Small ebig Countries: How are They Preparing for etransformation The Slovene Contribution
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1 16 th Bled ecommerce Conference etransformation Bled, Slovenia, June 9-11, 2003 Small ebig Countries: How are They Preparing for etransformation The Slovene Contribution Franc Bračun Executive Director & Senior Lecturer Branch Network, Abanka Vipa & Faculty of Organizational Sciences, University of Maribor, Slovenia Jože Gričar Professor & Director ecommerce Center, Faculty of Organizational Sciences, University of Maribor, Slovenia Milan Jelovčan Member of the Management Board & Director of Development of Operations, IT, and Organization Merkur - Trade and Services, Slovenia Milan.Jelovcan@Merkur.si Marin Silič Director Government Center for Informatics, Republic of Slovenia Marin.Silic@gov.si Abstract Paper presents how Slovenia as a country is positioning itself as an ebusiness area turning into information society. The reasons for relatively fast ecommerce development are discussed and how authors see the future of etransformation developing in Slovenia in next years is presented. 1. ebig Slovenia Slovenia, an independent country since 1991, is located in heart of Europe, south of Austria, east of Italy, west of Hungary and Croatia. Slovenia is placed in the lower third among the western European countries in terms of IT development but has the best IT infrastructure in Eastern Europe. It may be considered a country with a good potential for the eeconomy and etransformation. Mobile penetration (over 70%) is equal or higher to some Western European countries. Full replacement of analog networks with digital 50
2 Small ebig Countries: How are They Preparing for etransformation: The Slovene Contribution switches and fiber optic cables was reached by the end of Relatively low price of telephone access allowed Internet to spread quickly in the country. The Internet penetration in Slovenian households is 38%, mainly with the analogue modem (63%), followed by ISDN (21%), cable access (11%) and ADSL (4%). Almost 45% of population (>15 years) are Internet users. The Internet penetration in Slovene enterprises in all categories is above 90% (Project RIS). Schools of all levels have PC labs with Internet access. In secondary schools there are 3.7 PCs per 100 pupils, 3.5 PCs per 100 pupils in primary schools. Informatics is a required course in all programs of higher education which is another priority in Slovenia. The Internet penetration in educational institutions is 75% (Project RIS). Even though there is a lack of IT specialists and sufficient educational material on the net, according to the Bologna Declaration, distance learning in Slovenia, is expected to expedite development of the country. Projects aimed at development of the technologysupported distance education have been started ( The Academic and Research Network of Slovenia - ARNES was founded in 1992 by the government for facilitating education and research over Internet ( For Slovenia, with a population of 2 million, logistics and transportation are very important due to its site as a transportation hub. The use of IT is a necessity for the provision of efficient services handling commerce going from Western Europe (Lisbon, Milano) to the East (Ukraine & Russia and Greece & the Middle East), and from the North (Austria, Czech Republic, Slovakia, Hungary) over European Corridors 5 and 10. To logistics flows in Slovenia, the North Adriatic ports Koper, Rijeka, Trieste, and Venice are very relevant. Ljubljana, the capital of Slovenia is west of Vienna and north of Rome. In banking industry, a centralized funds transfer systems was provided by a government agency which has arranged for business-to-business payments over Internet among the first in Europe. Payment system has moved to commercial banks afterward, building upon the Internet based system already in place at an accelerated mode. In customs administration, EDI based system was implemented few years after country's independence in Both, banking and customs system gave a major signal on how ecommerce can be handled over Internet safely and efficiently. Legal arrangements for ecommerce are considered a priority. In order to create discussion in professional circles, the Government Center of Informatics issued a working document, Electronic Commerce and Electronic Signature Law, in November The Act was accepted by the parliament in June of 2000 (Electronic). An annual ecommerce Conference has been held in Bled since It had started with a name»edi Conference«, expanded into»edi & Inter-organizational Systems Conference«and ended as an»ecommerce Conference«in early nineties. The Bled ecommerce Conference ( had a significant impact on directions and speed of ecommerce implementation in the country (McCubbrey and Gricar 1995, Vogel and Gricar 1998). A logo of the conference is a four-leaved clover with the names of ecommerce s stakeholders: industry, government, technology, and university. 2. Factors Supporting ecommerce Development in Slovenia Slovenia has a strong educational commitment at all levels. Public school students are well trained and highly motivated. Students go to compulsory primary school from age 6 51
