Digital Entrepreneurship Monitor. EC, Dana Eleftheriadou EY, Alessandro Cenderello Brussels, 26 September 2014

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1 Digital Entrepreneurship Monitor EC, Dana Eleftheriadou EY, Alessandro Cenderello Brussels, 26 September 2014

2 Digital Entrepreneurship Monitor Agenda 1. Overview of national policy initiatives and business opportunities 2. Digital Entrepreneurship Scoreboard pilot run Page 2

3 1. Overview of national policy initiatives and business opportunities Page 3

4 Update - MS Board April 2014 Collection of digital entrepreneurship initiatives One of the aims of the Digital Entrepreneurship Monitor is to identify and keep track of digital initiatives within the European Union and beyond; A database was set up and the initiatives were gathered through desk research and substantial amounts of interviews with representatives of all Member States; The identified initiatives were then shared with the Members of the MS Board following the first meeting- April 2014; The feedback received from the Members and desk research performed by EY has led to 287 new initiatives and over 40 initiatives that were no longer active; The total database currently contains 1284 initiatives. Page 4

5 Enabling Digital Entrepreneurship Update - MS Board April 2014 Components of an initiative Searchable database: country, enabler, type of initiative Key Information provided per Initiative: Title & Description Country (EU 28 and main international competitors) Type of initiative Geographic coverage: Regional National European International Digital knowledge base and I ICT market Digital business environment II Access III to finance Digital skills and e- leadership IV Entrepreneurial culture V Page 5

6 Update - MS Board April 2014 Focus areas of the identified initiatives in the EU Current Status 26 September 2014 Digital knowledge base and ICT market 17% 32% Digital business environment 12% Access to finance Digital skills and e-leadership 21% 18% Entrepreneurial culture Page 6

7 Update - MS Board April 2014 Policy initiatives & strategies The database contains both actions and policy initiatives (i.e. strategies); Most initiatives across Member States (MS) are ad hoc and few have an overarching digital focus; There is no evident coherence between initiatives within EU MS nor an overarching EU connection. A better coordination at EU-level will provide maximum visibility, create critical mass of digital entrepreneurs and maximise the impact of national/regional initiatives; Identified MS have coordinated actions embracing the entrepreneurial aspect of digital; such as Germany, Ireland, UK; Further effort to understand the impact and lessons learnt on the ongoing initiatives will be key to support the policy recommendations; MS are working on new policies and strategies which will be put in place in the recent future. Page 7

8 Short recap & actions since last forum Received feedback on identified initiatives Thank you for sending us feedback on the initiatives: Belgium Latvia Bulgaria Lithuania Croatia Luxembourg Denmark Malta Estonia The Netherlands Finland Poland France Portugal Hungary Slovenia Ireland UK Call for action Your initiatives can be of significant value for the Strategic Policy Forum; Follow up with MS will take place after 26 Sept meeting to gather relevant insights. Page 8

9 Overview of good practice initiatives Framework of enablers Digital knowledge base and I ICT market Enhancing digital innovation, commercialization and the ICT sector ENABLING DIGITAL ENTREPRENEURSHIP Digital business environment II Strengthening digital infrastructure, the regulatory framework and improving ease of doing business Access III to finance Facilitating access to finance and enhancing digital investments Digital skills and e- leadership IV Fostering e-leadership skills through education and training Entrepreneurial culture V Creating a supportive entrepreneurial culture Page 9

10 Overview of good practice initiatives Digital knowledge base and ICT market (Enabler 1) Name: Evoliris Country: Belgium Reference centre for ICT professionals in the Brussels-Capital Region. It provides an infrastructure of advanced IT training and is co-financed by the private sector. Its main objectives are: matching the need for training with the needs of the enterprises, strengthen the role of employment offices & improve training programmes. Name: Program "PME Digital" Country: Portugal The programme provides SMEs tools to enhance their digital communication with customers and suppliers and their overall management of the business. These tools allow businesses to be more organized, profitable and competitive. Name: ICT in SME and e-commerce plan Country: Spain The aim is to: increase the efficient and intensive use of ICT in SMEs, implement e-billing in companies, increase the number of people and SMEs that engage in e-commerce. Page 10

11 Overview of good practice initiatives Digital business environment (Enabler 2) Name: Digitale Steden Agenda Country: Netherlands Participating municipalities organise themselves within the DSA using ICT for improved quality and customization in different domains such as healthcare, security, e-learning etc. using smart and digital technologies. Name: Riga IT Demo Centre Country: Latvia Riga IT Demo Centre performs as IT marketing and communication platform for IT focused enterprises by introducing industry based business solutions, e-services solutions for public and private usage, mobile applications for business and entertainment. Name: Ljubljana Digital city Country: Slovenia Public-private partnership between the Municipality of Ljubljana and a consortium composed of Telekom Slovenia and Nil. This project is to create the connection between WiFi and optical communications with cloud computing. Page 11

