The Information Society: Measuring the SMEs and the Digital Divide Fabiola Riccardini National Statistical Institute of Italy fariccar@istat.it UNCTAD Expert Meeting - Measuring Electronic Commerce – Geneva September 2003

Points of presentation Policy needs Definition, European/OECD and Italian Approach to Information Society Measuring the SMEs Measuring the Digital Divide: why, what National measurement: Italy Conclusions

Policy needs Policies for business, households and government in using ICTs SMEs and very small enterprises Economic Sectors policy Infrastructure, in particular broadband E-government E-content Territorial development policy Agreements-protocols between the National Statistical Office with Ministry of Innovation and Ministry of Economy and under definition with Ministry of Production Activities for building up data bases on information society for monitoring policies

Defining Information Society OECD: information economy + social aspects = information society European Definition: information society is connected to ICT, knowledge society, innovation and R&D, social aspects (education, labour market, health…) and globalization

Italian Approach to Information Society: what and how to measure Indicators on: ICT usage ICT sector Audiovisuals E-commerce E-business Households/individuals statistics e-public sector and e-government statistics Micro and macro analysis Digital divide Qualitative and quantitative analysis Sources: Most of the indicators derived from official statistics: integrated databases, surveys and administrative sources Existing surveys: New surveys

Surveying the SMEs: Why SMEs (1-250 empld) in Europe are 80 % of the total business sector enterprises in 2000. In Italy SMEs are 99 % of the total business sector enterprises (graph). Micro enterprises (1-9 empld) are 90% SMEs purchase more than sell over the net SMEs in networking along the same product value chain or have same scope economies SMEs as specialized intermediaries in e-commerce, ISP, telecommunication services …..

Surveying SMEs in Italy using SBS Regulation framework Description of the survey and questionnaire Results Analysis

Description of the SME survey (2000 year) Name of source Sample survey on small and medium enterprises for enterprises with 1-99 persons employed. Legal basis The survey is enforced by the National Statistical Program included in Decree 322/89. Obligation on units to provide data Decree 322/89 establishes that all public bodies and organisations, as well as private organisations and individuals, are under obligation to provide, upon request, all data and information needed and programmed by law. Register on which the source is based A.S.I.A. register (Archivio Statistico delle Imprese Attive) is used. It is a statistical Business Register resulting from the logical and physical combination of data resident in statistical and administrative sources (Tax Register, Register of Enterprises and Local Units provided by the Chambers of Commerce, Social Security Register, Work Accident Insurance Register, Register of the Electric Power Board) treated with statistical methodologies. Population coverage Activities covered The survey covers the following economic activities according to the Nace rev.1: Sections C, D, E, F, G, H, I, J (division 67), K, M, N and O (divisions 90, 92 and 93). Geographical area covered The survey covers all of Italy, i.e. 21 administrative regions. Size class covered The survey covers enterprises with 1-99 persons employed.

Description of the SME survey (2000 year) Observation unit(s): Enterprise Summary list of variables : The economic variables covered in the survey are essentially those that contribute to estimate the value added, the structure of the employment, the personnel cost, the investments and others economic variables. Besides the questionnaire is composed of a few sheets multipurpose with qualitative questions about relation between enterprises, use of ICT (personal computer use, access to the web, e-commerce), research and development activities, innovations, research personnel and vocational training. Time span covered by data: The reference period is the calendar year. In cases where the accounting year of an enterprise is based on a 12 month period other than the calendar year then it provides the data requested with reference to results for the year closed before June 1st of the year following the reference year. Primary data collection method Media: Postal questionnaire Timetable of data collection: Data collection is started 6 months after the end of the reference period and the survey is closed 18 months after the end of the reference period. Criteria for stratification: Economic activity, persons employed size classes and geographical area. Threshold values and sample size: Division of economic activity size classes 10-45; 67, 80, 85, 90, 91, 93 1-9; 10‑19; 20‑49; 50‑99 50-52 1; 2-4; 5-9; 10-19; 20-49; 50‑99 55; 60-64; 70-74 1-4; 5-9; 10-19; 20-49; 50‑99 Geographical area: 21 administrative regions The sample covered: 121,137 enterprises in respect of a total population of 4,134,000 enterprises.

Description of the SME survey (2000 year) Response rate 71,500 questionnaires were returned. This is a response rate of approximately 59,0%. Frequency of data collection or list of recent reference years The survey is carried out yearly. Production of results Estimates for non-response The methodology used for extrapolate the data of the survey to the population (in terms of enterprises and persons employed) is based on bound weighted estimator.

Module on ICT usage SECTION. 8 - Other information Information and communication technologies 30/6/2001 8.1 Does your enterprise use at least a personal computer or a data processing system ? YES NO 8.2 Does your enterprise use email (only if open to external servers) ? YES NO 8.3 Does your company have a web site or one or more web page? YES NO Electronic commerce purchases and sales of assets or services that occur through one of the networks using Internet Protocol (www, Extranet on Internet, EDI on Internet, mobile phone with access to Internet) and over other computer-mediated networks other than Internet (EDI, interactive telephone systems). Goods and services are ordered over those networks directly by enterprise, but the payment and the delivery of the good or service may be conducted on or off-line. Orders received via telephone, facsimile and non- interactive e-mails are not counted as electronic commerce. -- Has your enterprise purchased products/services via Internet in 2000 (purchases on line) or during the first semester of 2001 ? 2000: YES NO 2001: (January-June): YES NO If yes, in reference to year 2000 please provide an estimate, in percentage, of the total value of on line purchases on total purchases of goods and services sect. 1): |__|__|__| % Has the enterprise received orders via Internet during 2000 and during the first semester of 2001 ? 2000: YES NO 2001: (January-June): YES NO If yes, in reference to year 2000 please provide an estimate, in percentage, of the on line turnover on total turnover: |__|__|__| %