3 Franc Bračun, Jože Gričar, Milan Jelovčan, Marin Silič or 7 until age 15. Besides studying the predictable subjects, they also study English beginning in the fifth year, and another language, usually French or German, a couple of years later. When these students go on to high school, they have already studied English for 4 years, and their level of communication is rather high. Universities are well attended (over students) with strong curriculums and well developed faculties in information and computer sciences (seven departments at two universities. Slovenia has embraced ecommerce in a variety of collaborative internal and external fashions to assist the building process. Academics, the government, and private industry are working together. The objective is recognition of Slovenia by the rest of the world as being internationally competitive. 3. Most Visible ecommerce Success Stories in Slovenia Implementation of business-to-business and business-to-customer payments over Internet, connecting banks to companies and citizens. The Customs Administration receiving close to 98% Universal Customs Documents electronically. The Health Insurance Institute of Slovenia, the central health insurance provider, receiving majority of invoices issued by health service providers (doctors and hospitals) electronically. A smart card carrying patients administrative data implemented to all citizens. Traffic Police issuing e-report on an automobile accidents to the Insurance Association as a distributor to insurance companies involved. Electronic Commerce and Electronic Signature Act implemented. esignature Certificate. esession of the Government meeting. XML-based esigned einvoice (prototype) developed by the organizations in eslog Project, sponsored by the Chamber of Commerce and Industry of Slovenia. As demonstrated in Slovenia, there are several important players that can work together very successfully in ecommerce development in a country: Business executives, who understand the growing importance of the use of information technology in the competitive environment. Government officials, who have a vision of ecommerce based government services to citizens and taxpayers exploiting the power of technology in a noncompetitive environment. Technology providers, who are proactive and have a long-term and global business focus. University researchers, educators, and students who can take a leadership role in organizing and encouraging the development of an ecommerce capability by bringing together the various disparate entities necessary to the process: business, government, technology, and university. 52
4 Small ebig Countries: How are They Preparing for etransformation: The Slovene Contribution 4. The Unanticipated Surprises Slovenia is rather well off comparing to other countries preparing to formally join the European Union on May 1, 2004 (GDP per capita USD 10,000, growth in GDP 2,9%, Inflation 7,2%, unemployment 6,6%, export EUR 13.5 billion to EU 60%, import EUR 13,2 billion from EU 68%). However, it has to be considered that in the countries of Eastern block competitive forces were not in place as they were in the rest of Europe. Higher level of pressure to go digital was experienced by those companies being exposed to severe international competition only. So far, many organizations have not been forced to implement information technology as a mechanism of increasing competitiveness. Another issue is Small and Medium size Enterprises SMEs. They have not enjoyed broader governmental support to prepare for ecommerce. It was expected that they will grab the opportunities offered by ecommerce technology, however were mostly reluctant and waiting. The research had shown that they expected to be pushed by major customers, or encouraged by simple and low cost solutions. It was assumed that the basic information technology is already in place and that starting the first steps in doing business electronically requires no major investment in new technologies. However, an even bigger issue is the lack of basic business concepts rather than the unavailability of the latest technology. Modest, successful solutions that are easy to understand and use, like prototypes and pilot programs proved to be essential to start the process of ecommerce implementation. Convenient and inexpensive Internet access is a part of that. In Slovenia, as a small country with numerous ties across borders, problems were emerging in cross-border goods & data flow. The problems in organizations analyzed were: too slow, too complicated, and e-transactions not trusted (Bračun and Gričar 2001). To some it seems however that not much can be done about it since over there is another country with different laws and regulations, documentation, habits and culture, language. 