The acceding and candidate countries, in particular those in Central and
Eastern Europe, have during the last decade undergone a set of three radical
transformations: the shift to a market economy, integration into the European
Union – the so-called Enlargement Process - and finally, a move towards
the Information Society, today enshrined in the different initiatives
of the eEurope Action Plans.
These three transformations aim, at various levels, at the emergence of
an enlarged European knowledge society as referred to in the March 2000
declaration of the Lisbon Council. In doing so, they challenge the economy,
institutional and political structures, constitutional and legal frameworks,
and working conditions in the countries in question.
The question of what the Information Society means for countries entering
the European Union from next year onwards is a fascinating and complex
one. Fascinating, because it opens up a real window of opportunity for
these countries to leapfrog technical, economic and social divides, thereby
enabling them to meet the Lisbon objectives by 2010. Complex, because
building the Information Society is only one of many priorities these
countries have today and because there is no single recipe for achieving
it. The research carried out into these issues at IPTS and reported herein
has attempted to break down this complex picture into the following straightforward
Have we learnt anything from the experience of the EU-15 Member States
that is transferable to the CC-13? Does industrial development of the
ICT sector constitute a major opportunity for the acceding and candidate
à Have we learnt anything from the experience
of the EU-15 Member States that is transferable to the CC-13? Does industrial
development of the ICT sector constitute a major opportunity for the acceding
and candidate countries?
à How best can use be made of the benchmarking
efforts of the eEurope+ Action Plan? To what extent do these tools fit
methodologically into the context and the issues to be analysed in acceding
and candidate countries? How can an Enlarged Europe benefit from "bench-learning"
à Are there specific technological prospects
in the CC-13 which can be seen as offering leap-frogging opportunities?
For example, is the growth rate of GSM penetration rates a favourable
signal for rapid development into next generation mobile services?
à If aiming clearly at economic growth,
what could be the targets of future Information Society strategies? Is
the ICT sector the principal engine of growth? Do services deliver growth,
as expected from a knowledge-based society? Have economists developed
the relevant tools to answer such questions?
à If taking an ICT-intensive service such
as banking, how does it perform – when considering its e-services - in
acceding and candidate countries? Do such e-service oriented developments
meet challenges and obstacles that are specific to these countries?
This special issue of the IPTS report offers partial answers to these
questions and I hope it will contribute to a better understanding of the
issues at stake in the acceding and candidate countries. By doing so it
may help European, national and regional decision-makers, from both public
and private organizations involved in the Information Society field, to
better coordinate their activities.
ICTs, the Lisbon Strategy and EU Enlargement
by Bernard Clements, Jean-Claude Burgelman and Marc Bogdanowicz, IPTS
Research and policy-making in ICTs has from the early ‘80s suffered from
a problem of context and emphasis – whether to regard it as a vertical
sector to be developed for reasons of industrial policy and competitiveness
in its own right, or as Dr. Cenys’ asks in his preface, whether it should
be seen as the principal engine of growth, and thus given a wider role
in economic policy.
It is doubtful that this poses a real dilemma; a vibrant and healthy ICT
sector is in any event a prerequisite for its successful application to
other fields. But if emphasis on developing the sector was a feature of
early research and market policies, that emphasis has now clearly given
way to a perception of ICTs as an area capable of transforming a wide
range of economic and social activity. This is borne out by the role given
to it in the Lisbon strategy, and expressed in practical terms in the
eEurope action plans.
The Lisbon process launched a decade-long strategy of economic, social
and environmental renewal, with the aim of transforming Europe into a
competitive and dynamic knowledge-based economy by 2010. The process is
a formal one, in which progress towards the Lisbon goals is measured through
a wide range of structural indicators for the Member States, assessed
by periodic reviews held at each year’s Spring Council meeting.
The latest review revealed short-comings in several areas, including employment,
productivity and sustainable development, and listed the important challenges
for enlargement.1 Although most candidate countries had experienced rapid
growth over the last five years, their economies were clearly at different
stages of development, with agriculture still a major source of employment.
Moreover, the disparities between candidate countries in a number of key
areas of the economy were exacerbated by the continuing differences between
these countries and EU-15 Member States.
Taking the wider view of the transformational role of ICTs in the economy,
the key question addressed in this special issue is what Information Society
strategy the acceding and candidate countries can follow, given their
overall social, political and economic situation.
