The Information Society: The Information Society: Measuring the SMEs and Measuring the SMEs and

the Digital Dividethe Digital DivideFabiola RiccardiniFabiola Riccardini

National Statistical Institute of ItalyNational Statistical Institute of Italy

fariccar@istat.itfariccar@istat.it

UNCTAD Expert Meeting - Measuring Electronic UNCTAD Expert Meeting - Measuring Electronic Commerce – Geneva September 2003Commerce – Geneva September 2003

Points of presentationPoints of presentation

Policy needs Policy needs Definition, European/OECD and Definition, European/OECD and

Italian Approach to Information Italian Approach to Information Society Society

Measuring the SMEsMeasuring the SMEs Measuring the Digital Divide: why, Measuring the Digital Divide: why,

what what National measurement: ItalyNational measurement: Italy ConclusionsConclusions

Policy needsPolicy needs Policies for business, households and government in using Policies for business, households and government in using

ICTsICTs SMEs and very small enterprisesSMEs and very small enterprises Economic Sectors policy Economic Sectors policy Infrastructure, in particular broadbandInfrastructure, in particular broadband E-governmentE-government E-contentE-content Territorial development policyTerritorial development policy

Agreements-protocols between the National Statistical Office Agreements-protocols between the National Statistical Office with Ministry of Innovation and Ministry of Economy and with Ministry of Innovation and Ministry of Economy and under definition with Ministry of Production Activities for under definition with Ministry of Production Activities for building up data bases on information society for building up data bases on information society for monitoring policiesmonitoring policies

Defining Information SocietyDefining Information Society

OECD: information economy + social OECD: information economy + social aspects = information societyaspects = information society

European Definition: information European Definition: information society is connected to ICT, society is connected to ICT, knowledge society, innovation and knowledge society, innovation and R&D, social aspects (education, R&D, social aspects (education, labour market, health…) and labour market, health…) and globalization globalization

Italian Approach to Information Italian Approach to Information Society: what and how to measureSociety: what and how to measure

Indicators onIndicators on::

ICT usageICT usage ICT sectorICT sector AudiovisualsAudiovisuals E-commerceE-commerce E-businessE-business Households/individuals statisticsHouseholds/individuals statistics e-public sector and e-government statisticse-public sector and e-government statistics Micro and macro analysisMicro and macro analysis Digital divide Digital divide Qualitative and quantitative analysisQualitative and quantitative analysis

SourcesSources:: Most of the indicators derived from official statistics: integrated Most of the indicators derived from official statistics: integrated

databases, surveys and administrative sourcesdatabases, surveys and administrative sources Existing surveys: Existing surveys: New surveysNew surveys

Surveying the SMEs: Why Surveying the SMEs: Why :: SMEs (1-250 empld) in Europe are 80 % of the SMEs (1-250 empld) in Europe are 80 % of the

total business sector enterprises in 2000. In total business sector enterprises in 2000. In Italy SMEs are 99 % of the total business Italy SMEs are 99 % of the total business sector enterprises (graph). Micro enterprises sector enterprises (graph). Micro enterprises (1-9 empld) are 90% (1-9 empld) are 90%

SMEs purchase more than sell over the netSMEs purchase more than sell over the net SMEs in networking along the same product SMEs in networking along the same product

value chain or have same scope economiesvalue chain or have same scope economies SMEs as specialized intermediaries in e-SMEs as specialized intermediaries in e-

commerce, ISP, telecommunication servicescommerce, ISP, telecommunication services ……....

Surveying SMEs in Italy using SBS Surveying SMEs in Italy using SBS Regulation frameworkRegulation framework

Description of the survey and Description of the survey and questionnairequestionnaire

ResultsResults AnalysisAnalysis

Description of the SME survey (2000 year)Description of the SME survey (2000 year) Name of sourceName of source

Sample survey on small and medium enterprises for enterprises with 1-99 persons employed.Sample survey on small and medium enterprises for enterprises with 1-99 persons employed. Legal basisLegal basis

The survey is enforced by the National Statistical Program included in Decree 322/89.The survey is enforced by the National Statistical Program included in Decree 322/89. Obligation on units to provide dataObligation on units to provide data

Decree 322/89 establishes that all public bodies and organisations, as well as private organisations 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 and individuals, are under obligation to provide, upon request, all data and information needed and programmed by law. programmed by law.

