deliverable - ict adoption study
TRANSCRIPT
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Study on ICT Adoption in Hong Kong SMEs
Final Report
Prepared for
Office of the Government Chief Information Officer The Government of Hong Kong Special Administrative Region
Prepared by
Ali Farhoomand PhD Professor of Innovation and Information Management
October 8 2009
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Table of Content
EXECUTIVE SUMMARY 1
1 INTRODUCTION 11
2 BACKGROUND 12
3 ASSESSING ICT ADOPTION IN HONG KONG SMES 14
31 The annual survey conducted by the CampSD in 2008 14 32 Additional literature review of ICT adoption by Hong Kong SMEs 17
4 RESULTS LITERATURE REVIEW OF ICT ADOPTION BY SMES IN OTHER COUNTRIES 20
5 CONCEPTUAL FRAMEWORK 27
6 OVERVIEW OF THE RESEARCH METHODOLOGY AND HYPOTHESES 33
7 ANALYSIS amp RESULTS BASED ON THE CampSD DATA 35
71 Analysis based on the ldquoAnnual Survey on IT Usage amp Penetration in the Business Sectorrdquo (ASIT) report 35 72 Analysis based on the ASIT report and Value Added obtained from the CampSD 38 73 Conclusions 38
8 OVERVIEW OF THE SURVEYS CONDUCTED BY HKU 40
81 Survey questionnaires 40 82 Telephonic case study interviews 42 83 Literature review of similar experiences across the world 42 84 Selection of sectors 42
9 RESULTS ANALYSIS OF THE SURVEY QUESTIONNAIRES 44
91 Usage of Personal Computers (PCs) ndash Stage 1 47 911 Not Using PCs 47 912 Using PCs 50 913 Value Added from PC Usage 52 914 Relationship between Perceived Value and PC Usage 53 915 Summary of findings for Section 91 ndash Stage 1 54
92 Usage of the Internet ndash Stage 2 55 921 Not Using the Internet 55 922 Using the Internet 57 923 Value Added by Internet Usage 59 924 Relationship between Perceived Value and Internet Usage 60 925 Summary of findings for Section 92 ndash Stage 2 61
93 Usage of a Website ndash Stage 3 62 931 Not Using a Website 62 932 Respondents Having a Website 66 933 Value Added from Having a Website 66
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
934 Relationship between Perceived Value and Website Usage 67 935 Summary of findings for Section 93 ndash Stage 3 68
94 Integration of the Website 69 95 Perceptions of Overall ICT Usage and Value Added 69 96 Relationships between Overall Value and Extent of ICT Use 70 97 Stages of ICT Development 71
971 Government Support 71 972 Reasons for Not Using ICT 72 973 ICT Value 73
98 Factors Influencing ICT Adoption 75 981 Value Added as a Function of ICT Usage Size Age Stage and Sector 75 982 Revenue as a Function of ICT Usage Size Age Stage and Sector 75
99 Predictors of ICT Adoption 76 991 PC Adoption 76 992 Internet Adoption 76 993 Website Adoption 77
910 Performance Differences between ICT Adopters and Non-Adopters 77 911 Hypotheses 78
10 SELECTED INDUSTRIES CASE STUDIES AND COMPARISONS WITH OTHER COUNTRIES 81
101 WholesaleRetail Sector 81 102 Import and Export Trade 87
1021 Import and Export Trade - Consumer non-durable goods 87 1022 Import and Export Trade - Consumer durable goods 92 1023 Import and Export Trade ndash Miscellaneous 98
103 Business Services 103 104 Manufacturing Sector 107
11 FINDINGS amp RECOMMENDATIONS 114
111 Prior to Stage 1 PC Non-Adopters 114 112 Stage 1 PCs Adopters Who Have Not Yet Adopted the Internet 115 113 Stage 2 Internet Adopters who have not yet adopted the Web 117 114 Stage 3 Adopters of the Web 119 115 Overall ICT Usage and Value Added 120 116 Differences in ICT Adoption across Stages of ICT Development 120 117 Value added as a function of ICT usage size age stage and sector 121 118 Revenue and ICT usage size age stage and sector 121 119 Predictors differentiating ICT adopters from non-adopters 121
APPENDICES 123
Appendix 1 SMEs Stages of Growth 123
Appendix 4 Weights assigned to the questions selected for each stage of ICT Usage calculation from the
Appendix 5 Details of the questions selected for calculation of ICT Usage from the ASIT Report based
Appendix 2 Calculation of ICT Usage 125 Appendix 3 Analysis of the questions selected for calculation of ICT Usage from the ASIT Report 127
ASIT Report 141
on the Codes available at CampSD 148 Appendix 6 Number of sampled establishments [1] in 2008 ASIT with PC and Internet connection 155 Appendix 7 Analysis of CampSD data ndash ICT Usage across Industries 157 Appendix 8 Value Added of Small and Medium Enterprises (SMEs) by select industry sector 2007 164
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 9 Mail survey in English 165
Appendix 17 Use of Personal Computers (PCs) - Not using PCs - How important are the following
Appendix 19 Use of Personal Computers (PCs) - Do you think that using PCs would help improve the
Appendix 20 Use of Personal Computers (PCs) - What would really motivate or push you to use PCs
Appendix 10 Mail survey in Chinese181 Appendix 11 Telephone interview guidelines 196 Appendix 12 Online survey in English 198 Appendix 13 Online survey in Chinese 208 Appendix 14 Data Merge and Transformation for further analysis 217 Appendix 15 RevenueSales in the last fiscal year ndash by industry size and age 219 Appendix 16 Use of Personal Computers (PCs) - Does your firm use Personal Computers (PCs) 221
reasons for your firm not to use PCs 222 Appendix 18 Use of Personal Computers (PCs) - Not using PCs - ANOVA 223
operations of your firm If so how 226
230 Appendix 21 Use of Personal Computers (PCs) - How useful would the following types of Government support be to your firm for installing and using computers 234 Appendix 22 Use of Personal Computers (PCs) - How useful would the following types of Government
Appendix 23 Use of Personal Computers (PCs) - Using PCs - Please mark the extent to which your firm
Appendix 24 Use of Personal Computers (PCs) - Using PCs - Please mark the extent to which your firm uses software for the following tasks ndash ANOVA across Industry Number of Employees Age of the firm
support be to your firm for installing and using computers - ANOVA 235
uses software for the following tasks 239
241 Appendix 25 Use of Personal Computers (PCs) - Using PCs - The extent to which the firm uses the following tailor-made computer systems of FinanceAccounting PurchasingSale and order processing HRMTraining 253 Appendix 26 Use of Personal Computers (PCs) - Using PCs - The extent to which the firm uses the following tailor-made computer systems of FinanceAccounting PurchasingSale and order processing
Appendix 27 Use of Personal Computers (PCs) - Using PCs - How much value do you think PCs have
Appendix 28 Use of Personal Computers (PCs) - Using PCs - How much value do you think PCs have
Appendix 31 Use of the Internet - Internet Usage - Not using Internet How important are the following
Appendix 32 Use of the Internet - Internet Usage - Not using Internet How important are the following
Appendix 33 Use of the Internet - Internet Usage - Not using Internet Do you think that using the
Appendix 34 Use of the Internet - Internet Usage - Not using Internet What would really motivate or
Appendix 35 Use of the Internet - Internet Usage - Not using Internet How useful would the following
Appendix 36 Use of the Internet - Internet Usage - Not using Internet How useful would the following
Appendix 37 Use of the Internet - Internet Usage - Using Internet Please mark the extent that your firm
HRMTraining ndash ANOVA 254
added to the following aspects of your business 259
added to the following aspects of your business - ANOVA 260 Appendix 29 Correlations of VA1 and ICTU1 268 Appendix 30 Use of the Internet - Internet Usage - Does your firm use the Internet 279
reasons for your firm not to use the Internet 280
reasons for your firm not to use the Internet - ANOVA 282
Internet would help improve your business If so how 287
push you to use the Internet 289
types of Government support be to your firm for using the Internet 290
types of Government support be to your firm for using the Internet - ANOVA 291
