Transcript Korea’s Experience in promoting e-business adoption among micro and small business

Korea’s Experience in
promoting e-business
adoption among micro and
small business
Yoon, Jeongwon
Director
National Computerization Agency
National Computerization Agency
Table of Contents
1.
2.
3.
4.
5.
Introduction
E-business in Korea
ASP based e-business project for small business
30,000 SMB Informatization Project
Conclusion
National Computerization Agency
Part I
Introduction
National Computerization Agency
Background
Cyber Korea 21
• Renewed focus on Internet
growth and Internet
Business :
“Use ICT as a strategic means to
overcome economic crisis”
e-Korea Vision 2006
• 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.
National Computerization Agency
Background
 Continual growth in size of e-commerce market in Korea
 47.9 billion dollars in 2000 -> 195.6 billion dollars in 2003
Total Commercial Transaction vs. e-Commerce(B2B, B2C)
16.5
Unit : billion USD
1,400
4.5
1,200
48
%
12.8
9.1
99
%
148
%
%
e-commerce
transaction
196
1,000
800
600
1,058
1,090
1,155
1,188
Total e-commerce
400
transaction
200
0
2000
2001
2002
2003
Source: National Statistical Office of Korea
National Computerization Agency
Background
Relation btw GDP Growth and IT Industry Growth in Korea
40
35
30
25
IT Industry Growth Rate
20
15
10
5
0
GDP Growth Rate
1996
1997
1998
1999
2000
2001
2002
-5
-10
Unit : %, contrast to previous year
National Computerization Agency
Source: Bank of Korea
Objectives
 Closing the gap in IT use between small businesses and medium &
large enterprises
 Utilizing its highly advanced information infrastructure
Right business
Promoting new
business model
National Computerization Agency
environment for small
businesses
Part 2
E-Business in Korea
National Computerization Agency
B2B in Korea
More than 88% of the total e-commerce market(198.3 billion USD as
of 2003)
CALS
1998
B2B Network Project
1999
2001
2002
2003
11 fields
10 fields
9 fields
1) Electronics
Start with 9
added;
added;
added, ;
fields;
watches,
Semiconduc stationary,
2) Automobiles
agricultural
tor
jewelry, fruit,
steel,
products,
animation,
3) Construction
and flowery.
shipbuilding,
livestock, and etc.(Total
(Total
machinery,etc.
4) Defense
machinery,
30 fields)
1,017
etc.
companies)
National Computerization Agency
B2B in Korea
Large Enterprise
Large Enterprise
Large Enterprise
Large Enterprise
SME
SME
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
National Computerization Agency
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)
7
6
5.8
5
4.2
4
3
2.2
2
1
0.6
0
2000
2001
2002
2003
<Source: National Statistical Office>
National Computerization Agency
G2B in Korea
Establishment of a single window government procurement system for
entire process via the Internet
• Public announcement of all government-wide projects for bidding
• Enabling online process for registering as a contractor, bidding on
public project, signing contract agreement, and receive payment
for services
• Standardized e-Catalog system for procurement supplies
Realizing fair and transparent procurement
process and services
National Computerization Agency
G2B in Korea
Other G2B Tool
Tax Reduction
Online Business
Registration & permit
Online Export & Import
 ‘Special Act on Taxes’ enacted in 2001
 Online single window for public services
 Trade permit, logistics, customs declaration
Processing
Promotional sites for
international trade
information
National Computerization Agency
 Credit inquiry, business matchmaking
Government Initiatives
E-leadership
Political Commitment from
the Top
Visions & strategies for
Informatization
Implementation Framework
Cooperative Partnership
btw Public & Private Sectors
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
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
National Computerization Agency
 Building trust for user and consumer
 High-speed broadband network, R&D, HRD
 Procurement
corporate
of
government
and
 Create favorable market environment

e-commerce law and regulations
public
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
%
0.35
%
3.63
%
6.65
%
7.67
%
National Computerization Agency
Government Initiatives
Key-Policies for e-Business
Category
SMB
Informatization
HRD
Technology
Development
Standardization
National Computerization Agency
Project
Budget(’03)
Ministry
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
Training HR in e-commerce
2.1
MCIE
Next generation e-business
technology development
4.6
MIC
E-commerce technology
development
5.5
MCIE
0.9
MIC
E-business infrastructure
technology
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
National Computerization Agency
Part 3
The ASP Based e-Business Project
for Small Business
National Computerization Agency
Implementation Framework
 The implementation structure of ASP based e-business project for SMB
MIC
Promotion Committee
SMBA
NCA
Related Agencies Council
Advisory Committee
TFT
Service Business
National Computerization Agency
KIMI
BM Business
CNK
Implementation Progress
2001
2002
2003
2004
 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 provideroriented e-business adoption
 4 community-BM developing companies chosen.
 The 4th year project on progress.
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”
National Computerization Agency
Implementation Status
• The ASP based implementation framework for MSB informatization
“Acts independently, attracting MSBs
wanting to benefit from ASP services”
NCA
Select & designate Consortia
Public bidding
Consortia
Consortia
Consortium
Broadband ISPs
Portal Service Providers
Consortia
Contents Providers
Solution Providers
Consortia
MSB
National Computerization Agency
MSB
Etc…
MSB
Implementation Status
 Development of Business Models:
 Pilot projects involving industry unions, industry associations, and
IT companies were launched to promote development of networkbased business models.
 Two types of e-business models :
Community-Model
HUB-Model
“Demander oriented”
“Supplier oriented”
-Industry Association or Union
- 7 models developed by 2003
-Individual service provider
- 32 models developed by 2003
National Computerization Agency
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
investment covered by matching-fund system)
• A provider-oriented business model proposed
(80%
Cyber IT Support center
• Provide online service and technical support for e-Business
project
National Computerization Agency
of
Part 4
30,000 SMB Informatization Project
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
National Computerization Agency
Pre-Consulting
for Informatization
Basic Business
Software
ERP
• 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
Manufacturing
Process
Informatization
Collaborative
Informatization
National Computerization Agency
• Informatizing work process in the factory
• External expansion of Informatization
Part 5
Conclusion
National Computerization Agency
Success Factors
Technical
Factors
Organizational
Factors
Government reduced
cost burden for
IT adoption
Systematic
IT manpower support
National Computerization Agency
Environmental
Factors
Various
IT training
Information systems
& business models
Customized for
Industry types
Advanced
Information
Infrastructure
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
National Computerization Agency
Thank You!
National Computerization Agency