12 Overview of good practice initiatives Access to finance (Enabler 3) Name: Corporate profit tax incentives for investments in new technologies Country: Lithuania Companies investing in new technologies can reduce their taxable profit by up to 50%. Name: AEESD (Acción Estratégica de Economía y Sociedad Digital) Country: Spain Funding for experimental development projects in one of the following thematic priorities: Industries of the Future (Internet infrastructure of the future, components and electronic systems, cloud computing, big data), Cybersecurity and digital trust. Name: Digital Catalyst Fund Country: Romania This initiative provides funding & mentoring for start-ups in active in Content Aggregation, Customer Analytics, Social Media Applications, Digital Supply Chain and Digital Monetization. Selected entrepreneurs are invited to Bucharest, where they can work with experienced software technology talents. Page 12

13 Overview of good practice initiatives Digital skills and e-leadership (Enabler 4) Name: Womentor Country: Sweden Womentor is a leadership development and mentoring program for women in the IT and telecommunications industry who have taken their first steps as managers and want to move on. IT & Telecom runs the program to support the industry to take greater advantage of and develop women's skills as future leaders. Name: Erlebe IT Country: Germany Erlebe IT informs students about educational opportunities, courses and internships in the ICT industry. Name: PCRS: Digital Poland of Equal Opportunities" Country: Poland This initiative encourages people over 50 years to make the first step into the digital world. The programme is realized in partnership between the Ministry of Administration and Digitisation and the Cities on Internet Association. Page 13

14 Overview of good practice initiatives Entrepreneurial culture (Enabler 5) Name: Seal of e-excellence Country: Bulgaria Recognition for companies that have demonstrated an excellent track record in innovative marketing of digital products and services. Averaging 35 winners per year, the seal is a recognition for outstanding performance. Name: Apps Foundry Contest Country: Luxembourg The Apps Foundry Contest is a mobile app hackathon to deliver innovative apps meeting end-user satisfaction. App developers work in teams. The challenge consists in creating an app in 36 hours. Name: La French Tech Country: France La French Tech is a festival (first edition in 2014). The aim is to make the challenges for the French economy known to the general public, entrepreneurs, startups, ecologies,. In particular, it promotes events such as «le Futur en Sein» or «Startup Assembly», especially at a regional level. Page 14

15 2. Digital Entrepreneurship Scoreboard pilot run Page 15

16 Objectives/scope- Digital Entrepreneurship Scoreboard Supporting the development of the knowledge base on Digital Entrepreneurship OBJECTIVES SCOPE Present the performance of the enabling factors, a degree of digitalization of enterprises and ICT startup performance in EU 28 countries EU 28 countries, CIP participating countries and global competitors. In this pilot stage the focus will be mainly on indicators for the EU 28 countries Pilot run of the Digital Entrepreneurship Scoreboard 2013 Page 16

17 Conceptual Framework ENABLING DIMENSIONS DIGITAL KNOWLEDGE BASE AND ICT MARKET DIGITAL BUSINESS ENVIRONMENT ACCESS TO FINANCE DIGITAL SKILLS AND E-LEADERSHIP ENTREPRENEURIAL CULTURE Enhancing digital innovation and commercialisation and ICT sector Strengthening digital infrastructure, regulatory framework and ease of doing business Facilitating access to finance and enhancing digital investments Fostering E- Leadership skills through education and training Creating a supportive entrepreneurial culture Share of firms that are adopting/using four novel digital technologies and share of turnover from e- commerce Birth rate and employment shares of start-ups in the ICT sector Page 17

