"Strategic's 1st SouthEastern Europe IT FORUM 2001":
The end of introversion: Imperative need for expansion to foreign markets and use of new development models for the IT sector in S.E.Europe

Αθήνα, 26 Ιουνίου 2001 - We live in a period where information technology presents a steep increase in Greece and S.E.Europe, markets show high growth rates, and governments have dynamically entered the Digital Era. At the same time, though, the international stock market indices of high-tech companies are in a deep valley and many companies with Internet presence close down one after the other. In this confusing situation, IT companies and users, as well as government agents, in the S.E.Europe region are requested to answer the following question: where can the future opportunities be found and which way we have to follow to secure a sustainable future?

A considerable effort to present and analyze the current situation and give answers to strategic questions in the IT field in S.E.Europe was made by "Strategic's 1st SE Europe IT FORUM 2001". The Forum's main topic was the transformation that appears in the business world of S.E.Europe as a result of the synergy of IT and Internet. Apart from its basic technological topics, the forum was characterized by a series of novelties, like the coverage of topics related to the society and the IT in SE Europe, the Digital Gap of countries and enterprises, the human resources shortage, and at last the actual and interesting "Irish Paradigm", which is a global model of successful development through the Information Society. 

Ireland is a good example for Greece to follow
The "Irish Paradigm", a model of successful economic development through the Information Technologies, was presented by distinctive speakers from Ireland like Mr Padraic Murray from the organization Enterprise Ireland and Mr Padraic Moran from the consulting firm HotOrigin. 

Ireland is one of the four hot spots in Europe for software development. According to a recent survey of HotOrigin, there are more than 800 software companies in Ireland employing 2500 persons and contributing by 8% to the country's GDP. Government initiatives for the attraction of R&D programmes as well as for providing a low corporate tax environment led to the founding of more than 130 local software companies in the last two years and to the attraction of many international companies. The technologies and products are focused mainly on the areas of enterprise application integration, wireless applications, e-learning and CRM. 

The rapid development of Ireland in the IT sector has brought the country closer to the perspectives for entering a New, Digital Economy. "The Strategic's National e-Transformation Readiness Index-SNETRI, developed by Strategic International, is 91% for Ireland, meaning that the country is only 9 percentage units away from the European average (opposed to 59 for Greece)", as it was announced by the company's CEO Mr Kostas Kataras.

Graph 1:
National e-Transformation Readiness Index Ireland and Greece

Source: Strategic International SA, June 2001

This progress is mainly due to the government's strategy of low corporate taxation which attracts foreign companies and investors. The second important factor that contributed to the creation of the "Irish Paradigm" is the utilization of the local human resources by founding new technical schools and motivating young people to proceed to technological studies. As it was mentioned at the Forum, Greece can learn a lot from the example of Ireland and can establish its position in technology sectors in S.E.Europe.

The Human Resources shortage decelerates the development of the IT sector - The Israel case
The shortage of Human Resources in the market is a reality worldwide and it represents a major concern and threat to the development and growth of business in the Digital Economy. Government agencies, universities, business associations and business leaders now face a key challenge - to adequately address the IT labour shortage - in a joint effort, by implementing strategic plans such as the project "Education 2000", a success case in Israel.

According to Mr. Elisha Yanay, Vice President of Motorola, Chairman of the Board and CEO of Motorola Communication Israel, the Israeli sales volume has grown from $6.5b in 1996 to approximately $15.5b in the year 2000. For the same period the engineer and scientist population has grown from 17,000 in 1996 to 42,000 in 2000. To maintain its technological position, Israel needs to increase dramatically the number of electrical engineering and computer science graduates.

Graph 2:
Electrical Engineering and Informatics graduates, Israel

Source: Elisha Yanay, Motorolla Inc.

Deep concern for the Greek IT industry
The position and the perspectives of the Greek IT sector in S.E.Europe was discussed with a remarkable interest and with the participation of representatives of the Association of Information Technology Companies of Greece and Northern Greece. It was agreed that, despite the blooming of collaborations with other countries in the region, Greek IT companies have not a strong presence because an introvert mentality and the lack of governmental strategy on this issue discourage many businessmen of expanding to new markets. Greece has to exploit its competitive advantages in the S.E.Europe market, i.e. its technological advance and its ability to be the link between the EU and the wider Balkan area. At the same time, Greece should be open to eventual expansion to other European or international markets for certain products and services.

Table 1:
Basic characteristics of the IT sector in S.E.Europe, 2001

Source: Info-quest

From e-Business, now back to ...Business
The IT users enter a period of tranquility aiming at making a better use of their investments and face the disappointment from the high expectations created to them by the technological evolution. The users and the IT sector have to face the new reality in Greece and abroad. 

The dot.com companies collapse one after the other while the famous e-Commerce seems to be absent. According to data presented at the Forum by the consulting firm Strategic International SA, B2C e-Commerce in Greece is only 0.024% of the total consumer consumption, whereas it is not more than 0.4% in the US, the leader in this area. 

It was a common conclusion by all speakers that the dream of fast and easy profit is over. The rules of the Old Economy are also valid in the New Economy. Companies have to go back to them and invest on long-term plans. They have to concentrate their efforts on their profitability and a guaranteed added value of their products and services. IT has to be used for increased efficiency, better customer service, lower costs, and best use of internal corporate information.

Graph 3. Percentage of B2C spending to total consumer consumption - 2000

Source: Strategic International/K.Kataras SA, 2001

Pioneer initiative for the Digital Adoption of a Greek remote village
The Digital Divide between social groups, geographical areas and countries was a key topic at the Forum. While the product of the current high technology is accumulated at some civil centers, a big part of the population has no access to it. Through a vicious circle where the Digital Divide creates an Economical and then a Technological Divide, which further leads to a new Digital Divide, the distance is getting bigger rather than smaller. 

Dr. Ilias Ganoutas, Regional Policies Expert, announced at the Forum closing a pilot initiative to build information villages in a poor region of the EU. In the framework of this initiative, a remote village with low IT and Internet penetration will be chosen and a complete IT infrastructure will be built sponsored by Greek IT companies. This initiative is a very important effort of Strategic International SA, which prompted the initiative, aiming at lowering the digital barriers in Greece and especially at remote regions.

Information
For more information concerning "Strategic's 1st SouthEastern Euorpe IT Forum 2001", visit the site of the forum:
http://www.strategic.gr/events/ITForum2001

About Strategic International SA
The Forum is organized by Strategic International SA, a firm with long - standing experience in organizing international conferences. Strategic International SA (www.strategic.gr) is a Strategy Consulting firm specializing in Telecommunications, Information Technologies, New Media and the Digital Economy. The company has deep knowledge in the field, based on Market Research, Creative Analyses, International Customers and a strong network of partners in Europe. Main services include: Consulting, Market Research, e-business, Publications and Events.