uses the Internet for the following purposes 295
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 38 Use of the Internet - Internet Usage - Using Internet Please mark the extent that your firm uses the Internet for the following purposes - ANOVA 296 Appendix 39 Use of the Internet - Internet Usage - Using the Internet Do you think that using the
Appendix 40 Use of the Internet - Internet Usage - Using the Internet How much value do you think the
Appendix 41 Use of the Internet - Internet Usage - Using the Internet How much value do you think the
Appendix 44 Website Usage - Not using Website How important are the following reasons for your
Appendix 45 Website Usage - Not using Website How important are the following reasons for your
Appendix 46 Website Usage - Do you think that creating a website would help improve your business
Appendix 48 Website Usage - Not using Website How useful would the following types of Government
Appendix 49 Website Usage - Not using Website How useful would the following types of Government
Appendix 50 Website Usage - Using Website Please mark the extent that your firm uses its website for
Appendix 51 Website Usage - Using Website Please mark the extent that your firm uses its website for
Appendix 52 Website Usage - Using Website How much value do you think your website has added to
Appendix 53 Website Usage - Using Website How much value do you think your website has added to
Appendix 55 Integration of the Website - Is your firms websitewebpage integrated with the firmrsquos
Appendix 56 Integration of the Website - Is your firms websitewebpage integrated with your business
Appendix 57 Overall ICT Usage - Overall to what extent do you feel that your firm currently uses ICT
Internet more would help improve the business of your firm If so how 308
Internet has added to the following aspects of your business 314
Internet has added to the following aspects of your business - ANOVA 315 Appendix 42 Correlation between VA2 and ICTU2324 Appendix 43 Website Usage - Website Usage - Does your firm have website 333
firm not having a website 334
firm not having a website ndash ANOVA 336
If so how 343 Appendix 47 Website Usage - What would really motivate or push you to create a website 350
support be to your firm for creating a website 357
support be to your firm for creating a website - ANOVA 358
the following purposes 362
the following purposes ndash ANOVA 364
the following aspects of your business 377
the following aspects of your business ndash ANOVA 379 Appendix 54 Correlation of VA3 and ICTU 3 393
database 398
partnersrsquo database399
400 Appendix 58 Overall Value Added ICT Usage - Overall to what extent do you feel that using more ICT would increase the value added to your firm 402 Appendix 59 Overall ICT UsageValue Added - Overall to what extent do you feel that your firm currently uses ICT Overall to what extent do you feel that using more ICT would increase the value added to your firm ndash ANOVA 404 Appendix 60 Overall ICT UsageValue Added ndash Regression Analysis 410 Appendix 61 Overall ICT UsageValue Added ndash Revenue Regression Analysis ndash Composite Indices 451 Appendix 62 Stages of ICT Development ndash Differences in Government Support 492 Appendix 63 Stages of ICT Development ndash Reasons for Not Using ICT 522 Appendix 64 Stages of ICT Development ndash Differences in Value added from ICT 554 Appendix 65 Regression between Value added and ICTU Size Age Stage and Sector 587 Appendix 66 Regression between Revenue and ICT Usage Size Age Stage and Sector 590 Appendix 67 Discriminant Analysis 592 Appendix 68 Performance Differences between ICT Adopters and Non-Adopters 632
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
EXECUTIVE SUMMARY
I Objective
This Study titled ldquoStudy on Information and Communications Technology Adoption in Hong Kong Small and Medium Enterprisesrdquo has been undertaken by the University of Hong Kong at the behest of the Office of Government Chief Information Officer (ldquoOGCIOrdquo) The study aims at providing a better understanding of the extent of ICT adoption in Hong Kong SMEs and the barriers and motivators both perceived and actual for the SMEsrsquo ICT adoption It also provides recommendations to the OGCIO the strategies and measures to encourage SMEs to use and benefit from ICT
II Conceptual Framework
Our review of existing research showed that most studies on the adoption and use of ICT by SMEs were piecemeal and examined only parts of the complex tapestry that composes the SMErsquos ecosystem In this Study we have drawn on our previous work done in this area and by refining a holistic and integrated framework of key issues facing SMEs we have tried to ensure that all the key issues that confront SMEs during different stages of their development at enterprise industry and national levels along with the various socio-economic dimensions were addressed in a systematic and comprehensive manner
We have defined the following three stages of ICT Usage and used this as a basis for our research methodology
Stage 1 Localised Exploitation (PCs) amp Internal Integration Stage 2 Web presence (Internet Connection) amp Online Transaction Stage 3 External Integration (Electronic value chain) amp Transformation
III Research Methodology
We have conducted a multi-pronged approach to undertake this study After carrying out a comprehensive review of literature and study we identified the factors facilitating or hindering the adoption and use of ICT among SMEs We then posited several hypotheses subsequent to which a synthesis of the literature combined with the relevant statistical data allowed us to modify our conceptual framework to develop a structural model of factors leading to the adoption or inhibiting the adoption of ICT
We first analysed the existing data available on ICT adoptions by Hong Kong SMEs which included statistical analysis based on the survey data (including IT usage data from
1
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
business IT survey and business operating data from annual economic surveys) provided by the ldquoCensus amp Statistics Department Hong Kong SARrdquo (ldquoCampSDrdquo)
We also conducted our own surveys through mail survey large-scale telephone survey and email survey
Based on the results of the CampSD analysis the preliminary results of our own survey and the economic contribution of an industry we selected some industry sectors for in-depth study and in-depth interviews These have been detailed as case studies and have been used to complement our quantitative findings
The advantage of this multi-pronged approach is that it provides a richer picture of the issues surrounding the adoption of ICT by SMEs in Hong Kong
IV Data Collection
We have conducted a multi-pronged approach to undertake this study
We first conducted our analysis at the CampSD where we found a correlation between ICT Usage and the number of employees at a firm More important we found a significant correlation between the Value Added and the ICT Usage in the WholesaleRetail sector
Then based on the literature review and our findings at the CampSD we commenced the administration of a survey questionnaire as follows
bull Mail questionnaire The mail questionnaire was prepared in both Chinese and English and a total of 10000 questionnaires were sent out
bull Telephone interviews Large-scale telephone interviews were conducted and a total of 1000 telephone interviews were made
bull Email surveys We also sent out 3900 e-mail surveys to the SMEs with email address in both English and Chinese
Over and above a detailed research of literature available for the adoption of ICT by SMEs across the world was carried out to see if there are similar experiences in other parts of the globe
Based on our analysis at the CampSD we had identified the WholesaleRetail sector as showing a significant correlation between the Value Added and the ICT Usage In addition we had also decided to focus on the ImportExport Trade sector (further sub-