The general picture emerging is that the candidate countries are able:
à to maintain high economic growth rates,
so long as the industries and services developed are in growth intensive
areas and exploit the synergies and network effects of global markets.
Contrary to the example of some EU-15 success stories, it would not appear
to be in the interests of candidate countries to rely on ICT manufacturing
to support growth, rather they should seek to develop other sectors;
à to catch up in technological terms, but
not necessarily by taking advantage of technological leapfrogging opportunities
– such as with say third generation mobile networks – this is not so straightforward;
à to match or even challenge western standards
in the area of technological education, bearing in mind that the transition
to market economies has temporarily weakened the economics of the educational
system (with a consequent need for strengthening it during the coming
decade), and that the continuing high demand for ICTs might reveal skills
shortages in certain sectors such as public administration, SMEs, etc.
à to develop numerous content-related initiatives
in media, e-business and e-government, but recognizing the particular
context and challenges that will make this a more difficult exercise than
in the case of the EU-15 countries;
à to attract existing global companies,
in particular those in the ICT sector, but with attendant risk of their
plants relocating to other trade blocks, ironically in the face of increasing
economic growth in candidate countries.
As a result, a simple scenario for the way forward, a single and common
Information Society strategy for the candidate countries, appears an unlikely
outcome. The recipe which made an economic success of certain regions
and countries in EU-15 seems almost impossible to repeat in the candidate
First and probably most important, candidate countries already
confront difficult choices, expressed in one paper as that between "bread
or broadband". Only even-handed trajectories that will offer a compromise
between these two poles, and feed simultaneously into overall welfare
issues and economic growth will be politically sustainable. Technology
is perceived as unaffordable, unless it can be demonstrated to be a clear
tool for the country’s well-being. The strong disparities that accompany
the enlargement process at the European level, and the potential complex
digital divide that may derive from these disparities are illustrations
of this dilemma. Moreover, many countries may need institutional and managerial
strengthening rather than plain infrastructure or technological upgrading.
The question is therefore how best to put the Information Society policy
strategies at the service of a country’s democratic and social development,
while optimizing its resources and economic output.
Second, while the example of west European countries could be seen
as showing the way forward, the simple emulation of those "best practices"
is seen as decreasingly relevant for candidate countries. In particular,
Information Society developments should not be seen exclusively as targeted
industrial developments around the ICT sector itself. While this has been
a possible trajectory for so-called "Tiger" countries of the EU-15 during
the last decade, today’s economic conditions – the burst of the speculative
bubble around the new economy, and the overall downturn of the global
economy – do not seem to favour such scenarios any longer. In the realm
of a strongly competitive and global industry, it is obvious that not
everybody can play a major role. Moreover, current market developments
are bringing uncertainties to the future of the ICT industry, even in
EU-15 countries or regions. "Benchlearning" from EU-15 successes
and failures is making the best possible use, not only of the accumulated
European knowledge base, but also of Asian, US and developing countries’
Third, ICTs are tools for the modernization of the economy, and
for the building of an equitable, democratic and sustainable society.
Just as in most advanced economies, growth in the enlargement countries
is expected to come from productivity gains in ICT user-intensive sectors
– at present these being expected to be mainly in retail and wholesale,
banking and insurance, etc. – rather than from the ICT industry itself.
Expenditure on a technological roll-out per se, in particular when supported
by public subsidies or incentives, should be carefully monitored for its
The development of an ICT sector can nevertheless be supported by industrial
and technology policies, if these are adapted to domestic needs and assets,
aimed at the improvement of overall productivity and service quality,
and take into account the global competitive context. Under such conditions,
these developments may become with time exportable items. Possible trajectories
therefore include developing value-added services and targeted high-tech
goods (rather than being a low-cost player in ICT "commodities"), and
turning the goals of the Acquis into a leveraging tool for domestic R&D,
production and procurement. In such a perspective, FDI, R&D and public
expenditures, and any other public support for the presence of an ICT
industry in each candidate country, could help feed a longer-term perspective,
rooted in effective needs and markets rather than favouring a domestic,
but highly autonomous ICT manufacturing sector.
Fourth, the enlargement process carries with it the possible financial
and political burden of its implementation. Compliance with the Acquis
Communautaire offers the virtues of effective harmonization, levelling
the playing field for the market economy to prosper. For ICTs, it offers
the additional advantage of regulatory certainty and technological neutrality.
