ICT – Tools for Providing Information, Advice and Services for Rural SMEs?

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Title: ICT – Tools for Providing Information, Advice and Services for Rural SMEs?
Editor: Matilainen, Anne
Belongs to series: Reports 10
ISSN: 1796-0630
ISBN: 952-10-2575-1
Abstract: Information is a very important tool in sustaining existing businesses and supporting the desire to create new ones. Information can be seen as the fourth business resource along with land, labour and capital. Especially the information needs of rural SMEs and micro entrepreneurs have increased. Complexity of the operational environment of the present-day SMEs, internationalisation, continuous development of the information technology and the significance of immaterial capital (e.g. human capital, know-how) as competitive weapons evokes the need for information and wide expertise in SMEs. Ability to utilise and apply information is continuously more and more significant factor in developing business and succeeding in competition. Due the limited resources of rural SMEs, they do not have possibilities to hire skilful staff for different business operations, which is the case e.g. in larger companies. This puts more pressure to the skills and knowledge of the entrepreneurs. Against this background, it can be estimated that the entrepreneurs’ needs for external information as well as the use of external experts are continuously increasing in near future. However, SMEs are traditionally not seen as proactive in the acquisition of external information. The information is not sought for until it is urgently needed (Kaipainen 1989). When information is needed, it’s supposed to be quickly at hand. For entrepreneurs the information can be seen simply as a tool for solving the problems in the company. Information or knowledge itself has no actual value to the entrepreneurs, if it can not be used solving their problems. (Matilainen and Zimmerbauer 2005). SMEs use many sources of information. The sources are both verbal (e.g.: customers, other entrepreneurs, experts) and printed/written (e.g. publications, reports, researches, information in Internet etc.). (Sapman 1999.) On the other hand rural SMEs favour clearly time saving information sources, but at the same time they highlight specially the role of face-to-face connections in information acquisition (Matilainen and Zimmerbauer 2005). This contradiction causes interesting challenges to the information dissemination: how to be effective and still retain the personal interaction? Without a doubt the significance of knowledge in decision making and risk control is essential. Lack of information is a major part of the uncertainty in decision making in the small rural enterprises. According to Saapunki’s research (2002) the needed information of the Finnish entrepreneurs for decision making process was related either to information of their own field of industry (future trends and estimations, information for comparisons, current information on the situation on their field of industry) or it was situation related information (can be very specific and difficult to categorise). (Saapunki 2002). The information needs are usually very much connected to the problems on hand. The intricate specifics for particular types of information vary widely also according to the enterprise’s type, its size, the nature of its market and also to the capabilities and ambitions of the business (of its owners/managers). Furthermore, the specific information needs of SMEs will vary according to enterprise’s lifecycle stage (e.g. start-up, growth and expansion, winding down) and the financial position of the business (e.g. information required by a business with money to invest will be different than the one facing financial difficulty). As well as the needed information in decision making, also the delivery channels used in acquisition of it are related to the target of decision, the influences of the decision (how wide they are) and the knowledge and experiences of person making decisions. Also the role of tacit information is significant (Saapunki 2002). Since the variation in information needs can be enormous, SMEs are challenged to use more and more different kind of information sources. Information networks give an ability for SMEs to obtain information they need. Especially it can be estimated that the use of ICT gives rural SMEs access to such services (e.g. design or marketing) which have not been easily at hand before. (Maaseutupoliittinen… 2004.) Due to the increased demand for external information, different kind of business services’ and especially knowledge-oriented business services’ (i.e. expert services) significance for SMEs has become more and more important. The trends of development connected with SMEs (specialisation, networking, internationalisation etc.) will likely increase SMEs’ need to use these services. Even the general trend of the use of the expert services in SMEs is upwards, the problem is, as Storhammar (1995, 1996) states, that SMEs are, because of their characteristics, a group, whose needs are difficult to take in consideration in service supply and whose abilities to use business services are quite deficient. In many national researches made among rural SMEs in Finland, the entrepreneurs have criticised the possibilities to find meaningful information for their business operations. They also state, that they do not have enough knowledge of the new services targeted to SMEs (see e.g Tiainen et. al 2004, Lahtinen and Roose 2003, Internetiä käyttämättömät…2003, Saapunki 2002, Selvitys pk-yritysten…2001, Rutanen and Matilainen 2001). In practise this has caused, that the use of external information services and sources has not been as vivid as anticipated. It can also be questioned, whether the lack of knowledge of the existing services is the real reason for not using them, or are there some more complex reasons or obstacles behind it. It is evident, that there is a clear need to improve the accessibility of the rural SMEs to the meaningful external information. It is also essential to develop better delivery mechanisms of the information especially in remote rural areas, where the distances e.g. to advisory organisations and other information sources are long. ICT can provide an interesting possibility in solving these problems e.g. by providing some possibilities to improve information delivery. Nowadays, ICT adoption in rural enterprises in Northern Europe is not considered to be anymore an actual competitive advantage as itself, but the fact of “not to have” implies to disadvantage and exclusion. However, before possibilities offered by ICT can be fully utilised, there are several problems to be solved. There can be problems both with technical issues as well as with the methodological issues relating to the information delivery and content of different kind of information services (Matilainen et al 2005) . It is also essential to understand more in depths the SMEs’ acquisition of the information in general: how the information aquisiting and delivery processes work, how the operational and cultural caps and obstacles in delivery chain could be overcome and what are the most suitable methods for delivering information in each case. These are some of the questions that the RuBIES –project is focusing on. RuBIES (Rural Business Information Exchange System) is a transnational project aiming to provide assistance and support to rural businesses and SMEs, to improve their access to relevant business information and thereby improve business efficiency and decision making. The project has examined rural business information needs and black spots, and aims to deliver improvements to their understanding to delivery of the business information. In addition the project aims to solve problems of information exchange by providing new solutions and methods for it from the demand driven point of view. The same problematic is also in focus in ICT – Tools for Providing Information, Advice and Services for Rural SMEs? –seminar. The seminar is focusing on one of the most acute question in the sector of business advising in rural areas: how is it possible to deliver external information to the micro enterprises in remote rural areas, so that it has a positive impact to the business development. And what kind of possibilities ICT has to offer in this process. The problematic is approached in the seminar presentations by introducing technological as well as methodological solutions. The seminar papers provide also a review to attitude based problematic in utilisation of ICT as an information delivery channel in rural SMEs and micro enterprises, and give an overview to so called ICT culture of rural SMEs in European context. The articles in the seminar proceedings include theoretical approach on the problematic as well as present various case studies from different European countries. The focus is on rural micro entrepreneurs and diversified farms. The articles are based on the presentations of the seminar held 6th-7th of April in Oulu, Finland.
URI: http://hdl.handle.net/10138/222491
Date: 2006

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