2
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
divided into three parts) as this contributes almost half of the Value Added of SMEs to the Hong Kong economy Further preliminary analysis based on our analysis of the survey responses showed a significant correlation between revenue and extent of ICT use for Business Services sector Hence this sector was also selected for further investigation It was decided that an in-depth interview would be conducted for two SMEs in each of the above sectors as well as the manufacturing sector Hence in all there were twelve interviews conducted and the findings have been reported as qualitative case studies to complement our quantitative findings
V Results of the Analysis
One of the most significant questions raised by the Study was deciding where the Government should intervene to promote ICT Usage In other words we were looking for those industries where ICT usage has shown a significant correlation with the value addedrevenue for the industry This was found to be the WholesaleRetail sector and the Business Services sector Further as analysis showed that the ImportExport Trade sector contributed 48 of the value added of SMEs in Hong Kong this too was included in the survey
We next attempted to answer some key questions
Do ICT users believe ICT can add value
We wanted to know if the overall perceived value of ICT is dependent on the extent of ICT use We found that the respondents saw a very clear connection between the perceived overall value of ICT and the overall extent of ICT use
How is revenue related to ICT use size age stage and sector
To answer this question we performed regression analysis between revenue1 and ICT usage size age stage and sector We found as expected a significant relationship between revenue and size with the larger the firm having higher revenue We also found a significant relationship between revenue and stage of ICT usage with a higher stage showing higher revenue
There was however no significant relationship between revenue and ICT usage or with the firmrsquos age When using revenue as the dependent variable we found no significant relationship between revenue and sector with the only exception being the Import amp Export ndash Consumer durable goods
1 For the purpose of this report ldquoRevenuerdquo refers to the responses received to the survey question ldquoTotal revenuesales in the last fiscal yearrdquo
3
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Are there different reasons for not adopting PCInternetWebsite
We checked to see if there are differences in responses across the three stages of ICT development with regard to issues related to reasons for not using different types of ICT (PCs the Internet Website) and government support that would facilitate and encourage ICT adoption at the three stages We also took into account the firmrsquos age size and sector and further examined the effect of the stage of ICT development on perceived value of ICT taking into consideration these variables
We found that by and large there are no differences between responses regarding the various types of Government support reasons for not using ICT and the value-adding effect of ICT at different stages of ICT development One exception though relates to the importance of providing tax incentive which is significantly different at the three different stages of development with non-PC users perceiving it to be more important than non-Website users than non-Internet users Another exception relates to difficulty in finding trained personnel at different stages of development with non-Website users perceiving this factor more important than non-PC users than non-Internet users
We also found that that by and large SMEs see different value in ICT at different stages of ICT development For instance the value of ICT in terms of improving operational efficiency and customer services is highest among PC users followed by Internet and website users Further the value of ICT in terms of increasing sales penetration into new markets and providing competitive advantage is highest among PC users followed by Website users and then Internet users Website users see higher value in ICT than Internet users in terms of creation of new productsservices
Is value added related to ICT usage size age stage and sector
We found that there was a significant and direct relationship between value added2 and ICT usage This was also true for the value added and stage of ICT usage with highest value added perceived in the Website stage There was also a significant relationship between value added and age with newer firms seeing greater value added than the older ones There was however no significant relationship between value added and size
Are there any key predictors differentiating ICT adopters from non-adopters
2 For the purpose of this report ldquoValue addedrdquo refers to the responses received to the survey question of the type ldquoHow much value do you think PCs have added to the following aspects of your businessrdquo This question was repeated for each stage that is ldquoHow much value do you think the Internet has added to the following aspects of your businessrdquo and ldquoHow much value do you think the Website has added to the following aspects of your businessrdquo
4
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
We tried to ascertain the influential predictors of ICT adoption at various stages of adoption
First for PC adoption we used revenue size and age as predictors of PC adoption We found that these three independent variables did not have the predicting power to discriminate between PC adoptersnon adopters However when we repeated the above analysis by including sector as an additional predictor we found a significant model where PC adoption is inversely related to revenue and size Further PC adoption is more likely among firms that are between 3-7 years old
We repeated the analysis for Internet adoption but we also included the level of PC usage as an additional predictor We found a significant model where Internet adoption is directly related to PC usage inversely related to revenue and size and firms that are between 3-7 years old
We repeated the analysis for Website adoption but we also included the level of PC and Internet usage in addition to revenue size age and sector We found a significant model where Website adoption is directly related to PC and Internet usage directly related to revenue and size and more likely among firms less than 3 years or those over 7 years old than those 3-7 years old
In sum when we used revenue size age sector and prior usage of ICT as predictors we found that
bull PC and Internet adoption is more likely among small firms while Website adoption more likely among large firms
bull PC and Internet adoption is more likely among firms 3-7 years old while Website adoption more likely among very young or old firms
bull Both Internet adoption and Website adoption are influenced by prior usage of ICT Internet adoption is directly related to PC Usage and Website adoption is directly related to PC and Internet Usage
Are there any missed opportunities
We tried to see if there are any performance differences between ICT adopters and non-adopters This would help answering the question of whether or not some SMEs missed opportunities by not adopting ICT
For each of the three stages of the adoption we used revenue as a proxy for the firmrsquos performance Beside one exception (ImportExport (Consumer durable goods)) with regard to Website adoption we found no significant difference in revenue between ICT
5
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
adopters and non-adopters indicating that by and large there doesnrsquot seem to be any ldquomissed opportunityrdquo among the non-adopters
Findings related at different stages of ICT adoption