Nevertheless, it also raises important economic challenges, such as those
related to the effective implementation of Universal Service Obligations,
that might distract from other priorities and could undermine future decisions.
Maximizing the chances of converting the Acquis compliance into
opportunities might be the most fertile approach.
Fifth, in line with the need to consider ICTs as tools rather than
objectives in Information Society strategies in enlargement countries,
complementary approaches need to be taken to move from the development
and deployment of ICT infrastructures into the broader development of
enabling contexts for users. These should be targeted at having citizens
make full use of ICTs as tools for a better quality of life and access
to more competitive products and services. Socio-economic aspects need
to be addressed, such as trust in the institutions and trust in the technology,
better managerial capacities, a legal framework for consumer protection,
security and privacy concerns.
Sixth, Information Society strategies are expected to be geared
to societal and developmental needs. A vision statement, as well as its
translation into goals and means, needs to be rooted in a context-related
analysis of the conditions (strengths and weaknesses) of a country or
a region. These conditions and needs will be differentiated among candidate
countries and from the EU-15, even when framed by the rules of the Single
Market, the Acquis Communautaire or present EU policies.
An Industrial policy on ICT – even if focused on Services rather than
strictly on Manufacturing – is necessary, but as a proportional means
for complementing a broader strategy encompassing targets such as the
general modernization of the existing economy, or that of Education, Social
Welfare or Governance. Under this perspective, it seems necessary to co-ordinate
and ensure consistency between ICT policy strategies and education, employment,
or administration policy strategies, at different national and regional
levels, and to co-ordinate those with national development plans. This
rather holistic view is also strongly supported in the recent EC Communication
on Industrial Policy.
Such strategies need to be driven or at least monitored by the users of
ICTs, be they corporate or civil. The necessary innovative institutional
settings allowing for such processes to develop are a core lesson of EU-15
experience: there is a role to play in each specific context for a variety
of actors from national politicians to industrialists, unions or NGOs.
Bottom-up strategies are needed and should be put in place whenever possible.
Finally, following the terms of the Lisbon objectives, there is an essential
issue about integrating Information Society Strategies in the broader
development of a Knowledge-based society, seen as the broad orientation
of Europe’s contemporary development trajectory. In such frame, ICTs are
seen much more as enablers for economic, political, social and intellectual
development, rather than self-sufficient goals.
The studies illustrated in this special issue are therefore part of a
larger picture taking in strands of economic development resulting from
technological change. Along with the Information Society issues described
herein, the IPTS Enlargement Project addresses the agricultural transition
to be made by the acceding and candidate countries and the question of
how sustainability in the areas of energy, waste management and transport
can be achieved when economies are growing. The Project assesses how technological
change in these areas affects overall productivity and competitiveness
under different policy scenarios.
The Enlargement Project is being carried out jointly with scientists and
experts from the countries concerned, and is guided by a Steering Committee
made up of high-level representatives from all ten acceding countries.
The results are to be discussed in a forthcoming conference in Florence
in November 2003, co-organized by the JRC-IPTS and the European University
Institute, and part of the official programme of the Italian Presidency.
The conference will bring together European academic researchers and policy-makers
to debate the issues involved and their implications for future policy.
Information Society Strategies for the Candidate Countries: Lessons
from the EU-15
by Marc Bogdanowicz and Jean-Claude Burgelman, IPTS
Issue: There is an ongoing debate on the appropriate strategies for
the development of Information Society in candidate countries. Obstacles
to the Information Society may be general or specific to a particular
Candidate Country context.
Relevance: Policy-makers today are confronted with hard choices
about Information Society strategies at regional, national and European
levels for Candidate Countries. Large investments have to be made, regulations
have to be implemented and applied, social cohesion has to be preserved.
There may be lessons to be learned from earlier EU-15 MS Information Society
experiences, in particular in industry.
IS developments in Candidate Countries: the current state of affairs
Over the last decade the Candidate Countries (CCs), and in particular
the Central and Eastern European Countries (CEECs) have undergone radical
changes in their economies, their institutional and political settings,
their constitutional and legal frameworks and their social and labour
regulations. These changes show their adaptability and capacity to meet
the challenges of building a knowledge society.
