Initiatives

E-leadership

  • Establishment of ‘Informatization Strategy Meeting’ under the presidency

  • e-Korea Vision 2006, e-business Facilitation Measure

  • Informatization Promotion Committee and several sub-committees

  • Collaboration for detailed implementation strategy=

Political Commitment from

the Top

Visions & strategies for

Informatization

Implementation Framework

Cooperative Partnership

btw Public & Private Sectors

Government initiatives1Slide 15

Government Initiatives

Government’s role

Enhance e-trust for

E-business market

  • Building trust for user and consumer

  • High-speed broadband network, R&D, HRD

  • Procurement of government and public corporate

  • Create favorable market environment

  • e-commerce law and regulations

Establish infrastructure

Facilitate G2B

Promote e-commerce

in the private sector

Lay a groundwork for

cyber trade standardization

Government initiatives2Slide 16

Government Initiatives

Public Policy

e-Commerce and Informatization Budget Portion for Traditional Industries

(Unit : million USD)

Government initiatives3Slide 17

Government Initiatives

Key-Policies for e-Business

Government initiatives4Slide 18

Government Initiatives

  • Technical problems in MSB

    • No IT expert, insufficient number of application software

    • lack in capacity to operate or maintain IT resources adopted.

    • low standardization level

  • Skills

  • Solutions;

    • Adoption of ASP in the form of consortium.

    • Provide free IT training courses

    • Development & introduction of Business models through consulting

Korea s experience in promoting e business adoption among micro and small businessSlide 19

Part 3

The ASP Based e-Business Project

for Small Business

Implementation frameworkSlide 20

Implementation Framework

  • The implementation structure of ASP based e-business project for SMB

MIC

SMBA

Promotion Committee

NCA

Related Agencies Council

TFT

Advisory Committee

Service Business

KIMI

BM Business

CNK

Implementation progressSlide 21

Implementation Progress

  • Master Plan for the project & 1st year project began

  • Formulation of ASP consortia

  • ASP-based integrated IT pilot services

2001

2002

  • 45 integrated ASP services

  • 3 community-BMs focusing on unions or associations related to small businesses.

  • Designation of 5 ASP consortia with 175 companies

  • A hub-BM developing company was designated for provider-oriented e-business adoption

  • 4 community-BM developing companies chosen.

2003

2004

  • The 4th year project on progress.

Implementation strategySlide 22

Implementation Strategy

ASP Diffusion

“Cost-effective”

Training for SME

“Promote informatization”

Synergy through Consortia

“Maximized synergy

through integration”

Win-Win Framework

“Link suppliers&demanders”

Implementation statusSlide 23

Implementation Status

“Acts independently, attracting MSBs wanting to benefit from ASP services”

NCA

  • The ASP based implementation framework for MSB informatization

Select & designate Consortia

Consortium

Public bidding

Broadband ISPs

Portal Service Providers

MSB

Consortia

Consortia

Contents Providers

Consortia

Solution Providers

Consortia

Etc…

MSB

MSB

Implementation status1Slide 24

Implementation Status

  • Development of Business Models:

    • Pilot projects involving industry unions, industry associations, and IT companies were launched to promote development of network-based business models.

    • Two types of e-business models :

  • Community-Model

  • “Demander oriented”

  • Industry Association or Union

  • 7 models developed by 2003

  • HUB-Model

  • “Supplier oriented”

  • Individual service provider

  • 32 models developed by 2003

Firm level supportSlide 25

Firm Level Support

Educational Support & PR

  • Customized training services & promotional activities through Unions or associations - > 160,000 companies benefited as of Nov 2003

Creation of Demands on Initial IT services for MSB

  • Government led the creation of the market (80% of investment covered by matching-fund system)

  • A provider-oriented business model proposed

Cyber IT Support center

  • Provide online service and technical support for e-Business project

Korea s experience in promoting e business adoption among micro and small businessSlide 26

Part 4

30,000 SMB Informatization Project

Korea s experience in promoting e business adoption among micro and small businessSlide 27

5 Areas of Assistance

Pre-Consulting for Informatization

  • 30,000 SMB Informatization Project

Basic Business Software

ERP

Manufacturing Process Informatization

Collaborative Informatization

Out of 37,392 companies applied 35,324 companies were selected for assistance

Korea s experience in promoting e business adoption among micro and small businessSlide 28

Pre-Consulting

for Informatization

Basic Business

Software

  • Raise awareness on Informatization

  • Present IT guidelines appropriate to their level

  • Business process software for SMBs in early stage of Informatization

  • For businesses looking to integrate their system

  • Informatizing work process in the factory

  • External expansion of Informatization

ERP

Manufacturing

Process

Informatization

Collaborative

Informatization

Korea s experience in promoting e business adoption among micro and small businessSlide 29

Part 5

Conclusion

Success factorsSlide 30

Success Factors

Technical

Factors

Organizational

Factors

Environmental

Factors

Government reduced

cost burden for

IT adoption

Information systems

& business models

Customized for

Industry types

Various

IT training

Systematic

IT manpower support

Advanced

Information

Infrastructure

RecommendationSlide 31

Recommendation

  • Establishment of Standards

  • Ministerial cooperation

  • Long-term and effective support policies

  • Differentiated policies for small and medium businesses

  • Improving environments from the public sector

  • Meeting technological progress

Korea s experience in promoting e business adoption among micro and small businessSlide 32

Thank You!


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