(i) Findings related to those not using personal computers
We found that the most important reason for not adopting a PC appears to be SMEsrsquo perception that they do not really need it They feel that they have managed well without a PC so far and see no need to make such an investment that would be difficult and expensive to maintain These perceptions were similar across all sectors size and age of the firm Lack of awareness of the benefits of PCs is in reality a great barrier to these firms
For those respondents who agreed that the use of PCs could be advantageous the main perceptions of its benefits revolve around its expected speed accuracy and efficiency
The primary motivator to adopt a PC was stated to be a business needrequirement for it The other popular facilitator mentioned was addressing the expense of the ICT investment (providing financial support and an inexpensive PCpackage) while the third most important was technical support
In terms of government support subsidising training in the use of PCs (which addresses both the knowledge and cost barriers) and providing PC adoption consulting services were the most popular suggestions We also observed that the younger firms found subsidising training in using PCs providing PC adoption consulting services and providing tax incentives to be far more useful than the older firms
(ii) Findings related to those using personal computers
We found that companies that only use PCs and not the Internet largely restrict their use to word processing computer security and spreadsheet software The comparatively more technically advanced packages or custom-made software such as HRMtraining and presentation are the least popular Custom-based packages too are not very popular However the use of software packages and custom-based packages differs across industries
6
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
The size of the firm also appears to be an inhibitor to using advanced PC software such as finance sales and HRM packages We noted that the usage of these as also custom-based packages increases with an increase in the number of employees
Improving operational efficiency and customer service are the two top value additions made by the use of PCs Overall we found a correlation between perceived value of PCs to the business and the extent to which firms use them This has important policy implication as it highlights the importance of education among PC users about benefits of other types of ICT such the Internet
(iii) Findings related to those not using the Internet
The most popular responses for not using the Internet was that it was not needed that it is costly and that the firmrsquos business partners and customers are not using the Internet Further on the whole in response to our interviews and case studies we found that most respondents were disinterested in adopting the Internet as they thought that it would not help improve their business This would suggest that a lack of business need combined with a lack of awareness of the benefits of the Internet is the reason these respondents have not opted for the Internet
Addressing this lack of awareness and knowledge of the benefits and costs of the Internet is the greatest support requested from the Government and hence providing consulting services and subsidising training were the most popular suggestions of the types of support that Government can provide
(iv) Findings related to those using the Internet
We found that the most popular uses of the Internet are e-mail and on-line sourcing of general information applications that do not require a Website We also found that some companies especially the young ones use the Internet for e-banking The respondents were also asked if they perceived additional use of the Internet would further improve their business The responses are mixed with almost half stating that more Internet usage would not help improve their business while the other half felt that it would
Those who saw the potentials of the Internet identified speedy communication and ease of searching for information and improvement in marketingsales development as areas with greatest potential As in the case of PCs improving operational efficiency and enhancing customer service are perceived to be the two top values ensued by the use of the Internet Providing competitive advantage and prompt response to market changes are the next most popular perception of where Internet use adds value to the business
7
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
We noted significant differences in the perception of value added across sectors and according to the age of the firm across all dimensions For instance the perception that the use of the Internet had improved customer service was far more pronounced in the Business Services sectors as compared to the WholesaleRetail sectors Similarly the value added by improving operational efficiency due to Internet usage is perceived to be significantly higher by the newer companies as compared to the older ones
(v) Findings related to those not using a Website
The following reasons are mentioned as to why the firm do not create a Website lack of business need difficulty of maintenance costs lack of industry critical mass Through our interviews we further collaborated these findings as we noted that non-adoption of a Website had to do with the fact that the businessmarket had not yet evolved sufficiently for a great need of a Website and the expense associated with creating and maintaining a Website perceived to be high
Once again as in the case of PC and Internet use it appears that business needs would be the main driver for creating a Website Addressing the technical and financial constraints are the other two prime motivators
We observed no significant differences about the reasons for not having a Website across different industries or based on the firmrsquos size or age
In terms of the types of support offered by the Government to motivate these firms to create a Website subsidising ICT training providing ICT adoption consulting services and providing tax incentives for ICT investments were the most popular
(vi) Findings related to those using a Website
The most popular uses of the Website are for ldquoProviding information on the firms products and servicesrdquo followed by ldquoHandling of business enquiryrdquo
Similar to the usage of PCs and the Internet improving operational efficiency and customer service are the two top dimensions of having a Website
However unlike the PC and the Internet we found no evidence of any correlation between perceived value of a Website to the business and the extent to which firms use a Website
VI Recommendations
Related to the use of personal computers
8
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull We did not find any connection between PC adoption and revenue (as a proxy for the firmrsquos performance) indicating that doesnrsquot seem to be any missed opportunities with regard to ICT adoption However if the Government decides to embark on any assistance program we recommend that it should first focus on the WholesaleRetail Business Services and ImportExport Trade industries as they either contribute a large amount to the value added of SMEs in Hong Kong or show significant correlation of value addition with ICT Usage
bull Moreover for non-PC users we recommend that the Government assistance should focus on subsidising training in the use of PCs and providing PC adoption consulting services This group looks for Government support primarily in terms of building knowledge and awareness Providing tax incentives for ICT investment should also be helpful
bull We also recommend that while providing Government support the focus should be on smaller firms and the firms that are between 3-7 years old as these appear more likely to the idea of investing in PCs
