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National Computerization Agency Koreas Experience in promoting e-business adoption among micro and small business Yoon, Jeongwon Director National Computerization.

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Presentation on theme: "National Computerization Agency Koreas Experience in promoting e-business adoption among micro and small business Yoon, Jeongwon Director National Computerization."— Presentation transcript:

1 National Computerization Agency Koreas Experience in promoting e-business adoption among micro and small business Yoon, Jeongwon Director National Computerization Agency

2 1.Introduction 2.E-business in Korea 3.ASP based e-business project for small business 4.30,000 SMB Informatization Project 5.Conclusion Table of Contents

3 National Computerization Agency Part I Introduction

4 National Computerization Agency Why e-business ? Remove the barriers of time and distance with the Internet Tool to boost the nations competitiveness as witnessed in the Korean success case. Background Cyber Korea 21e-Korea Vision 2006 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

5 National Computerization Agency Background Total Commercial Transaction vs. e-Commerce(B2B, B2C) Unit : billion USD Source: National Statistical Office of Korea Continual growth in size of e-commerce market in Korea 47.9 billion dollars in 2000 -> 195.6 billion dollars in 2003 1,058 48 1,090 99 1,155 148 1,188 196 0 200 400 600 800 1,000 1,200 1,400 2000200120022003 Total e-commerce transaction e-commerce transaction 4.5 % 9.1 % 12.8 % 16.5 %

6 National Computerization Agency Background Relation btw GDP Growth and IT Industry Growth in Korea Source: Bank of Korea -10 -5 0 5 10 15 20 25 30 35 40 1996199719981999200020012002 GDP Growth Rate IT Industry Growth Rate Unit : %, contrast to previous year

7 National Computerization Agency Closing the gap in IT use between small businesses and medium & large enterprises Utilizing its highly advanced information infrastructure Objectives Highly Advanced Information Infrastructure Promoting new business model Right business environment for small businesses

8 National Computerization Agency Part 2 E-Business in Korea

9 National Computerization Agency More than 88% of the total e-commerce market(198.3 billion USD as of 2003) B2B in Korea 19981999200120022003 1)Electronics 2)Automobiles 3)Construction 4)Defense Start with 9 fields; steel, shipbuilding, machinery,etc. 11 fields added; watches, agricultural products, livestock, and machinery, etc. 10 fields added; Semiconduc tor animation, etc.(Total 30 fields) CALSB2B Network Project 9 fields added, ; stationary, jewelry, fruit, and flowery. (Total 1,017 companies)

10 National Computerization Agency B2B in Korea B2B Network Project Government investment : 70% of the total costs (Total $51mil) ISP, Standardization, raising awareness on e-business, pilot implementation CALS Project Large Enterprise SME Large Enterprise B2B Network Project Optimizing Value Chain Large Enterprise

11 National Computerization Agency 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) B2C in Korea

12 National Computerization Agency G2B in Korea Standardized e-Catalog system for procurement supplies Public announcement of all government-wide projects for bidding Realizing fair and transparent procurement process and services Enabling online process for registering as a contractor, bidding on public project, signing contract agreement, and receive payment for services Establishment of a single window government procurement system for entire process via the Internet

13 National Computerization Agency G2B in Korea Special Act on Taxes enacted in 2001 Online single window for public services Trade permit, logistics, customs declaration Credit inquiry, business matchmaking Other G2B Tool Tax Reduction Online Business Registration & permit Online Export & Import Processing Promotional sites for international trade information

14 National Computerization Agency 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= Government Initiatives E-leadership Political Commitment from the Top Visions & strategies for Informatization Implementation Framework Cooperative Partnership btw Public & Private Sectors

15 National Computerization Agency 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 Government Initiatives Government s role Enhance e-trust for E-business market Establish infrastructure Facilitate G2B Promote e-commerce in the private sector Lay a groundwork for cyber trade standardization

16 National Computerization Agency Government Initiatives Public Policy 199819992000200120022003 e-commerce/informatization of traditional industries( ) 2.12.33.544.589.3106.9 Informatization budget( ) 5967141,0131,2241,3431,392 portion( / ) 0.35 % 0.33 % 0.35 % 3.63 % 6.65 % 7.67 % e-Commerce and Informatization Budget Portion for Traditional Industries (Unit : million USD)

17 National Computerization Agency Government Initiatives Key-Policies for e-Business CategoryProjectBudget(03)Ministry SMB Informatization ASP based e-business project for small business 26.2MIC 30,000 SMB informatiozation project 27.5MCIE Reform consortium for SMB9.6SMBA HRDTraining HR in e-commerce2.1MCIE Technology Development Next generation e-business technology development 4.6MIC E-commerce technology development 5.5MCIE Standardization E-business infrastructure technology 0.9MIC

18 National Computerization Agency Skills 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 Solutions; Adoption of ASP in the form of consortium. Provide free IT training courses Development & introduction of Business models through consulting

19 National Computerization Agency Part 3 The ASP Based e-Business Project for Small Business for Small Business

20 National Computerization Agency The implementation structure of ASP based e-business project for SMB Implementation Framework MICSMBA NCAPromotion Committee TFT Related Agencies Council Advisory Committee Service BusinessKIMIBM BusinessCNK

21 National Computerization Agency Implementation Progress Master Plan for the project & 1st year project began Formulation of ASP consortia ASP-based integrated IT pilot services 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. The 4th year project on progress. 2001 2002 2003 2004

22 National Computerization Agency Implementation Strategy ASP Diffusion Cost-effective Training for SME Promote informatization Synergy through Consortia Maximized synergy through integration Win-Win Framework Link suppliers&demanders

23 National Computerization Agency The ASP based implementation framework for MSB informatization Implementation Status Consortia Public bidding NCA Select & designate Consortia Consortium MSB Broadband ISPs Portal Service Providers Contents Providers Solution Providers Etc… Acts independently, attracting MSBs wanting to benefit from ASP services

24 National Computerization Agency 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 : Implementation Status HUB-Model Supplier oriented -Individual service provider - 32 models developed by 2003 HUB-Model Supplier oriented -Individual service provider - 32 models developed by 2003 Community-Model Demander oriented -Industry Association or Union - 7 models developed by 2003 Community-Model Demander oriented -Industry Association or Union - 7 models developed by 2003

25 National Computerization Agency Firm Level Support Educational Support & PR Creation of Demands on Initial IT services for MSB Customized training services & promotional activities through Unions or associations - > 160,000 companies benefited as of Nov 2003 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

26 National Computerization Agency Part 4 30,000 SMB Informatization Project

27 National Computerization Agency 30,000 SMB Informatization Project 5 Areas of Assistance Pre-Consulting for Informatization Basic Business Software ERP Manufacturing Process Informatization Collaborative Informatization Out of 37,392 companies applied 35,324 companies were selected for assistance

28 National Computerization Agency 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 Pre-Consulting for Informatization Pre-Consulting for Informatization Basic Business Software Basic Business Software ERP Manufacturing Process Informatization Manufacturing Process Informatization Collaborative Informatization Collaborative Informatization

29 National Computerization Agency Part 5 Conclusion

30 National Computerization Agency Success Factors Technical Factors Organizational Factors Environmental Factors Government reduced cost burden for IT adoption Systematic IT manpower support Information systems & business models Customized for Industry types Various IT training Advanced Information Infrastructure

31 National Computerization Agency 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

32 National Computerization Agency Thank You!


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