Over the last decade the Candidate Countries (CCs) have undergone changes
in their institutional and political settings, their constitutional and
legal frameworks and their social and labour regulations
The CCs have indeed been able, with the help of considerable foreign investment
and proactive policies, to attract and integrate many of the top global
companies in the ICT industry. They have also reinforced or created new
competitive niches for their domestic industries, mainly in software and
content services. Nevertheless, bearing in mind the global and cyclical
nature of these industries, these achievements should be assessed with
caution and relevant strategies to support sound economic development
should be further articulated. Simultaneously, CCs have shown themselves
very capable of developing a wealth of ICT-based services in such diverse
areas as business services or public administration. Though these initiatives
demonstrate an obviously entrepreneurial mindset, they are still too dispersed
and unconsolidated, and lag behind in terms of critical mass and economies
The CCs have been able, with the help of considerable foreign investment
and proactive policies, to attract and integrate most of the top global
companies in the ICT industry
On the demand side, in some areas such as mobile telephony, spectacular
growth rates have allowed the CCs to catch up in technological terms and
to achieve above EU-15 average penetration rates. In some countries (the
Czech Republic, Estonia, Hungary, Slovakia, Slovenia and Turkey) fixed
line penetration has overtaken that of the EU-15. However, as progress
in ICT penetration is correlated to a large extent with the level of economic
development, the investment capacity and the purchasing power of the population,
countries with low per capita GDP are not capable of sustaining such a
high rate of penetration growth. On average, the CCs continue to lag behind
EU Member States in most, if not all, measures of ICT access and usage.
Furthermore, the overall economic situation in the CCs – and the resulting
uneven revenue distribution - is widening the gap between the people and
organizations that can access advanced technologies and services and those
for whom they are a luxury.
Close observation of the educational system also shows that CCs at least
match Western European standards in technological education. This is an
asset clearly inherited from the past institutional settings in the educational
area, and current changes – privatization, shifts in the vocational and
on-the-job training system, brain drain, public funding crises, etc. –
may offer opportunities as well as weakening the inherited system.
Such achievements, some of which are very recent, should also be assessed
in the light of the disparities on many levels that can be observed within
the CCs and in a broader Enlarged Europe. With enlargement it is estimated
that the income dispersion between regions in EU-28 will double relative
to that existing in the current EU-15. The impact and complexity of the
digital divide resulting from this fact, added to disparities between
countries in terms of the distribution between their rural and urban populations,
regional situations and demographic trends, is expected to be such that
it could endanger market growth, social cohesion and democratic participation.
In such circumstances, there is a very high risk of developing a complex
digital divide between and within groups of European countries, among
sectors and businesses, generations and cultures, etc. Such a pronounced
divide would weaken the economy, social cohesion and the building of democracy
in the CCs, and would run counter to the European objective of an inclusive
The disparities within the CCs and in the broader Enlarged Europe risk
endangering market growth, social cohesion and democratic participation
Finally, most of the CCs today are new democracies with comparatively
weak economies and are still dealing with the overall challenges of the
transition to market economies, and the implementation of the political
and economic framework required by the European Union. Striking a balance
between two sets of policy objectives - acute societal day-to-day needs
and longer term IS-related development needs - is probably their most
difficult policy challenge.
From this point of view, it is clear that the strategic political choices
made today could have important implications for the CCs’ economies and
à If present development imbalances are
not properly addressed and provisional achievements not consolidated,
the CCs will certainly succeed in creating ICT islands but large disparities
between countries, regions, businesses and populations will remain, both
in the ICT domain and others. CCs run the risk of not reaping the political,
social and economic benefits of their societies’ transformation. Economically
speaking, these countries may even become isolated in the role of low
wage/low quality countries constrained to lower added-value production
and consumption patterns.
The strategic political choices made today could have important implications
for the CCs’ economies and societies
à If the CCs wish to achieve a more balanced
development of the Information Society and strengthen their position,
a strong policy commitment (policy push) is needed which clearly focuses
on meeting the Lisbon competitiveness, social cohesion and sustainability
targets and has sufficient financial support. In times of limited public
resources, striking the balance between competitive objectives and targeting
the major relevant factors for cohesion and sustainable development could
become the outline of a "Marshall plan" for the Information Society in
the CCs. Only a multi-layered policy push of this kind will ensure that
the CCs build up their own socially inclusive and competitive Information
What lessons can be learned from past experiences in EU-15? How can this
knowledge be applied to the particular circumstances of the CCs when setting
up an appropriate policy agenda?
