INFORMATION SYSTEMS IN NETWORKS OF SMALL FIRMS Challenges in a Globalized World

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1 12 INFORMATION SYSTEMS IN NETWORKS OF SMALL FIRMS Challenges in a Globalized World Renata Lèbre La Rovere Instituto de Economia/Universidade Federal do Rio de Janeiro, (Institute of Economics, Federal University of Rio de Janeiro, Brazil Abstract: Keywords: This paper assumes that globalization poses competitive challenges to small and medium - sized enterprises (SMEs) that can be surpassed if these firms insert themselves in networks. The first section discusses how SMEs can define a competitive strategy. The second section shows how the insertion of SMEs in a network, especially SMEs that belong to a local productive system, can enhance their competitiveness. The third section discusses how information systems can structure a network of SMEs. In the concluding section issues for future research are discussed. Small and Medium-Sized Enterprises, Information Systems, Competitiveness, Networks. 1 INTRODUCTION The globalization process has introduced several competitive challenges for firms, especially small and medium-sized firms (SMEs). The issue of impacts of globalization on SMEs is important because these companies are powerful sources of revenue and employment. The issue of SME competitive capabilities is important especially for developing countries, where already a large number of these companies exist but most are familiar businesses that barely survive in a competitive market. In developing countries, several SMEs are created yearly but they also have a high rate of mortality. For instance, in Brazil recent research indicated that 59% of Brazilian SMEs survive for more than 4 years, whereas for large firms the rate of survival is 82% (Najberg et al., 2002). The high mortality of firms is a problem as SMEs account for 66% of employment in Brazil (La Rovere, 2001). As Lall (2002) has recently observed, What does it take for developing countries to succeed in a globalized setting? In a word: competitiveness. In these countries globalization has put competitive pressure on small firms from several sectors as mergers and acquisitions resulting from the opening of the countries economies led to a concentration of firms or to the entrance of foreign large firms in the market that raised product and quality standards. Thus small firms in a Please, do not Reproduce without Permission. Copyrights Reserved by the Author

2 130 Renata Lèbre La Rovere globalized economic environment have to deal with not only with their inherent difficulties to reach competitiveness but also to the challenges posed by globalization. The formation of networks of enterprises may be a way for SMEs to compete successfully with larger enterprises and to put their products in the global market. Information systems can support such networks, but their implementation will depend on previous steps taken by small firms. The aim of this paper is to discuss how information systems can support SMEs networks so that those firms can raise their competitiveness and answer to the challenges of a globalized market successfully. The first section presents SME s inherent difficulties to define competitive strategies. The second section discusses how the formation of networks can help the competitiveness of firms. The third section discusses how information systems can structure a network of SMEs. In the concluding section issues for future research are discussed. 2 COMPETITIVE STRATEGIES FOR SMES IN THE NEW TECHNO- ECONOMIC PARADIGM The concept of techno-economic paradigm was developed in the eighties by neoschumpeterian economists (Dosi, 1982; Freeman, 1982; Perez, 1983) that wanted to explain how the creation, use and diffusion of new technologies affects the companies competitive strategies and the dynamics of economic development. The techno-economic paradigm is a combination of technical, organizational and institutional innovations that provoke transformations in the whole economy and have a considerable influence in its behavior. A new techno-economic paradigm involves the creation of new sectors and activities, new ways to create and diffuse information and knowledge, new modes of commercialization, new strategies and policies and new modes of operation of public and private institutions (Lastres and Ferraz, 1999). In the present techno-economic paradigm, firms are dealing with technology-intensive and knowledge-intensive products, which have diminished life cycle and often require flexible production processes. In this context it is essential for any enterprise to define an adequate competitive strategy and to monitor its performance so that the strategy can be frequently adjusted. We define competitive strategy as the deliberate choice of a given group of activities to produce a unique mix of value (Porter, 1996). The essence of competitive strategy consists in making activities in a different way or to create different activities from those of rival enterprises. The definition of the competitive strategy of an enterprise is done after an analysis of its competitive environment. As observed by Porter (1990), there are four determinants of competitive strategies of an enterprise: factor conditions, demand conditions, supply of intermediary goods and the competition structure. The enterprise must identify threats and opportunities related to the competitive environment considering these four determinants to define its competitive strategy. The complexity of the analysis of the determinants listed above puts challenges to define a competitive strategy in a small enterprise. Several SMEs, especially the smallest, have low management capabilities. The reduced size of the enterprises makes their owners and managers to work with short-term planning, blocked in a vicious circle where the resolution of daily problems hinders the definition of long-term competitive strategies (Vos et al., 1998). Therefore practices to organize information flows in small enterprises that could support the process to define longterm competitive strategies are rare and decisions are made on a short-term basis. This vicious