bull While promoting the benefits of using PCs the Government must consider the specific needsbarriers and facilitators for the industry
Related to the use of the Internet
bull We did not find any connection between Internet adoption and revenue indicating that there doesnrsquot seem to be any missed opportunities with regard to ICT adoption However if the Government decides to embark on any assistance program we recommend that Government assistance should concentrate on subsidising training in the use of the Internet and providing Internet adoption consulting services Such training workshops should highlight the potential costs and benefits of the Internet as lack of awareness is a main inhibitor
bull We also recommend that while providing Government support the focus should be on smaller firms those that are between 3-7 years old and firms that are high users of PCs
bull To promote the benefits of adopting the Internet we also recommend that the focus be on the speedy and cheap communication and ease of information availability as these were rated by far the most useful benefits
Related to the use of a Website
9
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Beside one exception (ImportExport (Consumer durable goods)) we did not find any connection between Web adoption and revenue indicating that by and large there doesnrsquot seem to be any missed opportunities with regard to Web adoption However if the Government decides to embark on any assistance we recommend that the Government should promote the benefits of creating a Website by emphasising its use in marketingsales development
bull We also recommend that while providing assistance the focus should be on larger firm those firms less than 3 years or over 7 years old and firms that are high users of PCs and the Internet
bull As in the case of promoting PC and Internet usage we recommend that the Government assistance should focus on subsidising ICT training and providing ICT adoption consulting services and consider providing tax incentives for ICT investment
10
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
1 INTRODUCTION
In its 2008 Digital 21 Strategy the blueprint for Hong Kong ICT development the Government of the Hong Kong Special Administrative Region (the ldquoGovernmentrdquo) acknowledged the contribution of ICT to local economic development Nonetheless according to the annual survey on IT Usage and Penetration conducted by the Census and Statistics Department (ldquoCampSDrdquo) despite the increasing use of ICT in the business sector in Hong Kong there is a gap of ICT use between large companies and SMEs
To address this concern the Office of Government Chief Information Officer (ldquoOGCIOrdquo) issued a Consultancy Brief for a project titled ldquoStudy on Information and Communications Technology Adoption in Hong Kong Small and Medium Enterprisesrdquo The study aims at providing a better understanding of the degree of ICT adoption in Hong Kong SMEs including the barriers for SMEsrsquo ICT adoption and its economic impact It will help formulate strategies and measures to encourage SMEs to use and benefit from ICT More specifically the study will shed light on all issues related to adoptionnon-adoption of ICT among Hong Kong SMEs taking into account differences in industry sectors The study will also try to provide a deeper understanding of the perceived benefits of and barriers to ICT adoption so as to ascertain whether small firms make well-informed business decision towards ICT adoption
On 13 January 2009 the project was assigned to the University of Hong Kong An Inception Report was prepared which listed out a number of hypotheses However subsequent to the suggestions arising from the meeting with the OGCIO and the members of the Digital Inclusion Task Force on March 13 2009 the scope of the study was refined The conceptual frameworks were revisited to incorporate a SME stage growth model which would reflect the differences in strategic focus problems and potential values at different levels of ICT use and sophistication Further a more detailed repository of the factors that lead to ICT adoption by SMEs was incorporated
An Interim Report providing a status update of the progress of the Study since the Inception Report was presented to the OGCIO on August 20 2009
This Final Report is the conclusive document which details the research methodologies that have been defined for the Study along with details of the quality control mechanism response rate sampling design and pilot survey It demonstrates the flow in which the conceptual framework and literature review have been used to define the research methodology It provides details of the work done which includes the study of the existing statistical data received from the CampSD the on-site data analysis in the CampSD office and the data collection logistics and methods used for analysis for the surveys
11
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
conducted by the HKU It finally proposes a set of recommendations to address the above issues
2 BACKGROUND
Across the world it has been recognised that small and medium-sized enterprises (SMEs) are todayrsquos main engine of economic growth It is estimated that SMEs contribute to 815 of global economic growth 3 For example in Hong Kong alone more than 260000 Hong Kong SMEs accounting for 98 of business establishments provide about 12 million jobs or half of the total non-government employment4
The creation of SMEs may bring about the reinforcing dynamics of economic growth That is an increase in the total number of SMEs in an economy would increase job creation and job per capita When people become wealthier they would increase their consumption which in turn would open up new market opportunities to entice the creation of more businesses
SMEs are also entrepreneurial and flexible in nature thereby improving a nationrsquos innovative capacities5 They also contribute to the reinforcing loop of innovation that drives economic growth As the number of SMEs in a particular sector increases and they become more knowledgeable of their product and industry they can become more innovative and thus more profitable This profitability would then encourage more people to establish their own businesses6 From the governmentrsquos perspective SMEs are not only an important source of tax revenues but are also critical to societyrsquos stability by providing job opportunities thus contributing to the creation of wealth
Besides their importance in the domestic market SMEs can also be considered an engine for international development and the growth of exports This is particularly evident in
3 Jutla D Bodorik P and J Dhaliqal (2002) Supporting the e-business readiness of small and medium sized enterprises approaches and metrics Internet Research Electronic networking Applications and Policy 12(2) pp139-164
4 Trade and Industry Department ndash Support and Consultation Centre for SMEs (29 Dec 2008) ldquoSMEs in HKrdquo httpwwwsuccesstidgovhkenglishlin_sup_orggov_depservice_detail_6863html
5 Anderson AR J-H Li RT Harrison and PJA Robson (2003) The increasing role of small business in the Chinese economy Journal of Small Business Management 41(3) pp310-316
6 Kotelnikov V (2007) Small and Medium Enterprises and ICT UNDP-APDIP and APCICT
12
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
the East and Southeast Asia economies such as South Korea Indonesia Taiwan Hong Kong and Singapore7
In light of the above it is hence not surprising that governments around the world are keen to find ways to facilitate the development of SMEs ndash and among other initiatives through the effective adoption and utilisation of ICT Even though there is a lack of consensus as to how ICT investment and firm performance is linked there seems to be three general categories of the potential benefits of ICT adoption by SMEs8