The last decade of ICT-related development in EU-15 Member States provides
examples of national successes and failures
Lessons from ICT-related EU-15 experiences
The last decade of ICT-related development in EU-15 Member States provides
examples of national successes and failures, set against the particular
economic, industrial, historical, social and geographical context of the
country or region concerned. It is thus worth looking at how particular
initiatives in given EU-15 national/regional contexts have created favourable
conditions for achieving ICT-related regional and national development
and what this has meant in each case.
The analysis of various cases across Europe identified the following seven
factors which, taken together, help us understand the dynamics that have
led to more or less successful ICT-related development in EU-15 MS since
the mid 90s.
Box 1. Seven factors leading to successful ICT-related developments
Committed and adaptive public policy
From ICT Manufacturing industry to the adaptive use of the industrial
Diversity/Uncertainty: the role of adapted financing tools
Education, info-culture, awareness: the intangible facet
Creative use of specific contexts: alliances by position, language, identity
A strong recurrent element in the case studies that illustrate the development
of IS trajectories in the EU-15 is that they generally did not develop
spontaneously or in a socially inclusive way. They were all strongly supported
by an adaptable, committed and pro-active public policy. This policy was
also often cross-departmental, and aimed at the overall development of
the country rather than being focused strictly on ICTs. In the case studies,
IS policies were absorbed into the broader category of development policies
covering a variety of domains such as economic development, industry policy,
science and technology, employment, regional policy, innovation policy,
social policy, education, media, etc.
A strong recurrent element in the case studies on the creation of ICT-related
development in the EU-15 is that they did not develop spontaneously or
in a socially inclusive way
A specific role for the public authorities concerns the co-ordination
of a diversity of actors at various levels - the creative design and management
of co-opetition schemes - and the arbitration of ethical/political considerations
about public interest and democratic representation. Co-opetition refers
to the search for the right and creative mix of co-operation and competition,
through, for example, bringing together diverse – possibly competing -
actors in a coordinated way in a goal-focused and time-determined taskforce.
This mix aims at creating mutually beneficial situations providing diversity,
and at generating synergies that may help to create common goals and trajectories
for all. The concept calls for innovative institutional arrangements in
public-policy management, which include the delegation of decision making
and implementation capacity, and a citizen/entrepreneur-oriented mindset.
It promotes the idea that reciprocal responsibilities pay better than
a "winner takes all" approach. Coordinating co-opetition involves meeting
the challenge of difficult ‘policy learning’, in particular because the
environment for policy-makers and partner-actors becomes highly complex
In most cases EU policies have supported national initiatives as much
with mandatory regulation frameworks as with awareness raising, direct
subsidies or benchmarking initiatives
EU policies can play a powerful role in framing these political conditions.
In most cases they have supported national initiatives as much with mandatory
regulation frameworks as with awareness raising, direct subsidies or benchmarking
initiatives. However, EU policies can have the opposite effect. The focus
on EMU and the stability pact, and on the overall enlargement process
and its conditions, may have distracted some governments from other priorities
or legitimized less open cooperative schemes.
As well as the right political conditions, IS initiatives need financial
support that offers a variety of tools adapted to the diversity of initiatives
necessary to explore and develop traditional and new opportunities – with
very different degrees of risk - for business and civic life. Foreign
Direct Investment (FDI) is a major tool, particularly for funding and
developing an ICT (manufacturing) sector, but also for any development
plan. Other essential tools for the promotion of domestic ICT-related
development are venture capital, seed capital, public subsidies and the
protection of revenues through adequate regulation (for example, intellectual
The EU-15 case studies also show that the presence of foreign and indigenous
ICT manufacturing multinationals and/or a dynamic SME-sector that successfully
develops international ICT-related niche-markets (such as software development,
maintenance, services, etc.) have been essential ingredients in some major
IS developments. During the second half of the 1990s several national
economies benefited from the contribution of ICT industries to added value,
GDP and employment. But it is also evident – if not more important – that
national/regional economic structure matters, as much for development
opportunities as for growth. Countries and regions, which have a tradition
in industrial manufacturing, may succeed in modernizing that industry
through ICT use. The adaptive use of ICTs is at the core of these IS strategies.
