There are only three countries where labor productivity is above 60% of the EU-15 average: Cyprus, Slovenia and Hungary. On the other hand, the four poorest countries (Bulgaria, Romania, Turkey and Latvia) are also countries with labor productivity below 40% of the EU-15 average.
Access path and fixed line penetration rates
11 But the differences in the penetration rate of fixed lines (with the exception of Romania) are smaller than in the penetration of mobile telephony. This weak evolution of fixed line penetration has consequences for the NMS and ACC-3 countries.
Number of PCs in total population a. Methodological note
As a result, Cyprus, Malta and Slovenia have PC penetration rates close to the EU-15 average. On the other hand, most of the 13 countries analyzed still have significantly lower PC penetration rates, and the difference between the NMS & ACC-3 and EU-15 averages has not always decreased in recent years.
Internet Access in the household sector
On the other hand, the correlation is also strong between the number of households online and the level of fixed line penetration rates in the NMS and ACC-3: countries with a higher level of fixed line penetration have the highest share of the household sector connected to the Internet. While the static picture is rather negative and shows significant gaps with the EU-15, the dynamic analysis shows a steady growth in the number of households connected online to the Internet in the NMS and ACC-3.
Use of the Internet by the population a. Methodological note
There is no major difference in the growth rate of the Central European and South-East European countries in the sample. In South-Eastern European countries, the use of the Internet is very limited, as the share of the population that regularly uses it is around 10%, which is one fifth of the level observed in the EU-15.
Number of Internet hosts a. Methodological note
The countries at the top of the rankings (Estonia, Hungary and the Czech Republic) have recorded the fastest increase in the number of Internet hosts. In other countries, the number of Internet hosts barely exceeds 50,000, which is a small number indeed.
Public Access Points a. Methodological note
The development of public access points shows a similar division between NMS and ACC-3, as can be seen in the snapshot. This mixed rate of expansion explains why the average number of public access points in NMS & ACC-3 remains around 0.2 per 1000 citizens.
ISDN and broadband access a. Methodological note
Bulgaria has performed exceptionally well in ISDN line subscriptions, surpassing most accession and candidate countries. 14 This is partly due to the low level of broadband access and partly to the fact that technologies other than ISDN developed more quickly in these two countries.
Internet access prices a. Methodological note
In the case of the cost of a dial-up connection, the factors for the differences between countries are quite similar to the previous ones. Differences in dial-up costs are more important than those in income levels: market competition is also a factor.
Digital Divide a. Methodological note
In the EU-15 countries, the digital divide is decreasing, although according to the available data, very slowly. The indices of the digital divide among the leading new member states (Estonia, Czech Republic, Slovenia, Slovakia) are even better than in the less successful EU-15 member states.
IST indicators: a cumulative conclusion
Sixth, time series data show several positive developments in NMS and ACC-3, while the stock numbers reflect significant and sometimes widening gaps. Seventh, there are differences in the use of information and communication technologies by businesses, households and the public sector.
The share of ICT sector in output a. Methodological note
Some qualitative statements can be made about the nature of ICT production in NMS & ACC-3. First, in the most populous countries there is room for some locally owned companies to serve both global markets and stay competitive domestically with major multinational players.
The contribution of the ICT sector to exports a. Methodological note
The ICT sector represents an extremely high share (60%) of all export revenues in Malta, mainly due to the high level of production and exports of a large multinational manufacturer of microprocessors. These countries are increasingly facing the inflow of foreign capital associated with the establishment of centers for research and development, marketing and logistics, which have increased the added value of the production of the ICT sector.
The trade balance of the ICT sector a. Methodological note
The dynamic table presents the evolution of the trade balance of ICT sectors in absolute terms. The increasing trade deficit of Poland, Slovakia and the Czech Republic may represent the initial stage of expansion of the ICT sector, when it requires more imports than it produces exports, as initial investments have a high import content while export processing starts later .
The share of the ICT sector in employment a. Methodological note
Two factors account for the low share of the ICT sector in employment in NMS & ACC-3. Three countries have a large workforce in the ICT sector (Poland, Hungary and the Czech Republic), while the absolute figures for the others are very small.
ICT indicators: a cumulative conclusion
Third, the value and market share of the ICT sector in NMS & ACC-3 is much lower than in most individual EU countries and the EU-15 average. This also means that with Enlargement the ICT sector of the NMS and ACC-3 countries will not fundamentally change the size of the EU's contribution to ICT production worldwide.
The dynamics of economic growth
While EU membership for SHRA countries creates new opportunities (trade creation and growth) and binding policy constraints (Stability and Growth Pact), these exogenous or policy-driven shocks will also affect IS developments in the future short term. Two scenarios can therefore be equally envisaged: both the rapid capture of these countries, and the confounding of cases, where exogenous and policy-driven shocks constantly slow down and, in the worst case, even disrupt their achievement.