Register on which the source is basedRegister on which the source is basedA.S.I.A. register (Archivio Statistico delle Imprese Attive)A.S.I.A. register (Archivio Statistico delle Imprese Attive) is is used. used. It is a statistical Business Register It is a statistical Business Register resulting from the logical and physical combination of data resident in statistical and administrative 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 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 Commerce, Social Security Register, Work Accident Insurance Register, Register of the Electric Power Board) treated with statistical methodologies.Power Board) treated with statistical methodologies.

Population coveragePopulation coverageActivities coveredActivities covered

The survey covers the following economic activities according to the Nace rev.1: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).Sections C, D, E, F, G, H, I, J (division 67), K, M, N and O (divisions 90, 92 and 93).

Geographical area coveredGeographical area coveredThe survey covers all of Italy, i.e. 21 administrative regions.The survey covers all of Italy, i.e. 21 administrative regions.

Size class coveredSize class coveredThe survey covers enterprises with 1-99 persons employed.The survey covers enterprises with 1-99 persons employed.

Description of the SME survey (2000 year)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)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 usageModule on ICT usageSECTION. 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 surveySome results from the SME surveyICT 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 surveySome 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 surveySome 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 surveySome results from the SME survey and ICT usage on business survey

Sector of activity Employment class 2001 2002 2001 2002

MANUFACTURING1-9 46,7 52,6 20,7 22,010-49 73,1 77,5 36,0 47,550-99 93,2 94,2 62,8 75,2100-249 95,5 97,3 65,5 79,5250 and more 98,5 99,0 69,0 83,4Total 54,3 59,2 25,7 29,1

SERVICES 1-9 48,1 53,3 16,1 17,210-49 75,3 78,5 35,5 46,750-99 86,4 87,0 49,9 61,6100-249 89,0 90,8 51,3 66,8250 and more 95,8 95,6 61,7 73,0Total 49,4 54,5 17,0 18,6

TOTAL1-9 47,9 53,2 16,8 18,010-49 74,0 77,9 35,8 47,250-99 90,7 91,5 58,1 70,1100-249 93,1 94,9 60,3 74,8250 and more 97,4 97,6 66,0 79,0Total 50,4 55,4 18,7 20,7

Table - E-mail usage and presence on Internet of enterprises with PC by sector and by employment class - Years 2001-2002

Enterprises with e-mail Enterprises with Web site

Some results from the SME survey and ICT usage surveySome results from the SME survey and ICT usage survey

Sector of activity

Employment class 2001 2002 2001 2002

MANUFACTURING1-9 2,4 2,7 1,5 2,310 and more 8,9 6,4 2,3 4,0Total 3,5 3,3 1,6 2,6

SERVICES 1-9 3,3 3,8 1,5 2,210 and more 14,6 10,0 5,7 5,7Total 3,6 3,9 1,6 2,3

TOTAL1-9 3,2 3,6 1,5 2,210 and more 11,3 7,9 3,7 4,7Total 3,6 3,8 1,6 2,3

Source: Istat

Table - Enterprises with e-commerce - Years 2001-2002

Enterprises with e-purchases Enterprises with e-sales

Micro analysis: ICT usage and business performance. Micro analysis: ICT usage and business performance. Some resultsSome 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 Advantages in using SBS Regulation frameworkRegulation 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 divideAnalysis 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:The main framework for developing digital divide indicators is organized as follows:• Digital divide definition;Digital divide definition;• International measurement;International measurement;• National measurementNational measurement• On who: households, enterprises, governmentsOn who: households, enterprises, governments• MeasuresMeasures

Why we need this ?:Why we need this ?:International harmonizationInternational harmonizationNational measurement with same methodsNational measurement with same methods

International measurementInternational measurement

main current ICT international variables:main current ICT international variables:

Infrastructure readiness, that is:Infrastructure readiness, that is:• Fixed teledensity;Fixed teledensity;• Mobile teledensity;Mobile teledensity;• Personal computer density;Personal computer density;• Internet host density;Internet host density;• Secure servers density.Secure servers density.

