The outstanding contribution of the private sector to Internet development is well recognized and appreciated. Until recently it was able to provide technical and business solutions to most of the problems arising in the course of the Internet evolution, including some problems of a moral nature (for example, online abuse of minors). However, today the private sector needs partnering with other stakeholders in order to ensure fair competition in the cyberspace, access to emerging cyber markets, security and predictability – all the conditions that enable wealth creation activities.
Because of the very nature of the private sector and its focus on profit maximization, it would be naïve to expect that the private sector alone could solve societal problems which are at the root of digital divides. But it can provide technical ideas and contribute to solving such problems, in partnership with the public sector or if the right incentives are in place.
In many countries in transition of the region, ICT businesses are reluctant to the idea of collective bargaining and action, although in some countries the creation of business and/or professional associations has accelerated (table 32). Factors impeding the self-mobilization of the business community in countries in transition include:
• Lack of organizational experience;
• Lack of mutual trust;
• Predominance of small and medium-sized firms among the ICT enterprises;
• Absence of formal channels of public-private dialogue;
• Monopolization and high concentration of real market power in the hands of few companies (in some instances);
• Attitudinal problems (reliance on support of friends or relatives; underestimation of the value of consulting and advising services);
• Corruption;
• High costs of self-organization and peering activities, both in terms of time and money.
In Ukraine, Russian Federation, Kazakhstan, Kyrgyzstan, ISPs and other professional and business groups, such as programmers, ICT engineers and others set up professional associations and forums at which they have been trying to work out common strategies regarding current development trends in the area of ICT. Their aim is to reach a consensus on technical issues relevant to the development of the Internet and the Information Society, and to contribute to the formulation of national e-strategies and the implementation of national action plans. Nonetheless, it is necessary to underscore that the potential of the private ICT sector to contribute to the development of an Information Society is far from being fully utilized in most countries in transition, although in some countries the situation has been rapidly changing. SMEs in most countries of the region have been lagging behind in the ICT uptake and, therefore, have not been active in pursuing their interests in the area of informatization. Such a situation affects the overall demand for ICT and Internet services in the region and, therefore, results in the loss of market opportunities due to a lower competitiveness of SMEs.
SMEs make up the vast majority of businesses in all the countries of the region. In the EU alone there are 23 million SMEs. They account for 99 per cent of all enterprises and provide 75 million jobs. In some industrial sectors they contribute to up 80 per cent of employment (for example in textiles, construction and furniture).96
Table 32. Major representative business associations, forums and/or business groups in the ICT sector in selected CIS countries
Country Representative business association, forum and lobbying group
Russian Federation
- GSM Association
- Association of Telephone Operators - Cable Television of Association; - Electronic Data Interchange Association - The Union of Internet Operators - AFK Systema
- Alfa-Group/Altima - Telecominvest
Ukraine
- Ukrainian Union of Entrepreneurs and Industrialists (USPP)
- Internet Association of Ukraine - Ukrainian Wireless Association Azerbaijan
- Azerbaijan ISP Association (AziSPA)
- annual business forum – dialogue with the President and Government representatives
Belarus - Infopark (an association of IT companies, mainly
software developers) Georgia - Telecommunication League - Broadcasters Association - Cable TV Association - Internet Association Kazakhstan
- National Telecommunications Association
- Consultative Council of the Agency on Informatisation and Communications
- Council of Operators Uzbekistan
- Association of IT Companies and Organizations (2005) - Association of Business Incubators and Technology
Parks in Uzbekistan (ABIT) Tajikistan
- Association of ISPs
Moldova
- Union of Communications Sector of Moldova
- Association of Patronage of Telecommunications and Informatics (APOTIM)
- Association of Private Operators
Armenia - Union of Information Technology Enterprises
- Government IT Development Supporting Council
Source: Various publications and Internet sources.
There are a number of factors that hold back the ICT uptake by SMEs in the UNECE region:
• Lack of ICT awareness;
• Lack of financial resources;
• Lack of ICT skills and digital literacy;
• High costs of ICT services.
Business groups with significant lobbying power
In many countries of the region specific programmes aiming to accelerate the ICT uptake by SMEs have recently been put in place. In Russia, for example, such programmes have been launched by various stakeholders at the local level. For example, St. Petersburg Foundation for SME Development provides ICT training within four modules:97
(1) “Using ICT for increasing effectiveness of SMEs”; (2) “Information technologies in business”;
(3) “Introductory training course on e-commerce”; (4) “Keys to online trade information”.
A great number of programmes (both at the national and region-wide levels), whose specific purpose is to enable SME acquisition of ICT capabilities and capacities exist in the EU region. Promoting SME use of ICT involves:
• Improving technical and management skills (Digital literacy initiative);
• Making appropriate e-business solutions available for SMEs;
• Addressing the high cost of ownership of ICT equipment;
• Tackling security and privacy issues (Privacy Enhancing Technologies initiative);
• Making available SME-specific information on e-business (e-Business Support Network for SMEs initiative);
• Promoting e-Government: reducing administrative overheads and creating an incentive to engage in e-business (e-Government).