Usage of innovative ICT tools in Hungarian SMEs on the Northern Great Plain Region László Várallyai Szilvia Botos Ádám Péntek

Introduction The constantly emerging new info-communication services and its accessibility, technical characteristics and affordability now have a central role in shaping the structure and development of the economy. These are important in the improvement of the quality of life and provide new business possibilities and advantages. SMEs also have an essential role in the Hungarian economy, mainly in rural regions. Consequently, the analysis of the ICT situation and future prospects of SMEs has become essential. This presentation shows our research results on the field of using ICT tools in SME’s in Hungary on the Northern Great Plain Region. 2

Situation in rural areas The 66% of Hungary’s territory is classified as a rural area, where 48% of the population lives (Eurostat). In addition our country has a significant agricultural and food industry which is the typical sector of rural regions. The rural regions have, increasingly, multifunctional role and not only agricultural, food and raw material production functions. They have a role of the conservation of natural resources, they have socioeconomic functions, the leisure and tourism industry is very important and enterprises with diversified economic activity appear in these regions. However, these regions facing serious difficulties, resulting from the ageing of population, the poor infrastructure, the lower standards of service and the high unemployment. 3

SME sector SME sector is very important therefore the national and regional competitiveness is crucial. The backwardness of SMEs means big problem for EU and Hungarian economy equally, because they play very important role. In Hungary there are more than 1.6 million enterprise now, and the vast majority of these (~99%) are micro, small and medium sized companies. Furthermore they produce almost 50% of Hungarian GDP. Less than 48% of business start-ups survive the first five years, 90% of them couldn’t develop and just 1% plans the market entry in abroad. In contrast to the traditional organization of a sector where business models looked alike, the range of possible new business models in the ICT era have grown strongly (Herdon et al., 2006). This is the reason why ICT development is so important, particularly for SMEs. ICT helps companies to increase their potential for competitive advantage by enabling them to perform primary and support activities. 4

SME sector The analyses of the SME sector are important to determine the factors which hinder them reducing the digital divide. The empirical studies have confirmed the positive impact of ICT on the performance of enterprises. According to the use of ICT is only help the survival, they don’t provide economic benefits for enterprises in business life. For the competitiveness of rural SMEs in the 21 st century, additional services are required, which increase the satisfaction of clients. We have to review the proposed models for e-readiness assessment on national level and they identified the critical factors for evaluation of e-readiness of SMEs. 5

ICT Readiness of SME sector The concept of e-readiness originated as a result of an attempt to provide a unified framework to evaluate the breadth and depth of the digital divide between the developed and developing countries during the later part of the 1990s. Since 1998, several organisations and agencies largely from developed countries have initiated different macro e-readiness assessment tools that measure the phenomena at national level across key sectors of the economy. Generally, each of the e-readiness assessment tools uses a different definition of e-readiness and techniques of its measurement. In discussing the diversity of e-readiness definitions, more researchers observes that the term “e-readiness” represents the multiple levels of ICT development, and the exact definition of what constitutes e- readiness is still open for debate. Most SMEs across the world are increasingly adopting various ICTs to enhance their e-readiness status to identify, acquire, organise, disseminate and apply information for informed decision making. 6

Methodology Primary research (Own Survey based on Questionnary) - Northern Great Plain Region of Hungary Secondary research (EUROSTAT database) – European Union (involved Hungary) 7

SME provide to the persons employed portable devices that allow a mobile connection to the internet for business use Results

SME buy cloud computing services used over the internet – Results

SMEs having a web site or homepage Results

SMEs use any social media Results

SMEs provided training to their personnel to develop/upgrade their ICT skills Results

ICT functions are mainly performed by external suppliers in case of SMEs Results

Correlations SME buy cloud computing services used over the internet - Having wesite or homepage (medium positive relationship) SME buy cloud computing services used over the internet - Using social media (medium positive relationship) ICT functions are mainly performed by external suppliers - SMEs provided training to their personnel to develop/upgrade their ICT skills (weak positive relationship) 14

Conclusion In most cases the own survey based on questionnary data from the Northern Great Plain Region well simulated the Eurostat data from Hungary. ICT functions are mainly performed by external suppliers in case of SMEs is a big difference between the Eurostat data from Hungary (40%) and the Northern Great Plain Region data (13%). It seems ICT functions are mainly performed by information specialist in this region, because maybe there are some colleges and universities which give a lot of professionals and employed them the SMEs. 15

Thank you very much for your attention! 16