3 Information Systems in Networks of Small Firms 131 circle inhibits innovation strategies and is one of the elements that contribute for the difficulties SMEs have to survive in their markets and to conquer new markets. Besides, operational procedures can be easily imitated depending on the sector the enterprise belongs to, making competitive advantage conditioned to the development of innovations or the conquest of specific resources. Porter (1996) observes that many enterprises base their competitive strategies in the search of operational efficiency, which is important but does not guarantee the sustainability of competitive advantage. A small enterprise may succeed in the definition of a competitive strategy if it can distinguish the nature of information related to the definition of the strategy. The evaluation of factor conditions depends on gathering information inside the enterprise, whereas the evaluation of supply, demand and competition conditions depends on gathering information that is external to the enterprise. An enterprise may identify its factor conditions by working with the concept of resources proposed by the resource-based theory (Rangone, 1999). Resources of an enterprise include not only tangible resources (physical, financial and human resources) but also their intangible resources (capabilities, competencies and organizational culture). Therefore, to create a competitive strategy an enterprise needs to know its resources, identify which resources will be necessary to produce a given product or service and develop an innovation strategy to this product or service. It is important to stress however that whatever the strategy chosen, managers of enterprises must know what resources they have. Empirical studies on small enterprises show that normally the owners and/or managers centralize the knowledge about resources of enterprises. However these studies also show that, although owners and/or managers have a clear notion of how complex their business is, they have a limited formal knowledge of their own enterprise and tend to justify this limitation comparing their enterprise with larger ones (Rodrigues, 2000). The enterprise must therefore have an information system that can enable it to know its resources so that it can define its competitive strategy, as will be discussed in this paper. As will be seen in the next section, competitiveness of SMEs can be enhanced by the participation in networks. 3 THE COMPETITIVE PERFORMANCE OF NETWORKS OF SMES AND LOCAL PRODUCTIVE SYSTEMS As observed by Britto (1999) networks of enterprises are institutional ways of organizing economic activities, based on the coordination of regular cooperative relationships that are established between agents. The same author suggests that the generation of competitive gains in a network depends on an ensemble of the network internal properties: operational efficiency, productive flexibility, efficiency of coordination, inter-organizational flexibility, ability to process information and integration of innovative capabilities. These properties depend on how the organization and the flow of information inside the network take place. The most important elements to understand a network are the nature of hierarchical relationships inside the network and spatial proximity (Garofoli, 1993). Thus, a network can be spatially concentrated and have a dominant firm, such as in the case of industrial complexes. The network can be spatially concentrated but have no hierarchical links, constituting an industrial district. The network can be spatially decentralized, based on ICT, constituting a global

4 132 Renata Lèbre La Rovere production chain. Finally, the network can be spatially decentralized and have no hierarchical links, as happens when firms establish strategic alliances. Decentralized networks may be a way for a firm to exchange information and products with their counterparts in another regions and countries, so they can be a solution for SMEs to gain access to the global market. However, as access to these networks requires that SMEs have access to ICT and individual capabilities to use these technologies, information systems in these firms can be easily implemented. Therefore this paper considers only the particular type of network that poses more challenges to information systems implementation, that is networks of SMEs spatially concentrated in a local productive system and with non-hierarchical links among them. In the context of the new techno-economic paradigm, the ability to transform information in knowledge is essential for the enterprise. Capello (1999) made an empirical analysis of Italian high-tech firms and observed three types of learning processes: learning based on external knowhow, knowledge based in internal competencies and collective learning. The smallest and more innovative firms were those where collective learning dominated. This result confirms the suggestion of Lundvall (1999) that product innovations generate information problems, since producers must have a feedback from the users and those users must have information about the new product. The collective learning process surpasses these problems because it allows firms to exchange information about the product collected by users and to make joint efforts to diffuse the new product. Lundvall (1999) also observes that the role of geographic proximity is very important to develop innovations, because subjective elements such as trust and friendship are relevant in this process. The search for generation of knowledge can make enterprises follow what Lundvall calls communicative rationality, which involves understanding