But other nationally or regionally specific assets – particularly in services
– can help to transform relevant sectors into ICT-intensive ones. Exploring,
creating and exploiting these ‘sweet spots’, which may be either historical
or new, is a complementary strategy which may be more reliable in the
long term than a basic industrial policy that concentrates on ICT manufacturing
During the second half of the 1990s several national economies benefited
from the contribution of ICT industries to added value, GDP and employment
More surprisingly, geographical position or size may allow for a specific
role in geopolitics or international trade. Traditional migration flows
may reveal unexplored networking capacities as well as access to foreign
resources. Language specificity may translate into market access or identity
seeking. The historical background may support sudden attractiveness.
Such features can be embedded in international alliances, in marketing
behaviours and mobilizing visions or in the distribution of managerial
responsibilities. Strategic creativity matters more than the hurdles.
Addressing those specific features that are seemingly hurdles to ICT-related
development at national or regional level has often revealed opportunities
for creating competitive advantages. Not addressing them has turned them
into real weaknesses.
Finally, education – often little acknowledged in excessively short-term
assessments – is always an essential ingredient in successful ICT-related
development. However, it has to be viewed in the longer-term. The generational
upgrading of the population’s educational level is a central ingredient
of development. In the broad realm of education, general literacy levels
and the explicit support to creativity, self-teaching and retraining should
However, other intangible national assets also play a role in fostering
ICT potential. Infoculture, a neologism that indicates the social
habits of a given population and its private and leisure behaviour, seems
also to partly determine the possible scope of successful development.
On the supply side, R&D capacities, fundamental research and curiosity-oriented
research, technology transfer mechanisms, patent regulation, innovation
policies, managerial capacity towards innovation and entrepreneurship,
and simple awareness of change, are all observable intangible assets that
should be explored and valued. The managerial capacity of the decision-makers
and their sensitivity to the issues raised by the IS, are themselves ultimately
an essential facet of a country’s intangible assets.
The managerial capacity of the decision-makers and their sensitivity
to the issues raised by the IS, are themselves ultimately an essential
facet of a country’s intangible assets
It is worth trying to assess how transferable these factors, seen as important
ingredients of EU-15 IS experiences over the last decade, might be to
the CCs today. While an early diagnosis shows that CCs benefit from a
multiplicity of diverse IS initiatives and players of various scales,
they may still lack some of the other necessary ingredients. For example,
a committed and supportive policy focus may be undermined by other essential
targets and budgetary constraints. Co-opetition, i.e. the institutional
creativity that allows the necessary consensus (about targets) and decision
building (about actions to be taken) across a broad range of partners
may also be weakened by the too recent emergence of institutions which
lack the resources – human, legal, budgetary – and the legitimacy to act
as coordinating bodies for creative settings. Additionally, the credible
presence of a wide range of solid financing tools able to support a diversity
of initiatives and players may well be prejudiced by the still recent
take-over of management of capital and subsidies by the private and public
sector. As a result, conditions may not be ripe in most CCs for implementing
EU-15 "best practices" successfully, especially if they need to be followed
Potentials for a CCS ICT industry-led IS development
The EU-15 "Tigers": a model for IS development?
As "European Tigers", Ireland, Finland and Sweden have features in common
and their position contrasts with that of the rest of Europe, and in some
ways with that of the rest of the world. These three countries’ very strong
ICT manufacturing profiles makes them stand out. The financial results
of their ICT sectors have in turn impacted positively on their overall
On the other hand, the long-term sustainability of their winning positions
should be assessed from various points of view:
à They have the advantage of being the "first
come" countries in an important, - even if momentarily stagnating – sector
of the economy. Would-be "followers" have to assess the difficulty of
challenging these positions
à These ‘Tigers’ have developed an industrial capacity in a difficult
sector and are faced with fierce global competition, and technologically-related
à They have developed a possibly vibrant innovation capacity not
only in ICTs, but they would hope also in other branches, reinvesting
their benefits in a new cycle of value creation which makes them less
vulnerable to the potential downturns of the ICT Manufacturing industry.
The so-called "European Tigers" Ireland, Finland and Sweden have developed
strong ICT manufacturing profiles which have boosted their overall national
It is thus quite possible that times have changed for national Information
Society projects relying strongly on the building block of growth in ICT
manufacturing industries. This issue affects the transferability of the
observed factors determining success and failure, into the context of
the CCs and more precisely to the support given to their ICT Manufacturing
Potential CCS "Tigers": repeatable trajectories towards the IS?