Restructuring: expanding service sector and reindustrialisation with remaining structural legacies
FDI had an observable and measurable impact on the economy as a whole, and within it on the competitiveness of the ICT sector, in countries of relatively small size21. In addition to the structural changes associated with the expansion of the service sector and reindustrialization, the growth of the ICT sector in some countries is indirectly influenced by the presence of industrial and agricultural legacies.
Sustainability of public finances and public sector reform
Privatisation and regulation
The main problem for the regulatory authorities was the limitation of the market power of the incumbent. A major reason behind these regulatory weaknesses has been the strong lobbying power of incumbents, which has prevented the adoption of appropriate regulations.
Financial sector development and its financing capacity for the ICT sector
Source: Eurostat, 2003. market capitalization/GDP) only 25% to 40% of the EU-15 level, which limits the financial intermediation of the banking sector and capital markets. The lack of long-term financing is the result of low and declining levels of savings, the weak ability of the banking sector to perform adequate manual restructuring, leading to the predominance of short-term and medium-term funds.
Proactive attitude of the private sector
This is the result of German-type financial development in the new Member States and the ACC-3 countries. Secondly, the banking sectors of the analyzed countries do not offer all the financing instruments available in the advanced countries, the most notable example being the financing of small and medium-sized enterprises.
FDI and the economic openness of the countries
The accession of ten of the thirteen countries analyzed to the European Union puts the evolution of foreign direct investments in the ICT sector in a different perspective. While the increase in such investments is likely, their structure remains uncertain: it strongly depends on the evolution of the competitive advantages of the new Member States and on changes in labor and capital costs, the supply and quality of human and physical capital.
Households consumption patterns and their changes
Consequently, the affordability of goods and services of the information society will improve and together with the increase in income and consumption will strongly contribute to the growth of their demand. The current weak and fragmented middle classes are expected to expand and this will lead to a broader based growth of information society related consumption.
Educational levels and supply of human capital
Although the current figures for the NMS and ACC-3 are favorable internationally, educational systems have several loopholes and problems, which could spill over into the information society in the medium term. Without adequate financing, the negative spillover effect of education loopholes will affect the quality of the education system and impact information society indicators.
In most cases, winner-take-all development trajectories have maintained (or even widened) gaps even at higher GDP growth. Existing social differences and gaps are other factors influencing the information society in the analyzed countries.
Demographic stocks and trends
Due to the presence of structural problems, the reform and rationalization of public services and the unequalizing effect of EU accession, it can be expected that most of the new Member States and the ACC-3 will face a period of increasing social disparities. The extent of this depends on the speed of structural adjustment and the ability of countries to draw on external resources, both private and public.
Summary and conclusions
The importance attached to the development of the information society on the political agenda is gradually changing. The first half of the 1990s was marked by the development of the information society on the political agenda.
Close reflection of eEurope initiatives in government policies. In the analysed countries the goals of national IS policies reflect the eEurope initiative and are in compliance with general European trends both
In the countries analyzed, the objectives of national IS policies reflect the eEurope initiative and are both in line with general European trends. Second, the low availability of financing to improve existing human and physical capital in government administrations has contributed to the disparities in IS development.
Fragmented direct IS policies. As IS policies have never been on the top of policy priorities they were generally treated as a residual and governments generally lacked an appropriate and coherent policy
It has also boosted competition to attract foreign direct investment, in general and in the ICT sector in particular. The role of technology in the economy, especially of ICT, has yet to be defined in terms of improved competitiveness.
Regulation and Competition policies: regulation and competition policies would have been the most important instruments but they have given insufficient support to IS developments in NMS & ACC-
In many countries, existing R&D budgets appear to be largely allocated to under-productive research institutions, and collaboration between public and private research, especially in market-oriented applications, is rare. The research and development sector needs to be restructured in line with the rethinking of innovation policy, a trend that is somewhat noticeable in most countries.
Education policy: Finally, the analysed countries have generally inherited well-developed and competent education systems, whose benefits are still observable, while there are numerous emerging
Regional policies: Another institutional weakness has been the absence of regions in the formulation of IS policies. This is indirectly related to the state of public finances and the lack of consensus on the amount.
Regional policies: Another institutional weakness has been the absence of regions in the formulation of IS policies. This is indirectly linked to the state of public finances and the lack of consensus in many
International Cooperation: At international level, the accession to the EU, together with the eEurope+ action plan and benchmarking exercise, have been important factors driving to the adoption of
This final chapter provides some thoughts on the most likely development trends in information society developments in the NMS & ACC-3, which will shape future policy goals and instruments. First, these agreements are presented, followed by an assessment of the policies that may be needed to make visible progress on the information society indicators.
ICT sector: The following major prospects regarding the ICT industry in New Member States and Candidate Countries by 2010, might be expected under a “business-as-usual” scenario (all equal
- The policy instruments
Governments in NMS & ACC-3 are linking their policies to the objectives of the eEurope 2005 strategies. 2004) Drivers and Influences in the Information Society: A Prospective Analysis in the Candidate Countries, Report on Romania, Draft, January.