This project is co-funded by:

1. International Conference on ICT Solutions for Mediterranean SMEs NET e-conomy Implemented by (main contractor): This project is co-funded by:

2. Workshop 3- Net e-conomy Ödül Özbıyık Project Expert Turkish Foundation for Small and Medium Business

3. NET e-economy Introduction ICT and the effects of the technology on structure of the society gain importance in the respect of national development strategies. • The concept of the e-economy is based on two main components • of economical activity: • Production / adding value • Trade in the respect of e-economy

4. In the Information Society • Differentiate production from consumption and commercial activities • New work shape become valid and current • More productive companies • Speed of growth, increasing productivity, decreasing inflation • Connecting companies to network • Rearranged educational system • Public, private, NGOs, institutions obliged with digital work conditions • Public policies based on public information, opportunity equality, creativity. • Achievement experiences of countries for transformation periods and policies.

5. Some predecessors of strategically approach (from perspective of e-economy): • SME model, clusters and incubators should be rapidly constructed • Policies helped employee should be put forward • Configuration of connection producers and consumers by means of e-commerce • Realize policies that can take quality labour force in the country • Operate infrastructural and economical policies for underdeveloped regions • State should be encouraged and followed-up development • e-bank and financial services legislations should be included in laws

6. The Concept of e-economy There are lots of important technological developments which cause some advantages: • Easier and faster data storing and sharing • Store, process and transfer text, audio and video in digital format • Change the relationships between people and institutions that use this opportunities • Change and get better life standard and format and marketing processes All of these changes cause information society and information based economy. Economical environment, that has been changed by ICT and especially internet, is E-economy or new economy which is the revolution of ICT.

7. E-economy is not only dot.com companies or technology companies. • On e-economy: • technology provider companies (ISP, ASP) • new business models (e-market) • employers, suppliers and consumers are connected by internet and intranet • e-business process (by means of SCM) • operations by using ICT e-economy basically is “knowledge economy”. E-economy focuses on information management, process integration, and reorganization engineering rather than technology.

8. Difference between traditional economy and new economy (e-economy)

9. Opportunities of e-economy • Decrease cost of production and distribution of product and services • Increase and accelerate communication and collaboration • Increase competitiveness and transparency • Create new company models • Raise alternatives for customers and customer satisfaction

10. Opportunities of e-economy • Decrease cost of production and distribution of product and services • Fast, flexible, cheap information sharing • Short communication duration • Easy communication • Increase operation in digital environment • Ensure efficiency and productivity • Decrease ratio of fault • Decrease cost for sectors that use data and data processing.

11. Opportunities of e-economy • Decrease cost of production and distribution of product and services • Increase and accelerate communication and collaboration • faster information sharing among companies, suppliers and customers • security is most important • Information based planning • better decision • reduce mobile stock • increase productivity • new approaches and application • customer request and necessities • Directors can follow performance, evaluate, make a decision • Collection and analyzed data

12. Opportunities of e-economy • Decrease cost of production and distribution of product and services • Increase and accelerate communication and collaboration • Increase competitiveness and transparency • Companies can serve products and services to different location and new • marketplaces easily. • SMEs are able to trade all around the World • “Globalize competition environment” • Perfect Competition Environment • Increasing transparency and competitiveness have some impacts: • Decrease prices and so consumers effect positively. Decrease cost Productivity and customer satisfaction.

13. Opportunities of e-economy • Decrease cost of production and distribution of product and services • Increase and accelerate communication and collaboration • Increase competitiveness and transparency • Create new company model • Changing relationship of customers and sellers • -Direct communication • -Communication by mediator • Mediator companies compare different rival product and serve them

14. Opportunities of e-economy • Decrease cost of production and distribution of product and services • Increase and accelerate communication and collaboration • Increase competitiveness and transparency • Create new company model • Raise alternatives for customers and customer satisfaction • dot.com and traditional companies sell products by internet • detailed information about products and services on internet • customized selection • delivered to address • pay on digital platform • Internet technologies increase the alternatives and decrease prices.

15. E-economy and the Components of e-economy • ICT and Infrastructure of ICT • Effects of ICT • Actors • Politics and standards

16. 1. ICT and Infrastructure of ICT • audio, video and data on Internet should be uninterrupted, fast and integrated • service providers should serve special price for e-economy • Information and Communication Technologies (ICT) • covers Virtual networks • serves security, access and performance • User access, communication network, encryption and information security, • and related policies used for institutions • Accessibility and continuity are important elements of e-economy • More investments in ICT and more ICT usage cause usage resources, • productivity and production

17. 2 . Effects of ICT The countries in new economy, raise growth speed, decrease inflation, create new job opportunities, and increase international trade. • Sector structure and Business Life • e-commerce • SME Model • effects of ICT sector on the others

18. a) e-commerce • Success of e-commerce depends on broad access o ICT, designing and • applying standards. Basic Tools of e-commerce Internet and EDI are most important elements EDI and XML information flow occurs in standards, fast and productive Computer Internet Telephone Fax Electronic Data Interchange (EDI) Electronic payment

19. a) e-commerce • Advantages Less time No time and location limit Operations in e-commerce Interactive and consecutive procedures Less cost • Most important problem is Security • Actors should be trust each other • Privacy, authentication, non-repudiation and data integrity • Digital sign covers these necessities • Public and private keys are generated by certificates.

