The Role of Information Technology in Mediating External Information to the Rural Micro Enterprises : National Literature Review : Rural Business Information Exchange System (RuBIES) Project

Approximately 86 % of all the companies in Finland employ less than 4 people. Percentage can be estimated to be even higher in rural and especially in remote rural areas. Therefore it can be said that most of the rural small and medium sized enterprises (SMEs), especially nature-based entrepreneurs (NBEs) can be referred to micro enterprises. There were 79 800 active farms and 64 600 small rural enterprises in 2000. That amount equals 29 % of all small rural enterprises in Finland. The number of farms is estimated to decrease radically and therefore there is a clear need for new means of livelihood and small businesses in rural areas. Characteristic for Finnish rural SMEs is also that their business is not often based on expansive business strategies. (Rantamäki-Lahtinen 2000, Statistical yearbook of Finland 2003, Maaseutupoliittinen kokonaisohjelma 2004.) Enhancing entrepreneurship, both in urban and rural areas, is one of the most important sectors in national politics in Finland. Both national and EU-programmes strive for amelioration of operational environment of SMEs. As a one major part of the development measures is promotion of the use the ICT in SMEs. The know-how in ICT technology production is on a very high level in Finland. The reason for the success has been the knowledge of effective producing. Also the ICT infrastructure is relatively good, although it is not divided equally between rural and urban areas. According to Koivumäki and Soronen’s research in 2004, 28 % of households in urban areas had an broadband connection, when in the rural areas the same figure was only 8 % (Koivumäki and Soronen 2004). Despite the relatively good infrastructure, in using the possibilities of ICT and ICT services, Finland is only on the average level in comparison with other countries. When studying the private Internet users more in detail, in 2003 there were 221 Internet connections per 1 000 inhabitants. 54,6 % of total population have used Internet and 44,6 % from weekly basis. In summer 2002 approx. 55 % of Finnish households had at least one computer at home. Also at the same time over 80 % of population aged 15–74 had a mobile phone in their own use. (Statistical yearbook of Finland 2003, Nurmela, Parjo and Ylitalo 2003). In general, over 90 % of all SMEs used Internet in 2003, even though it can be estimated that the figure is a bit smaller in rural areas. In 2003 approx. 70 % of farmers had a computer and approx. 55 % of all farmers also had an Internet connection (Kommeri 2003, Statistics Finland 2003). 63 % of rural food SMEs had the Internet connection in 2002 (Viitaharju and Lähdesmäki 2002) and over 50 % of forest owners were reported to have the Internet connection in 2004 (Sivula 2004). The most significant benefits for SMEs of the use of Internet are: saving time (possibility to manage operations easier and faster, flexibility, on-line possibilities, accessibility to updated information), saving money (related to saving the time, savings in labour and logistic operations etc.) and relating to benefits mentioned above, indifference to business location. The most used Internet services seem to be e-mail (communication), online banking and information search services. The most utilised public Internet service was in 2003 Internet service of tax administration. Approx. one third of SMEs have taken part to some kind of portals. Unfortunately portals have been mainly disappointments for entrepreneurs. On the grounds of the use of Internet, SMEs can be divided according Berg et al. (1999) into three different kind of groups: SMEs that do not utilise Internet at all (10 % in 1999), passive users of Internet (70 % in 1999) and active users of Internet (20 % in 1999). According to the latest estimations, the amount of non-users seems to be decreased, however at the same time the amount of active users has not increased. In most rural SMEs utilisation of ICT is not yet integrated to the business strategies. As barriers to ICT-utilisation in SMEs was mentioned e.g. that there was not a suitable business idea for e-business or e-services are not suitable for micro businesses. Also the lack of knowledge and skills, lack of knowledge of cost efficiency in implementation and lack of knowledge of public services hindered the use of Internet in the companies. Public services are still shattered, there are risks in data security as well as technical problems (incompatible systems). Concerning the ICT skills of rural SMEs, there has been a lot of development activities to enhance the use of ICT. The level of ICT skills is improving constantly, but there is still a long way to fluent integration of ICT to business operations. The age is one significant factor dividing the entrepreneurs to non-users/passive users and active Internet users. There have been a lot of educational courses, but they are not quite what SMEs are looking for. Also entrepreneurs’ lack of time to participate to courses is one significant barrier to learning new skills. From the methodological aspect, the role of peer group or other entrepreneur as an educator has been seen very successful. Also the continuity of the support is essential. However, as recent study about trust in e-services show, entrepreneurs don’t necessarily do a lot of benchmarking and share their experiences of ICT with their colleagues (Tiainen, Luomala, Kurki ja Mäkelä 2004). In conclusion, most of Finnish rural SMEs have not yet realised all the potential benefits offered by Internet services and the use of Internet is not yet seen as a part of business culture. At the moment SMEs use mainly more or less obligatory public external expert services (e.g. tax authorities). However, utilising widely external expert services might benefit especially the small rural SMEs, since they do not have possibilities to hire new skilled full-time staff for different business operations. Offering expert services in e-form may promote the use of external experts in remote rural SMEs (easy access to the external information), though the SMEs see that the accessibility of the services is not sufficient at the moment, products are not customer orientated enough and a support system is needed. However, before e-expert services can be fully utilised, there are more than just technical problems to be solved. The main problems seem to be in utilisation of the external knowledge in busi-ness actions and knowledge management. This necessitates new way of thinking also from the entrepreneurs and highlights the importance of entrepreneurs capability to apply the information to his/hers own business actions. At the moment there are more or less infrastructure, recourses (e.g. project funding) and even education needed available for the further adaptation of ICT technologies in rural SMEs. One of the main obstacles is the lack of ICT culture in SMEs (i.e. use of ICT as a natural part of everyday business operations and business strategies). The development of new ICT tools has been very rapid, but the business culture has not been able to keep track of technological development. Since it seems that the use of external information for business actions by using ICT technologies or otherwise is not fully integrated to rural SMEs business culture, it is relevant to gain more information of the role of information in business decisions and the SMEs’ acquisition of information through different kind of delivery mechanisms. These are some of the issues requiring attention in second phase of the project