First ICT can be of strategic importance to a SME Todayrsquos globalised economy has created an increasing need for SMEs to access and use ICT and their ability to do so will determine their success in regional and global business networks9 Second the use of ICT can improve the SMEsrsquo operational efficiencies Third ICT can help increase the organisational transparency of SMEs to internal and external stakeholders by facilitating communication within and between firms10
7 Tambunan T (2008) SME development economic growth and government intervention in a developing country The Indonesian story Journal of International Entrepreneurship 6 pp147-167
8 Farhoomand A and Huang M ldquoDoes IT pay off The tale of two banking giants strategiesrdquo Proceedings International Conference on Information Systems Montreal Canada Dec 2007
9 Chacko JG and G Harris (2005) ICT and small medium and micro enterprises in Asia Pacific ndash size does matter Journal of IT for Development March
10 Street and Meister (2004) Small Business Growth and Internal Transparency MIS Quarterly 28(3) define transparency as follows ldquoFrom the accounting and finance perspective transparency refers to the observability of transactions for both investment and regulatory purposes From the supply chain management perspective transparency refers to information exchange between supply chain partners From the marketing perspective information flow from the customer is seen to be valuablerdquo
13
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
3 ASSESSING ICT ADOPTION IN HONG KONG SMES
31 The annual survey conducted by the CampSD in 2008
According to the categorisation done by the Government of Hong Kong11 manufacturing enterprises with fewer than 100 employees and non-manufacturing enterprises with fewer than 50 employees in Hong Kong are defined as SMEs
The annual survey conducted by the Hong Kong CampSD in 2008 brought to light the following observations related to the ICT adoption among Hong Kong SMEs12
First compared to larger enterprises fewer SMEs have exploited the ICTs Fewer SMEs have personal computers local area network (LAN) connection intranet and extranet than large enterprises (Table 1)
Size of Establishments
Penetration rate
Large Medium Small
Personal computers
991 917 584
LAN Connection 842 572 224
Intranet 643 292 73
Extranet 286 104 32
Table 1 ICT Penetration Rates by Firm Size
Moreover SMEs are less likely to use the Internet to collect and disseminate information than large enterprises (Table 2)
11 httpwwwsuccesstidgovhkenglishlin_sup_orggov_depservice_detail_6863html 12 Report on 2008 Annual Survey on Information Technology Usage and Penetration in the Business Sector
Census and statistics Department HKSAR
14
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
15
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Size of Establishments
Internet use
Large Medium Small
WebPageswebsites 753 450 145
Use industry portal sites 220 160 108
Table 2 Use of the Internet Resources by Firm Size
Second ICT adoption and usage varies among SMEs in different sectors (see Table 3) Compared to other industry sectors the financing insurance real estate and business services sector has the highest adoption rates in all four categories and the transport storage and communications sector has the lowest
of establishment having
Industry Sector
PCs Internet Connection
Webpage websites
Electronic Business
Financing insurance real estate and business services 835 792 243 804
Wholesale retail and import and export trades restaurants and
hotels 653 618 209 622
Community social and personal services
602 505 160 523
Construction 548 464 62 458
Manufacturing electricity and gas 522 510 176 502
16
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Transport storage and communications
320 307 64 321
Table 3 Usage and Penetration of ICTs in SMEs by Industry Sector
The above survey proved to be a valuable document to base our research methodology
Existing literature also suggests that the role of government in facilitating ICT adoption in SMEs seems to be indirect13 In spite of government initiatives to encourage Internet adoption by SMEs around the world and the SMEsrsquo desire for government influence and regulation14 there is little evident that these policies are particularly successful in directly changing attitudes among SMEs15 At most governments could influence SMEsrsquo ICT adoption and diffusion by improving telecommunication infrastructure and making policies with regard to subsidies and mobilisation16 17
32 Additional literature review of ICT adoption by Hong Kong SMEs
In addition to the annual survey conducted by the Hong Kong Census and Statistics Department there are several other studies that have assessed the ICT adoption among Hong Kong SMEs
bull The Hong Kong Productivity Council (HKPC) carries out a series of surveys18 19 In a study of IT purchasing behaviours in Hong Kong SMEs through telephone interviews with 500 local SMEs from 10 industry sectors with in-house server systems the two most cited barriers for adopting an in-house server system were lack of internal technical expertise and budget constraint20 This study urges SMEs to look beyond the systemrsquos initial acquisition costs and consider other cost factors (such as
13 Scupola A (2009) SMEsrsquo e-commerce adoption perspectives from Denmark and Australia Journal of Enterprise Information Management 22(12) pp 152-166
14 Scupola A (2003) Government intervention in SMEs e-commerce adoption an institutional approach Proceedings of the 7th Pacific Asia Conference on Information Systems 10-13 July Adelaide Australia pp184-195
15 Beckinsale M and M Levy (2004) SMEs and Internet adoption strategy who do SMEs listen to Proceedings of European Conference on Information Systems
16 Lau ASM and VWS Kwok (2007) How e-government strategies influence e-commerce adoption by SMEs Electronic Government 4(1) pp20-42
17 Scupola A (2003) Government intervention in SMEs e-commerce adoption an institutional approach Proceedings of the 7th Pacific Asia Conference on Information Systems 10-13 July Adelaide Australia pp184-195
18 Chan W (1999) Barriers and Solutions to Increase IT Application for SMEs HKPC 19 Tang TKY (2003) Hong Kong productivity council ndash the I-hub of productivity in Hong Kong Journal
of Materials Processing Technology 139(1-3) pp596-603 20 httpwwwhkpcorgtextengindustry_surveyall_industriesit_purchasingjsp
17
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
running costs) risk and business flexibility In another study of mould management SMEs HKPC found that most respondents expected to benefit from computerisation through saving time engaging less staff and enhancing work efficiency and
21accuracy
bull The Information Security Survey jointly conducted by the OGCIO the HKPC and the Commercial Crime Bureau of the Hong Kong Policy Force found that compared to large companies SMEs are less proactive in implementing a comprehensive security management strategy Also SMEs prefer to use measures that are free of charge and easy to implement and do not want to invest too much in security management22
bull A study of the adoption of electronic trading systems (ETS) in Hong Kong SMEs in 2004 found that the perceived desirability and feasibility of the technology under consideration have significant impacts on SMEsrsquo adoption decisions Cost is the main obstacle and transaction speed transaction volume transaction accuracy and order management are among the perceived benefits from ETS adoption23
bull In a study of the electronic data interchange (EDI) adoption in Hong Kong SMEs using a survey of 644 SMEs it was found that perceived direct benefits perceived cost IT knowledge government incentives and enforcement and trading partnersrsquo influence are the critical determining factors in EDI adoption24 The key determinants of small business EDI adoption was further explained by studying ValuNet an EDI software installed in personal computers for trading companies to lodge import and export trade declarations electronically SMEs were found to focus more on those immediate and direct benefits rather than long-term indirect benefits Perceived costs were seen as major impediments to the EDI adoption while prior EDI experience and perceived level of support from the vendor also determined EDI adoption by SMEs25