18 Selected indicators framework dimensions Framework dimensions PILLAR I PILLAR II PILLAR III PILLAR IV PILLAR V Digital knowledge base and ICT market Digital business environment Access to finance Digital skills and e- leadership Entrepreneurial Culture SPECIFIC European High Technology Patents per million inhabitants Number of Enterprises in Clusters - IT sector Business enterprise R&D expenditure in all NACE activities from high-tech sectors ICT sector (NACE Rev. 2) value added as a percentage of GDP Direct investment in the reporting economy (inward) in the Information and communication sector (sector J) (NACE Rev. 2) GENERIC Ease of Doing Business SPECIFIC Investments of telecommunications sector in networks as percentage of revenues %ge of enterprises who have ERP software package to share information between different functional areas %ge of enterprises using Customer Relationship Management to analyse information about clients for marketing purposes Internet bandwidth GENERIC Cost of Tax Compliance Total Tax rate Venture Capital Availability Ease of Raising Money Through Local Equity Markets Ease of raising money through loans SPECIFIC %ge of total persons employed that have ICT specialist skills %ge of enterprises that provided training to ICT/IT specialists to develop/upgrade their ICT skills %ge of enterprises that had no hard-to-fill vacancies for jobs requiring ICT specialist skills %ge of individuals who have obtained IT skills through formalised educational institution (school, college, university, etc.) GENERIC %ge of respondents that would prefer to be self-employed if they could choose between different kinds of jobs %ge of respondents that would set up a new business or take over an existing one if they had the means to start their own business, including sufficient funding. %ge of respondents that have a broadly favorable overall opinion about the Entrepreneurs Page 18

19 Selected indicators output dimensions Output dimensions DIMENSION I: DIGITAL TRANSFORMATION Digital penetration rates (measured as % of companies falling in the different following clusters) Share of Non Digital companies among all companies (incl. Government and healthcare sectors) Share of Digital Beginners among all companies (incl. Government and healthcare sectors) Share of Digital Followers among all companies (incl. Government and healthcare sectors) Share of Digital Mature among all companies (incl. Government and healthcare sectors) Share of Fully Digital among all companies (incl. Government and healthcare sectors) Within companies that adopted several digital solutions, combinations of solutions adopted by the different companies' clusters Percentage of companies adopting cloud solutions Percentage of companies adopting enterprise applications (CRM+ERP) Percentage of companies adopting other solutions in the public cloud Percentage of companies relying on social media for business purpose percentage of each of the 10 reasons that were given by the companies for adopting social media Percentage of companies adopting Big Data Percentage of companies adopting mobile solutions percentage of companies adopting mobile solutions for external usage Percentage of companies adopting mobile applications for internal usage DIMENSION II: ICT START-UPS Information and Communication Technology Birth rate Employment share of Information and Communication Technology enterprise %ge of turnover from e-commerce Page 19

20 Geographical mapping of the four enabling environments Page 20

21 The four environments exhibit distinct profiles in terms of performance in the 5 dimensions EU28 countries were clustered based on their similarities in the enabling dimensions performance The four environments exhibit distinct profiles and trends Page 21

22 Geographical mapping of the four enabling environments BEST ENABLING ENVIRONMENT GOOD ENABLING ENVIRONMENT High level of R&D expenditure, sound level of patenting activities, access to appropriate financial instruments and provision of highly specialized training Ease of doing business and access to the appropriate technological infrastructure MODERATE ENABLING ENVIRONMENT 1 Strong propensity to become entrepreneurs as witnessed by the entrepreneurial culture MODERATE ENABLING ENVIRONMENT 2 Good at developing e-skills and with a relatively good access to finance Page 22

23 Digital Transformation Companies in the 5 countries (IDC survey*) have just started the Digitalisation journey. Fully digital companies (adopting all the four digital technologies) represents a small share of the total market. Digital adoption rates vary strongly by company size. Most companies adopt standalone social media or cloud. Percentage of companies adopting digital technologies (IDC survey) Social Cloud Big Data Technologies Mobile solutions UK 34.4% 31.0% 14.3% 37.9% France 35.2% 29.4% 9.5% 33.4% Germany 29.4% 26.7% 6.1% 34.4% Italy 31.3% 16.7% 4.7% 17.9% Spain 36.4% 29.4% 4.3% 27.1% * Coverage IDC survey: France, Germany, Italy, Spain, UK Page 23

24 Concluding remarks Best enabling environments are able to prompt a virtuous circle- high returns on R&D investment tend to attract additional financial sources (increasing appeal for foreign investors to the country). Countries performing better in terms of enabling factors are the ones adopting faster digital technologies such as big data and mobile solutions There seems to be a connection between the geographical position of countries and quality of the enabling environment: Best enabling environment- concentrated Northern Europe Good environments- Central Europe Moderate environments- Peripheral countries Familiar digital technologies such as Social Media, Mobility and Cloud have greater adoption than Big Data. Industries dominated by large companies show a stronger digitalisation. Larger organisations show a greater adoption of big Data (sufficient infrastructure, specific IR role to focus on implementing Big Data sources and processes). Countries with a better enabling environment tend to have firms achieving better results in terms of e-commerce. Birth rate of start-ups is higher in countries with a stronger entrepreneurial culture and a moderate enabling environment. Page 24

25 Thank you for your attention Page 25

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