between agents. Thus the rationality of a local system includes elements of strategic rationality (where agents search for cooperation to maximize benefits and reduce costs) and elements of communicative rationality. However the coexistence of communicative and strategic rationality can generate instabilities and stimulate SMEs located in a local productive system to constitute networks. Therefore, networks of SMEs have been identified as a way for SMEs to surpass behavioral and organizational limits they have, because they generate not only positive externalities but also active collective efficiency gains. As observed by Visser (1999), enterprises that are clustered in a local productive system have collective efficiency gains. Collective efficiency can be active or passive. While passive collective efficiency derives from gains in commercialization, sharing infrastructure and monitoring competitors behavior, active collective efficiency results from the search by enterprises of solutions for their competition problems by cooperating with other SMEs. The cooperation can be with enterprises that produce similar products, aiming to increase volume of sales and the quality of the product, or with users and suppliers, aiming to develop product and process innovations. Active collective efficiency gains are essential to obtain sustainable competitive advantages, because when enterprises are limited to passive collective efficiency they run the risk to become locked in business practices that do not follow the dynamics of market evolution. Enterprises belonging to a local productive system may be inserted in the same value chain but have no formalized networks between them. In this case informal contacts and family relationships link enterprises, and their strategies include price competition and imitation. As a result the enterprises have low profit rates and difficulties in commercialization, with evident needs in the areas of R&D, design, logistics, distribution and marketing (Vanhaverbeke, 1999) Social institutions present in a local productive system have an important role for obtaining sustainable competitive advantage as they can help enterprises to surpass their deficiencies in the

5 Information Systems in Networks of Small Firms 133 areas of R&D, design, logistics, distribution and marketing. The exchange of information between those institutions and between them and the enterprises allows for the development of adequate resources in the enterprises. Belussi (1999) observes that the organizational and institutional learning process is essential to obtain sustainable competitive advantage, and that the training institutions focused on learning have an extremely positive role in this process. Cases of success in the creation of networks of SMEs belonging to a local productive system can be found in Italian industrial districts. In those cases, a combination of organizational and market structures, competencies and technologies has allowed their structural insertion in global markets, assuring long-term competitive advantages (Coró, 1999). Three elements constitute the success of districts: the characteristics of the productive system, the context of creation and exchange of information, and the ensemble of social institutions. 4 INFORMATION SYSTEMS AND NETWORKS OF SMES As mentioned before, the success of industrial districts depends on the characteristics of the productive system, the context of creation and exchange of information and the ensemble of social institutions. Information systems are important not only to create and exchange information but also to gather information about the characteristics of the productive system so that enterprises know their resources accurately. The adoption of standard procedures to collect information from enterprises located in a productive system allows them to quickly define the division of roles required by a contract with customers or suppliers. The flexible enterprise uses different combinations of resources to solve problems: workers can form a group in one moment and a different group in another. As networked enterprises establish cooperation links based on the solving of common problems, they increase their flexibility by successfully changing the resources involved as the problems are solved. For instance, the setting up of a trade bureau in a productive system whose enterprises do not have tradition in exporting can be a way to stimulate shared production projects. The enterprises of the system can share production after they identify the needs of importing countries. However this division will succeed only if the products of different enterprises have exactly the same quality. The adoption of quality control techniques is therefore essential for the success of the export project. The way by which information circulates among enterprises of the productive system is also essential for the learning process required for obtaining sustainable competitive advantages. The transformation of information in knowledge requires a process of interactive learning, which includes activities of learning by doing, learning by using, learning by searching e learning by interacting. Generated knowledge may be codified or tacit. Enterprises of a local productive system frequently have informal processes of exchange of information, related to friendship or familiar links that generate tacit knowledge important to develop innovations and obtain competitive advantage. As showed by the example of Italian industrial districts, the success of local productive systems of SMEs does not derive only from clustering, but also from a network of strongly integrated activities capable to generate an identity and motivate the actors involved (Cocco et al.,1999). The information system that connects enterprises and institutions of the network has to be focussed on those activities, to ensure continuous cooperation processes.