Some results from the SME survey ICT usage of enterprises with less than 100 employed at 30/6/2001 % of enterprises with: size classes 1-2 3-9 10-19 20-49 50-99 TOT At least one PC or computing system 43,7 76,0 93,3 97,0 98,5 51,7 At least one e-mail address 18,8 42,7 67,2 82,5 89,3 25,5 A web site or a page on Internet 5,5 18,1 35,2 50,2 62,8 9,3

Some results from the SME survey ICT usage of enterprises with less than 100 employed at 30/6/2001 % of enterprises with: Manufact. Construct. Trade Other services TOT At least one PC or computing system 60,1 37,7 48,5 55,7 51,7 At least one e-mail address 32,8 14,1 20,0 30,7 25,5 A web site or a page on Internet 16,0 4,7 6,8 10,4 9,3

Some results from the SME survey Enterprises with less than 10 employed with ICTs by size and economic classes at 30/6/2001 PC E-mail add. Web pages 1-2 3-9 1-2 3-9 1-2 3-9 Manufactoring 39,8 78,4 14,9 43,5 5,8 19,5 Construction 25,4 67,8 5,4 33,1 1,7 11,7 Trade and Hotel 39,1 73,9 14,3 37,5 5,0 16,5 Other Services 54,9 82,2 28,6 55,9 7,1 23,4 TOTAL 43,7 76,0 18,8 42,7 5,5 18,1

Some results from the SME survey and ICT usage on business survey

Some results from the SME survey and ICT usage survey

Micro analysis: ICT usage and business performance. Some results Degree of firms computing with best economic performance with respect to other firms by size and economic classes and performance indicator. Year 2000, firms with less than 10 employed Manufact. Trade Other services 1-2 3-9 1-2 3-9 1-2 3-9 employment growth Personal computer 14,7 4,3 23,3 11,5 11,9 3,1 E-mail 5,2 5,3 8,0 13,8 5,3 6,3 Web site 2,8 3,8 3,2 5,3 2,3 5,1 productivity p.c. 19,4 14,7 21,1 16,7 14,4 18,2 E-mail 7,9 16,2 7,5 15,3 7,9 15,3 Web site 3,8 6,7 1,7 9,0 1,7 7,8 profitability p.c. 12,6 9,6 12,5 8,8 10,2 5,7 E-mail -0,7 11,7 11,7 8,8 1,7 7,6 Web site 1,9 4,5 3,2 6,1 2,0 3,8

Advantages in using SBS Regulation framework Reduce business statistical burden Economic data, structural data in the same framework of technological data and other factors which affects business competitiveness Reduce the underestimation of e-commerce volume Micro analysis: ICT usage and business performance Complement the knowledge of the all economy Analyzing digital divide

Analysis of digital divide The term digital divide refers to the disparity in accessing to the technologies and resources of the information and communication. The digitalization of the economy and the society may produce differences and gaps amongst individuals, households, businesses, and geographic areas, rich and poor countries. it is important to have available measures on the dimensions of the digital divide. For example: the concentration ratio Measuring the digital divide involves a lot of criteria that concern infrastructures access, human capabilities, knowledge and education, IT expertise, size and location of business. Also the way in which the technological disparity is reckoned can vary in different perspectives, all having a reasonable fundament. The main framework for developing digital divide indicators is organized as follows: Digital divide definition; International measurement; National measurement On who: households, enterprises, governments Measures Why we need this ?: International harmonization National measurement with same methods

International measurement main current ICT international variables: Infrastructure readiness, that is: Fixed teledensity; Mobile teledensity; Personal computer density; Internet host density; Secure servers density. Socio-economic enablers to use: Internet access cost; Levels of education; Computer or digital literacy; ICT penetration: computer and other ICT technologies diffusion on households, business and government; Intensity indicators: how much electronic commerce, which sectors, size classes or local areas

National measurement Variables: Access issue: individuals, households, rural and urban areas, ICT skills, age, gender, etc.; Business issue: use of ICTs in the firms, company size and structure, public/private, sectors, ICT skills shortage, local areas etc; Government issue: e-government, ICT usage by public employees, on line public services, ICT equipment in the public administration, etc.

National Measurement: Italy Households and individuals digital divide

National Measurement: Italy Business digital divide: concentration ratio, 2000 year. Natio. Sector Size Territor. Mean Divide Divide Divide Diff. Extranet 41,0 10,4 3,9 5,7 EDI 47,4 10,7 2,9 7,6 Broadband connect. 44,9 11,3 2,3 3,1 on-line sales 43,3 11,7 0,6 3,6

National Measurement: Business digital divide Results: Index higher on sectors compared with size class and macro territorial areas…. Much divide among enterprises across sectors instead of size and location of enterprises High divide across sectors …. Could be a sign of low possibility to enlarge relationships of enterprises already late with respect to others Do the use of ICTs leaves to the location of enterprises not discriminatory any more? What is it happening to the industrial districts? We need much more detailed data for understanding better the role of ICTs as a possibility to enlarge the relationships among enterprises

Conclusion Measurement of SMEs, in all their size classes even micro enterprises, is essential for understanding the different usage of ICT by business DD proposed could have different applications for cross countries comparisons and for national analysis. The Gini index is useful for estimating the evolutive, regressive or stationary tendency of DD over time. The index shows the disparity in accessing and using the ICTs Select relevant and appropriate variables to measure DD. Many criteria and measures can be used. Data availability and comparability of the series. Individuals/households, business, governments and other social or institutional groups International measurement of DD ……. OECD publications and further activities National measurement of SMEs and DD ……ISTAT publications and papers We need much more official statistics over time, much more co-operation for a common analysis, quality of data