20. b) SME Model • SMEs is a new engine to create a new work area • collaboration among private sector, local societies, institutions and • international organizations. • Restructured production process • (shift from monopoly company approach to multinational company model) • SMEs gain importance • SME generate a functional model in terms of • organizations • technical labor force • technology development

21. b) SME Model • Steps of restructuring are • industry politics • R&D strategies • information infrastructure politics should be integrated If R&D activities are NOT effective  product quality and cost is a weak chain of whole • Digital marketplaces and ASP focus in SMEs gain importance • They serve SMEs possibility of communication, planning, production • and selling. • Enterprises integrate suppliers, customers and competitor to their network

22. c) Effects of ICT sectors to the others • ICT changes working, learning, entertainment and life style of human being, • 5% per person more production • maximize effects of Internet on education, human resources, • operational productivity, information management, and communication • service in every platform (i.e. Call centers, web sites) by using ICT • optimize information sharing, work processes, production cost and • selling estimation.

23. c) Effects of ICT sectors to the others ICT is not a luxury for SMEs that have 10-250 staff, anymore ICT as a tool to increase productivity, to competitive with bigger firms to integrate partnerships and digital marketplaces to develop optimization and product quality by means of common R&D, production and planning.

24. c) Effects of ICT sectors to the others • For designing, development, management of ICT • Big companies use outsourcing • SMEs lease services from Service Provider Companies • because of lack of investment capital and labor capacity. New work areas and models (Application provider, system administration, communication services and professional management consulting)

25. c) Effects of ICT sectors to the others • In developing Countries, a firm • if use R&D, quality labor force, effective selling and • customer centered approach • produce high profit products • other companies have limited ICT infrastructure • with cheap labor force and simple products • be successful monopoly markets ICT consistency speed affects enterprises and life styles In the societies have young and high population open to technology and communication ICT Infrastructure Competitive market arrangement Education Productivity and Learning speed increase

26. 3. Actors Developing countries are the new actors in Information Society. Developing countries invite NGOs, companies, foundations, universities and international institutions for strong collaboration in the transition process Private Sector Companies act as a special role for ICT and networks Development in Information Society Companies are leaders to information revolution and information society. There should be some precautions for companies: • Handicaps for entrepreneurs should be canceled / changed • Venture capital system should be developed • Technological legislations should be revised for benefits of companies

27. 4. Politics and Standards - Clusters Definitions “… geographically proximate firms in vertical and horizontal relationships, involving a localised enterprise support infrastructure with a shared developmental vision for business growth, based on competition and co-operation in a specific market field” (Cooke, 2002) “… a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalties and complementarities” (Porter, 1998)

28. Benefits of Clusters • Productivity Gains • specialised inputs & services • potential for local sourcing • potential for joint bidding / marketing etc • more efficient project ‘exit’ • Innovation Gains • supplier-customer interaction (proximity) • proximity to knowledge centres • easier exchange of tacit knowledge • New Business Formation • better info on opportunities, niches etc • better informed Virtual Community system

29. Clusters, • are composed of SMEs • have network among the SMEs • have geographically proximate • have common vision to development • have common socio-cultural identity In clusters, • Competition and cooperation are important todevelopment • Specialization is important

30. Some Conditions required for formation and achievement of Clusters • Regionalism is the most important subject (Industrial Zone) • Clusters may not be in a same sector but sub-sectors. • Clusters should have a common identity and a common vision • Clusters should be dynamic • Geographically proximate • Clusters should have strong infrastructures

31. The processes of the development of Clusters • A Company or an institution should be a leader for formation of cluster • Determined a person act as a facilitator who determine and located an office • Gathering the firms under common vision • Creating awareness and identity • Determine the principles for privacy and sharing information.

32. Cluster Process: Who Takes the Lead? • Typically government (GCIS, 2003) 500 cluster initiative (CI) global survey shows: - 32% initiated by government, 18% industry - 54% funding government, 18% industry • Steering: 70% of CIs surveyed say ‘Industry’ • Most cluster firms within 1 Hour drive from each other (95% involve at least 10 active members) • 89% of CIs have a facilitator, 68% facilitator office, 76% Task Forces, only 25% have adequate budget.

33. Cluster opportunities of Turkey are the following: -According to survey results of Regional Manufacturing Inputs & Outputs (S. Akgüngor, N. Kumral & A. Lenger, 2000) • Agro-food – Black Sea and Eastern Anatolia • Mining – Black Sea and Aegean • Engineering – Central Anatolia and Black Sea • ICT – South Eastern Anatolia and Marmara • Textile & Leather – South Eastern Anatolia and Eastern Anatolia • Chemicals – Aegean and Black Sea Cluster Initiative Policies May Increase Business Performance in these Regions.

34. Conclusion of Clusters: Innovation>Productivity>Competitiveness>Growth However, innovation is only not enough to achievement. The most important step is creating a common vision and leading growth in the dynamic structure in this vision.

35. Thank you