bull A similar study of EDI adoption among SMEs in Hong Kong It was found that EDI adopters perceive higher direct benefits (eg improvement of data accuracy data
21 httpwwwhkpcorghtmlengindustry_surveyall_industriesdocsurvey_mouldpdf 22 httpwwwhkpcorghtmlengindustry_surveyall_industriesdocInfoSecSurpdf 23 Khalifa M and RM Davison (2006) SME Adoption of IT The Case of Electronic Trading Systems
IEEE Transactions on Engineering Management 53(2) pp275-284 24 Chau PYK and V Liu (2004) Adoption of electronic data interchange in small- and medium-sized
enterprises in Hunter G and F Tan (eds) Advanced Topics in Global Information Management Vol 3 pp225-252 IGI Publishing
25 Chau PYK and KL Hui (2001) Determinants of Small Business EDI Adoption An Empirical Investigation Journal of Organizational Computing and Electronic Commerce 11(4) pp 229-252
18
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
security and operation efficiency) lower financial costs higher technical competence higher government pressure and lower industry pressure than non-adopters26
bull In a study of e-procurement adoption in SMEs in Hong Kong The following factors were found to affect SMErsquos e-procurement adoption value of e-procurement adoption trust on supplier trust on IT power of e-procurement and power of suppliers 27
bull In a study of the barriers to the adoption of global electronic commerce in ten companies in both Hong Kong and Finland most of which were SMEs it was found that resistance to change lack of education about the potentials of e-commerce and lack of flexible software were identified as the key inhibitors to adoption28
bull A study of e-commerce adoption in Hong Kong SMEs in Hong Kong found that SMEs often wait to follow major corporations to adopt e-commerce Data confidentiality quality assurance issues and human and capital investment were the main concerns of SMEs in their adoption of e-commerce 29
bull A study of Hong Kong SMEs in the clothing industry suggests that SMEs can take the full advantage of IT and the web by forming and expanding a network organisation and by integrating physical and virtual value chains30
bull A study of the computerisation strategy of SMEs in the manufacturing industry identified obsolete organisational structure and policies and employeesrsquo reluctance to change as the major impediments of computerisation 31
26 Kuan KKY and PYK Chau (2001) A perception-based model for EDI adoption in small business using a technology-organisation-environment framework Information and Management 38(8) pp507-521
27 Chan JKY and MKO Lee (2003) SME e-procurement adoption in Hong Kong ndash the role of power trust and value Proceedings of the 36th Hawaii International Conference on System Sciences
28 Farhoomand AF VK Tuunainen and LW Lee (2000) Barriers to Global Electronic Commerce A Cross-Country Study of Hong Kong and Finland Journal of Orgnizational Computing and Electronic Commerce 10(1) pp 23-48
29 Yeung JHY JP Shim and AYK Lai (2003) Current progress of e-commerce adoption small and medium enterprises in Hong Kong Communications of the ACM 46(9) pp226-232
30 Au KF and DCK Ho (2002) Electronic commerce a business model for Hong Kong clothing SMEs International Journal of Services Technology and Management 3(1) pp5-21
31 Chung WWC and SKO Chik (2001) Computerisation strategy for small manufacturing enterprises in Hong Kong International Journal of Computer Integrated Manufacturing 14(2) pp141-153
19
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
4 RESULTS LITERATURE REVIEW OF ICT ADOPTION BY SMEs IN OTHER COUNTRIES
As part of our conceptual framework we have carried out a detailed research of literature available for the adoption of ICT by SMEs across the world to understand if there are similar experiences in other parts of the globe Some of the interesting and relevant findings from this review have been detailed below
41 ldquoThe Role of Intermediating Institutions in the Diffusion of Electronic Data Interchange (EDI) How Industry Associations Intervened in Denmark Finland and Hong Kongrdquo Damsgaard J and Lyytinen K (2001) The Information Society 173 195 mdash210
This article studied the impacts of industry associations on facilitating the EDI diffusion process in the grocery sectors of Hong Kong Denmark and Finland The research found that
Trade and industry associations play an important role in launching industry-wide uses of complex and networked technologies However their strategies and policies need to be tailored to the local environment The success depends on the power dependencies competitive structure and traditions of the industry Additionally trade and industry associations are important not only during the introduction period but also the EDI diffusion phase to proceed beyond local dyadic relationships
Institutional players in Hong Kong Denmark and Finland all first considered common EDI solutions and avoided following the dominating ldquostrategicrdquo and short-term approach to EDI
The EDI diffusion process and the different deployment strategies of trade and industry associations are influenced by local contingencies past history and cultural tradition For example Hong Kongrsquos high rentals were considered as a factor triggering the need for a technological solution
42 ldquoEDI Information and Communication Technology (ICT) Adoption in Horticulture A Comparison to the EFITA Baselinerdquo Taragola N and Gelb B
In the symposium held in 2004 on the constraints of ICT adoption in agricultural production and rural development the respondents from ldquodevelopedrdquo countries suggested that the main constraints included no perceived economic benefits not understanding the value of ICT and not enough time to spend on technology The respondents from
20
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
developing countries were more concerned with the cost of technology and lack of technological infrastructure It appears that in developed countries (and this could be taken in the context of Hong Kong) understanding how to benefit from the use of ICT was one of the most limiting factors for ICT adoption
43 ldquoSkills technology and organisational innovation in Spanish firmsrdquo A Bayo-Moriones M Billo and F Lera-Loacutepez International Journal of Manpower (2008)
The article provides empirical evidence on the relationship between new technologies innovative work practices and up-skilling using a Spanish case study Using detailed plant-level data from a survey of Spanish manufacturing firms the research has found that
bull ICT and innovative work practices are positively related to skills Even without using organisational innovations ICT can enhance up-skilling
bull Firms using ICT in their production process tend to hire workers with a university degree or at least who have finished their secondary education
bull ICT positively impacts the presence of workers with secondary education or a university degree who have the sort of general knowledge that the educational system provides
bull At a firm level results showed that the greater the degree of implementation of new technologies and innovative work practices the higher the need for new skills which means training becomes most important
This may have implications to Hong Kong as under the framework of Spanish economy the majority of firms are SMEs and there is a lack of a long-term investment in innovation and technology
44 ldquoAssessment of e-business adoption in SMEs A study of manufacturing industry in the UK North East regionrdquo R Marasini K Ions and M Ahmad Journal of Manufacturing Technology Management (2008) Vol 19 No 5