6 134 Renata Lèbre La Rovere The organization of information in local productive systems of SMEs has a double role. First, it creates conditions to obtain passive collective efficiency gains by making possible a fast exchange of information between enterprises. Second, it permits active collective efficiency gains by creating conditions to develop collective learning processes. Therefore, the organization of information in local productive systems of SMEs is an essential step to constitute networks of enterprises. Diffusion of ICT-based information systems in local productive systems is therefore a way to support and stimulate the constitution of networks of enterprises and the exchange of relevant information for the activities related to their competitive performance. The first step for the definition of an information system that supports a network of SMEs would be therefore an empirical assessment of the local productive system, making the following questions: What are the competencies and capabilities of the local productive system and how they translate in specific vocations? How these capabilities and competencies may be monitored by an information system? Are there enterprises and institutions that already have cooperation links? Which links exist and how they can be strengthened by the improvement of processes that generate knowledge and information? If cooperation links do not exist, are there enterprises and institutions that can establish these links? How the information system can help this process? The assessment of competencies and capabilities of the system must investigate not only individual resources but also collective resources such as quality control centers. Natural resources of a region that attract enterprises for the region can also be considered as collective resources. The information system must also monitor the resources of the local productive system so that these resources are adequate to the market s needs. As mentioned before, the enterprises must have standard procedures of information gathering so that they know what resources they have. Amani (1995), studied inter-organizational relationships and diffusion of technology and proposes a list of diffusion channels that can also be considered knowledge and information diffusion channels. These channels are: 1. Written documents 2. Meetings in the workplace 3. Teleconference 4. Employment of consultants 5. Employment of joint development teams 6. Data bases, expert systems and electronic commerce systems 7. Work teams sub-contracted 8. Suppliers of raw materials and components 9. Suppliers of equipment 10. Research centers and universities Amani observes that channels 1, 3, 6, 8, 9 e 10 are more adequate to the diffusion of codified knowledge, whereas channels 2, 4, 5 and 7 are also adequate for the diffusion of tacit knowledge. The information system must ensure that all diffusion channels are accessible for all elements of the network. A standard for channels 1 and 6 must be defined so that information can be quickly shared. The components of channels 8, 9 and 10 must as well be available for all

7 Information Systems in Networks of Small Firms 135 enterprises in the network. Experiences from channels 2, 4, 5 and 7 may be shared by the organization of workshops to solve specific problems. The question that arises when we consider the implementation of an information system that supports a network of enterprises is that enterprises consider information as a strategic asset and therefore will be resistant to share it with other enterprises. Trust between the components of the network is therefore an essential condition for obtaining active collective efficiency gains. As observed by Britto op.cit., the efficacy of the coordination of a network depends on several joint actions by enterprises and institutions of the network base on the principle of mutual trust. We must also observe that the strategic value or degree of sensibility of shared information and the dependency among the components of the network will be different according to the type of network (Sherer, 1998). For instance, a user-producer network will share information about production schedules, quality and prices, whereas a commercialization network will also have to share capabilities related to the product. The dependency among the components of the network and the sensibility of information will be higher in the latter network. The higher the degree of dependency between the components of a network, the more important will be trust for success. The lack of compromise and trust between enterprises and institutions of a network can be reversed by the action of an intermediary or social institution. As observed by Medeiros (2001), there is a consensus among the authors that study SMEs that modernization of enterprises and cooperation links among them are associated to the existence of intermediary institutions that develop joint actions. This happens because social institutions provide services that allow enterprises to go through a learning cycle. As observed by Stroeken and Knol (1999), the learning cycle starts with the acquisition of concrete experiences ( ) that provide individuals specific insights that are retained in the shape of mental models. On the basis of these insights the manager or entrepreneur will implicitly or explicitly formulate policy and undertake strategic action at a strategic level. The