5. The Goals for Accelerated ecommerce Development in Slovenia in Next 2-3 Years Slovenia is anxious about being ready for etransformation in the region and to position itself as a reliable partner for doing business electronically. The Single European Electronic Market - SEEM of the 6th Framework Programme, Information Society Technologies seems to be very relevant to Slovenia eager to be a part of the research and development effort in the European Research Area (Single, Adapting). Business & Government Executive Meeting on Cross-border ecommerce Development in the Region may be very relevant. The following countries would be of potentially most urgent focus: Austria, Croatia, Czech Republic, Germany, Hungary, Italy, Macedonia, Serbia & Montenegro, Poland, Slovakia, Slovenia, Turkey. 6. The Expected Obstacles to Accelerated ecommerce Development in Slovenia in Next 2-3 Years Envisioned increased competition of a huge European market may surprise some industries and companies being safe in a protected local market for a long time. Paying too much attention to the established markets in South-East Europe may prove to be a too narrow focus. Lack of vision in some governmental agencies not really facing 53
5 Franc Bračun, Jože Gričar, Milan Jelovčan, Marin Silič competition on a short run, may not contribute to an accelerated development. Lack of cooperation may lead to delays, duplicated efforts, scarce resources. Lack of sharing good business practices and lessons learned will increase overall costs. Research not being connected to real world problems or ignorance of research results by the practitioners will hinder the development. 7. What and How Could Small Countries Do Jointly in Order to Exploit ecommerce for More Successful and to Have More Effective Cross-Border Business in Their Respective Regions? The following directions may be suggested: Intensified cooperation of business, government, and academia. Working together in a regional setting; a region being, for example, a city area, a part of the country, or a market connecting neighboring countries. Prototype (proof of concept) development as a methodology, as a peace of a new technology, or as an operational solution in a pilot (test bed) environment. Working with technology providers in developing simple, easy to use and nonexpensive solutions. Considering e-technologies as services to be purchased as needed. Readiness to open standards. Cooperation in educational programs development for all levels. Exchanging best practices. Formal business, government, and academia meetings with respect to awareness, promotion, research, development, implementation, and use of best etransformation solutions. References Bračun, Franc in Gričar, Jože (editors). Organizational Prototype of Cross Border Business-to-Business and Business-to-Government Electronic Commerce. Kranj: Center of Electronic Commerce, Faculty of Organizational Sciences, University of Maribor, May McCubbrey, Donald J.; Gricar, Joze: The EDI project in Slovenia: a case study and model for developing countries. Information, Technology & People. Bredford, 1995, No. 2; Vogel, Doug & Gricar, Joze: Using Electronic Commerce to Focus a Country: The Case of Slovenia. International Journal of Electronic Commerce, 1998, No. 3; eeurope+. Ministerial Conference. Republic of Slovenia, Ministry of Information Society in co-operation with the European Commission, DG Information Society and DG Enlargement. Ljubljana, June 3-4, rogress_report.pdf 54
6 Small ebig Countries: How are They Preparing for etransformation: The Slovene Contribution Project RIS. Facts on ICT in Slovenia. Center for Methodology and Informatics at the Faculty of Social Sciences, University of Ljubljana, Slovenia, The Strategy of ecommerce in Public Administration of the Republic of Slovenia. Government Center for Informatics, Republic of Slovenia egovernment of the Republic of Slovenia Electronic Commerce and Electronic Signature Act (Official Gazette of the Republic of Slovenia, No. 57/2000) English.pdf Single European Electronic Market - SEEM, Information Society Technologies IST, index.htm Adapting e-business policies in a changing environment: The lessons of the Go Digital initiative and the challenges ahead), 55
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