Socio-economic enablers to use:Socio-economic enablers to use:• Internet access cost;Internet access cost;• Levels of education;Levels of education;• Computer or digital literacy;Computer or digital literacy;• ICT penetration: computer and other ICT technologies diffusion ICT penetration: computer and other ICT technologies diffusion

on households, business and government;on households, business and government;• Intensity indicators: how much electronic commerce, which Intensity indicators: how much electronic commerce, which

sectors, size classes or local areas sectors, size classes or local areas

National measurementNational measurement

Variables:Variables: Access issue: individuals, households, rural and Access issue: individuals, households, rural and

urban areas, ICT skills, age, gender, etc.;urban areas, ICT skills, age, gender, etc.;

Business issue: use of ICTs in the firms, company Business issue: use of ICTs in the firms, company size and structure, public/private, sectors, ICT size and structure, public/private, sectors, ICT skills shortage, local areas etc;skills shortage, local areas etc;

Government issue: e-government, ICT usage by Government issue: e-government, ICT usage by public employees, on line public services, ICT public employees, on line public services, ICT equipment in the public administration, etc.equipment in the public administration, etc.

National Measurement: ItalyNational Measurement: Italy Households and individuals digital divideHouseholds and individuals digital divide

Table 2: Telephone lines per 100 households by geographical distribution, year 1999

Table 3: Telephone lines per 100 households by urbanisation level, year 1999

Geographical distribution 1999 urbanisation level 1999

North – West 90,2 metropolitan area 90,4 North – East 91,8 suburbs 88,8

Centre 90,3 less than 2000 inhabitants 84,7 South 83,3 2.001-10.000 87,9 Islands 80,1 10.001-50.000 86,4 Total 87,9 50.001 and more 88,0

Source: Istat. Total 87,9 Divide index 5,3 Source: Istat.

Divide index 2,1

National Measurement: ItalyNational Measurement: Italy

Business digital divide: concentration ratio,Business digital divide: concentration ratio,

2000 year.2000 year.

Sector Divide

Size Divide

Territor. Divide

Natio. Mean Diff.

Extranet 41,0 10,4 3,9 5,7EDI 47,4 10,7 2,9 7,6Broadband connect. 44,9 11,3 2,3 3,1on-line sales 43,3 11,7 0,6 3,6

National Measurement: Business National Measurement: Business digital divide digital divide

Results:Results: Index higher on sectors compared with size class and macro Index higher on sectors compared with size class and macro

territorial areas…. Much divide among enterprises across territorial areas…. Much divide among enterprises across sectors instead of size and location of enterprisessectors instead of size and location of enterprises

High divide across sectors …. Could be a sign of low possibility High divide across sectors …. Could be a sign of low possibility to enlarge relationships of enterprises already late with respect to enlarge relationships of enterprises already late with respect to othersto others

Do the use of ICTs leaves to the location of enterprises not Do the use of ICTs leaves to the location of enterprises not discriminatory any more? What is it happening to the industrial discriminatory any more? What is it happening to the industrial districts?districts?

We need much more detailed data for understanding better We need much more detailed data for understanding better the role of ICTs as a possibility to enlarge the relationships the role of ICTs as a possibility to enlarge the relationships among enterprises among enterprises

ConclusionConclusion Measurement of SMEs, in all their size classes even micro enterprises, is Measurement of SMEs, in all their size classes even micro enterprises, is

essential for understanding the different usage of ICT by business essential for understanding the different usage of ICT by business

DD proposed could have different applications for cross countries DD proposed could have different applications for cross countries comparisons and for national analysis. The Gini index is useful for comparisons and for national analysis. The Gini index is useful for estimating the evolutive, regressive or stationary tendency of DD over estimating the evolutive, regressive or stationary tendency of DD over time. The index shows the disparity in accessing and using the ICTstime. The index shows the disparity in accessing and using the ICTs

Select relevant and appropriate variables to measure DD. Many criteria Select relevant and appropriate variables to measure DD. Many criteria and measures can be used. Data availability and comparability of the and measures can be used. Data availability and comparability of the series. Individuals/households, business, governments and other social series. Individuals/households, business, governments and other social or institutional groupsor institutional groups

International measurement of DD ……. OECD publications and further International measurement of DD ……. OECD publications and further activitiesactivities

National measurement of SMEs and DD ……ISTAT publications and National measurement of SMEs and DD ……ISTAT publications and paperspapers

We need much more official statistics over time, much more co-We need much more official statistics over time, much more co-operation for a common analysis, quality of data operation for a common analysis, quality of data