implications of these strategic actions will become visible in the long run (Stroeken and Knol, 1999: p.4). Social institutions not only provide opportunities for SMEs to acquire knowledge and test new technologies but also stimulate these companies to take joint actions that can result in trust relations and cooperation links among these companies. Sherer (1998) suggests that trust relations can be more easily built in a network when the agents involved know the capabilities of their partners and have good relations with them. The role of intermediary institutions would be to promote these relations, involving partners in joint activities and altering their capabilities through new learning opportunities. Social institutions include not only governmental and research institutions but real service providers as well. As observed by Bellini (2000), those services induce learning, have positive externalities and can be provided by public or private institutions. As examples of real services we can mention: consulting in finance, logistics, technology and management, support to credit patent registration, organization of trade fairs, advance telecommunication services and demonstration centers. Therefore real services identify and build network relationships that support new learning processes. The provision of those services is not necessarily public. Levistky (1996), studied support systems for SMEs in developing countries and observed that in some countries public agencies were created to provide those services but did not attain expected results due to trust and competencies problems. He suggests that using private services may be more efficient, and the role of the Government is to promote the development of these services and of the interactions between enterprises and institutions of the network. Bellini op.cit. shows that the performance of real services is conditioned to several elements: in some cases they are better provided by public

8 136 Renata Lèbre La Rovere institutions, and in others by private institutions. Public institutions have more ability and legitimacy to build consensus and mediate conflicts, whereas private institutions are more adequate to the provision of services that require accumulated knowledge and specialization. Therefore the implementation of information systems in networks of SMEs has to aim to promote communication between the enterprises and between enterprises and institutions so that they can develop collective action and establish cooperation links to obtain sustainable competitive advantage. These systems may be implemented by one or several intermediary institutions and have to be integrated with the provision of real services. 5 CONCLUSIONS In a globalized world SMEs face challenges to their competitive performance that can be surpassed by the formation of networks. SMEs located in a productive system have advantages to create networks because geographic proximity eases the interaction between enterprises and institutions necessary to establish cooperation links. However the fact that SMEs are located in a productive system does not necessarily mean that they will create a network, since networks depend on trust relationships. Institutions located in a productive system have therefore an important role as intermediaries that can support cooperation links and the constitution of networks. As trust relationships are based on sharing information between the enterprises, the implementation of an information system connecting enterprises of the local productive system can strengthen cooperation links that already exist and create new links, setting up the basis for the formation of networks. The first step to implement an information system is to stimulate the adoption of standard procedures to collect information about the resources of the enterprises. The enterprises must have organized information about their resources to define competitive strategies. If the enterprises constitute a network, organized information is important to enable the sharing of tasks inside the network. It is essential therefore that enterprises have the same criteria to evaluate resources and use the same ICT-based systems. ICT applications such as CAD and electronic commerce protocols must be also the same for all enterprises. Standardization of channels of diffusion of codified knowledge is essential for the implementation of an information system that links the enterprises. The system must also be implemented in a way that allows for monitoring the performance of the enterprises of the network so that future network initiatives and definition of competitive strategies can be defined. Since the creation and diffusion of knowledge is an interactive and cumulative process, the evolution of SME networks in the system will modify its capabilities, therefore continuous monitoring is necessary. Although several authors have faced the issue of information systems implementation in SMEs, most have focused on the challenges facing the individual enterprises. More research has to be done on the implementation of these systems in networks of enterprises, especially in networks of spatially concentrated enterprises that constitute a local productive system. How the implementation of information systems can support networks of enterprises is an important question for further research as networks of enterprises are essential for SMEs to obtain competitiveness and face the challenges of globalization.

