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National Computerization Agency

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Presentation on theme: "National Computerization Agency"— Presentation transcript:

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

2 Table of Contents Introduction E-business in Korea
ASP based e-business project for small business 30,000 SMB Informatization Project Conclusion

3 Part I Introduction

4 Background Why e-business ?
Cyber Korea 21 e-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” 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.

5 Background Continual growth in size of e-commerce market in Korea
47.9 billion dollars in > 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 1,155 1,188 600 1,058 1,090 Total e-commerce transaction 400 200 2000 2001 2002 2003 Source: National Statistical Office of Korea

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 1996 1997 1998 1999 2000 2001 2002 -5 -10 Unit : %, contrast to previous year Source: Bank of Korea

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

8 Part 2 E-Business in Korea

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)

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

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>

12 Realizing fair and transparent procurement
G2B in Korea Establishment of a single window government procurement system for entire process via the Internet • 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

13 G2B in Korea Other G2B Tool ‘Special Act on Taxes’ enacted in 2001
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

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

15 Government Initiatives
Government’s role 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 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 Government Initiatives
Public Policy e-Commerce and Informatization Budget Portion for Traditional Industries (Unit : million USD) 1998 1999 2000 2001 2002 2003 e-commerce/informatization of traditional industries(①) 2.1 2.3 3.5 44.5 89.3 106.9 Informatization budget(②) 596 714 1,013 1,224 1,343 1,392 portion(①/②) 0.35% 0.33% 3.63% 6.65% 7.67%

17 Government Initiatives
Key-Policies for e-Business Category Project Budget(’03) Ministry SMB Informatization ASP based e-business project for small business 26.2 MIC 30,000 SMB informatiozation project 27.5 MCIE Reform consortium for SMB 9.6 SMBA HRD Training HR in e-commerce 2.1 Technology Development Next generation e-business technology development 4.6 E-commerce technology development 5.5 Standardization E-business infrastructure technology 0.9

18 Government Initiatives
Skills 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 The ASP Based e-Business Project
Part 3 The ASP Based e-Business Project for Small Business

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

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.

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”

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

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

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

26 30,000 SMB Informatization Project
Part 4 30,000 SMB Informatization Project

27 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 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 Basic Business Software ERP Manufacturing Process Informatization Collaborative Informatization

29 Part 5 Conclusion

30 Success Factors Technical Factors Organizational Factors Environmental
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

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

32 Thank You!

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