The above observations question to what degree "Tigers" scenarios are
possible for some or all of the CCs? Do their ICT industries show signs
of being able to reproduce a "Tiger" renaissance or not?
The "European Tigers" are models that CCs with strong ICT manufacturing
sectors might wish to emulate, although there appear to be some specific
weaknesses which may have a negative effect on their ability to do so
in the medium term
A closer look at the ICT manufacturing industry in those CCs which are
seen as ICT manufacturing champions today - namely Hungary, Poland, the
Czech Republic, Estonia, Turkey – indicates some specific weaknesses which
may have a negative effect on their development in the medium term:
à The development of their ICT manufacturing
capacity is highly dependent on external factors. For example, fluctuating
FDI flows and their relation to incentive policies have a considerable
influence. Foreign firms, whose strategies are designed to deal with an
ultra-competitive environment may also decide that relocation of activity
is the easiest option. Competition from other European and non-European
countries, access to market-based competition for plant and R&D centres,
and strong dependency on overall economic health as export-oriented industries
also have an effect.
à There is an observable shift in production
specialization towards lower-value ICT manufacturing such as Consumer
Electronics (which represent today less than 10% of total world production
value) or even Components. This shift accompanies a general shift towards
assembling activities with low added value and little accompanying knowledge
intensive activity (R&D, for example). This has happened partly as a result
of a focus on competition strategies that are cost-based rather than knowledge-based.
à Those CCs that are seen as ICT manufacturing
champions – with the exception of Hungary – have negative overall trade
balances in ICT goods. Even though they have stronger ICT manufacturing
industries than the other CCs, their economies have to absorb the effects
of a much larger demand.
à Last but not least, it may well be that
these strategies, and the industries themselves, will be sensitive to
the potential impacts of accession. While the single market rules will
further boost export capabilities as the logistics of doing business are
made easier, it may well be that some aspects of today’s policies will
come under scrutiny in order to make them meet fair competition rules.
Excessively generous incentive policies, for example, may be cut back.
With the exception of Hungary, even the CCs that are seen as ICT manufacturing
champions have negative overall trade balances in ICT goods
Bearing these factors and the most recent company decisions (to relocate
to Asia, for example) in mind, it is fair to conclude that developing
"classical" Tiger strategies by encouraging foreign or domestic companies
to foster and grow in the domain of ICT manufacturing may be, today, a
mistake. Though these strategies were rewarding in the 90s, today the
position of western European "Tigers" – Ireland, Finland, Sweden – has
been weakened not only by the downturn of the market and the difficulties
in the telecoms sector, but even more by the pervasive trend of globalization
and one of its obvious consequences: the rise of the Asian countries as
both major economic partners and challengers. The timing now after two
decades of progressive globalization may thus play against new entrances
in terms of industrial scenarios.
Conclusions: from benchmarking to benchlearning
Two major conclusions emerge from observation of IS-related initiatives
in the EU-15 during the last decade. Firstly, the integration of global
ICT companies in the domestic economy with strong investment incentives
may be risky in the medium term because it relies on the dynamics of a
cyclical and global industry rather than on the domestic economy’s intrinsic
strengths. While this has been successful for the so-called "Tiger" countries
of the EU15 during the 90s, today’s economic conditions no longer seem
to favour such scenarios. Two decades of globalization (particularly noticeable
in the ICT industry), the emergence of Asian economic challengers, the
bursting of the speculative bubble around the new economy, and the overall
downturn of the global economy, hinder repetition of the West European
One of the lessons to emerge from IS-related initiatives in the EU-15
is that the integration of global ICT companies in the domestic economy
with strong investment incentives may be risky in the medium term because
it relies on the dynamics of a cyclical and global industry rather than
on the domestic economy’s intrinsic strengths
Second, a unique recipe or scenario for the road forward as regards IS
strategy for any one CC, let alone the CCs as a group, does not exist.
The simple emulation of EU-15 "best practices" is seen as less and less
relevant for CCs. CCs should be "benchlearning", rather than benchmarking,
from EU-15 successes and failures, and also from other countries and regions
around the world. They would benefit from making the best possible use
of the accumulated European, Asian, US and developing countries’ experiences
to develop their own trajectory and articulate the IS strategies as one
important tool - although not a panacea - for the development of their
national economies, societies and democracies.
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