9 Information Systems in Networks of Small Firms 137 REFERENCES Amani, M., Relations Interorganisationelles et Diffusion de la Technologie, in Deuxième Congrès International de la PME. Proceedings, Paris, October Bellini, N. Building Competitive Regional Economies:Up-grading Knowledge and Diffusing Technology to Local Firms. Stock-Taking Paper: Session 2 Services to Industry in the Framework of Regional and Local Industrial Policy. Paris, OECD, Belussi, F. Policies for the Development of Knowledge Intensive Local Production Systems, Cambridge Journal of Economics, (23), 1999, pp Britto, J.N.P. Características Estruturais e Modus Operandi das Redes de Firmas em Condições de Diversidade Tecnológica, PhD Thesis in Economics Faculdade de Economia e Administração/Universidade Federal Fluminense, October Capello, R. A Measurement of Collective Learning Effects in Italian High-Tech Milieus, Révue d Économie Régionale et Urbaine, (3), 1999, pp Cocco, G., Galvão, A.P. and Silva, M.C.P. Desenvolvimento Local e Espaço Público na Terceira Itália: Questões para a Realidade Brasileira, in G. Cocco, A. Urani and A.P. Galvão. (eds.) Empresários e Empregos nos Novos Territórios Produtivos - O Caso da Terceira Itália, Rio de Janeiro: DP&A, Corò, G. Distritos e Sistemas de Pequena Empresa na Transição, in G. Cocco, A. Urani and A.P. Galvão (eds.) Empresários e Empregos nos Novos Territórios Produtivos - O Caso da Terceira Itália, Rio de Janeiro: DP&A, Dosi, G. Technological Paradigms and Technological Trajectories: A Suggested Interpretation of the Determinants and Directions of Technical Change, Research Policy, (11:3), 1982, pp Freeman, C. The Economics of Industrial Innovation, London: Pinter, Garofoli, G. Economic Development, Organization of Production and Territory, Revue d Economie Industrielle, (64), 2eme trimester, La Rovere, Renata L. Perspectivas das Micro, Pequenas e Médias Empresas no Brasil, Revista de Economia Contemporânea, (5), 2001, pp Lall, S. Globalization and Development. Perspectives from Emerging Nations, in Proceedings of the BNDES 50 th Anniversary Seminar, Rio de Janeiro, Brazil, September 12, Lastres, H.M.M. and Ferraz, J.C. Economia da Informação, do Conhecimento e do Aprendizado, In: Lastres, H.M.M. and Albagli, S. (Org.). Informação e Globalização na Era do Conhecimento. Rio de Janeiro: Editora Campus, Levitsky, J. Support Systems for SMEs in Developing Countries A Review, Paper Commissioned by the Small and Medium Industries Branch Number 2. Small Medium Enterprises Programme/United Nations Industrial Development Organization, March Lundvall, B.A. Spatial Division of Labour and Interactive Learning, Révue d Économie Régionale et Urbaine, (3), 1999, pp Medeiros, J.R. Desempenho Competitivo do Setor de Confecções: O Caso do Rio de Janeiro, Final Paper in Economics Instituto de Economia/UFRJ, March Najberg, S., Puga, F., and Oliveira, P.A.S. Emprego: Análise da Sobrevivência das Firmas Brasileiras, Informe-se BNDES Área para Assuntos Fiscais e de Emprego, (46), August 2002, pp Perez, C. Structural Change and Assimilation of New Technologies in the Economic and Social Systems, Futures, (15:5), 1983, pp Porter, M. Estratégia Competitiva, Rio de Janeiro: Ed. Campus, Porter, M. What is Strategy?, Harvard Business Review, November-December 1996, pp Rangone, A. A Resource-Based Approach to Strategy Analysis in Small-Medium Sized Enterprises, Small Business Economics, (12), 1999, pp Rodrigues, M.E. O Conhecimento nas Micro e Pequenas Empresas: Um Estudo sobre sua Absorção e Utilização nas Micro e Pequenas Empresas Fluminenses, MSc. Dissertation in Management COPPEAD/UFRJ, February Sherer, S. Manufacturing Networking: The Role of Trust Intermediaries and Interorganizational Information Systems, in Proceedings of the 1998 IRMA International Conference, Boston, May Stroeken, J.H.M., and Knol, W.H.C. IT Scenarios from Small and Medium-Sized Enterprises, in Proceedings of the Third International Conference Technology, Policy and Innovation, Austin, U.S.A., August 30 September 2, Vanhaverbeke, W. Realizing New Regional Core Competence: Establishing a Customer-Oriented SME-Network, University of Maastricht, 1999, mimeo. Visser, E.-J. A Comparison of Clustered and Dispersed Firms in the Small-Scale Clothing Industry of Lima, World Development, (27:9), 1999, pp

10 138 Renata Lèbre La Rovere Vos, J.P., Keizer, J., and Halman, J.M. Diagnosing Constraints in Knowledge of SMEs, Technological Forecasting and Social Change, (58), 1998, pp About the Author Renata Lèbre La Rovere is an associate professor at the Instituto de Economia, Universidade Federal do Rio de Janeiro (Institute of Economics of the Federal University of Rio de Janeiro), Brazil, since She was born at Rio de Janeiro, got her degree in Economics at the Catholic University of Rio de Janeiro and did her Ph.D. in Industrial Economics at the Université Paris 7, France. Prof. La Rovere was a visiting scholar at the Management and Information Systems Department of the University of Arizona, U.S.A., between 1991 and She also did a postdoctoral research at the Information Systems Department of Rostock University, Germany, between 1995 and Her main lines of research explore the impacts of information and communication technologies on the competitiveness of small and medium-sized enterprises and the importance of SMEs for local development. She can be contacted by at renata@ie.ufrj.br