This paper tried to understand the barriers that prevent most manufacturing SMEs in the UK from adopting and benefiting from Internet technologies It analysed 32 companies assisted in the Internet technology adoption initiative under government funding and recommended and implemented tailored ICT solutions The findings are summarised as follows
21
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull SMEs tend to favour the improvisational model of technology adoption over the classic change model which may be explained by the alignment of technology the organisational context and the change model used
bull Development of low-cost reliable solutions which are tailored to the needs of SMEs and offer demonstrable business benefits should be given a priority
bull Informal individual and informal group learning plays a vital role in the successful implementation of new technology in SMEs Such learning can be a more effective way of implementing ICT solutions than formal training because it allows employees to systemise concepts into their own frames of reference
45 United Nations Conference on Trade and Development 2008 ldquoMeasuring the impact of ICT use in business The case of manufacturing in Thailandrdquo Prepared jointly by the UNCTAD secretariat and the Thailand National Statistical Office
This study analysed the economic impact of ICT use in the Thai business sector
bull The study evaluated the relationship between computer Internet and web presence and the value of sales per employee Results suggest that firms with a combined use of computers the Internet and the web had on average 21 per cent higher sales than firms without any of the ICTs considered after controlling for a series of firm-specific economic characteristics as well as industry and regional aspects of demand and supply Among the three ICTs considered computers contributed with 14 per cent Internet access with 3 per cent and web presence with 4 per cent
bull In developing countries computer presence in firms is more closely related to economic performance than in developed countries Compared to 95 per cent computer penetration rates in the business sector in many developed countries in developing countries the percentage of firms that use at least one computer for business purposes has remained lower (60 in manufacturing Thailand in 2002)
bull General trends on ICT use in Thai business show that from 2004 to 2006 the proportion of businesses using computers has increased steadily on a general level with faster growth among small businesses with 26 to 50 employees
bull One fifth of the urban firms with more than 10 employees did not use computers on their premises which is a larger share than in a number of other Asian economies such as Hong Kong (China) the Republic of Korea and Singapore
22
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull The sectors with the highest Internet penetration rate in business belong to the services industry computer and related activities and hospitals in Thailand In addition only 15 per cent of the small businesses (11 to 25 employees) are present on the web Web presence is used most frequently in computer and relates services in hospitals and in real estate businesses mainly for marketing products and as an inquirycontact facility Firms receiving orders online make up for 7 per cent of the business sector
bull Results of the productivity analysis find that computer use Internet access and Web presence are associated with significantly higher sales per employee Moreover variation in the intensity of computer use in Thailand was also reflected in higher productivity gains In the theoretical setting considered computers bring value to businesses both through their intrinsic characteristics such as processing and storage capacity and as necessary means for acquiring a superior complexity of ICT use such as Internet access and web presence
bull Its estimated results also show that Internet use matters more in small firms located in Bangkok and the neighbouring region while web presence was correlated with higher labour productivity gains among large businesses located in the central region
bull The groups which seem to benefit from a stronger ICT -labour productivity relationship are the larger and medium-sized more experienced firms located in the Central region and also in Bangkok and its vicinity Younger firms however tended to use computers more effectively while in smaller firms Internet access makes a big difference
bull The estimates derived in this study indicate the need to support the small and newly founded businesses particularly by enhancing access to Internet and facilitating their presence on the web On a regional scale small and young businesses dominate the business sector in the north and northeast of the country and therefore these regions should be a target of public programmes to facilitate ICT use Furthermore data show that in developing countries exporting firms use the Internet and the web more frequently than domestic producers largely motivated by the need to access information and consumers in foreign markets This could be explained by the fact that developed countries have the highest population of potential buyers and suppliers using the Internet and which are present on the web (Clarke and Wallsten 2004) Policies aiming to facilitate the creation of local content available on the Internet could help to bridge this gap
23
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull A large proportion of the firms that do not use ICTs on their premises identify as most important barriers the lack of perceived benefits and ICTs being inappropriate or unnecessary for their business This finding calls for policy action to raise awareness about the benefits businesses can achieve by using ICTs especially among small and medium-sized businesses where the proportion of firms refraining from ICT use is higher
46 ICT for Manufacturing Report of Meeting with Group of Representatives of Five Expert Panels 15 March 2005 Brussels
At five workshops more than hundred experts from industry and academia proposed and discussed research issues with respect to the increasing relevance of ldquoICT for Manufacturingrdquo The findings from these workshops are
bull Modern high-tech products were intelligent and networked This opens up new possibilities for adding value to customers through new Internet-enabled services such as customisation upgrade or maintenance
bull Wireless technologies could have a tremendous impact on shop floor agility thereby enhancing significantly manufacturing competitiveness For example Europersquos automation industry which has worldwide dominance is an example of showing the possibilities of the ldquowireless manufacturing plantrdquo
bull In terms of the design issues of manufacturing a new generation of ICT environment is needed that will support creativity in the design process and facilitate more tightly integrated user experimentation and knowledge networking
bull As to IPR protection it highlights the relevance of ICT in facilitating better protection of knowledge and intellectual property in general however also the need for better management tools and practices in the handling of IPR across the whole product lifecycle
47 ldquoSmall-Firm Computing Motivators and Inhibitorsrdquo P Cragg MIS QuarterlyMarch 1993
This study studied small-firm computing in the manufacturing industry The findings include
bull While many firms had experienced growth in the number and type of IT applications there had been little change with respect to the management of IT in small firms Although some forces like the wish for better information were
24
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
identified as motivating forces in the firms application growth tended to take place where the owner was enthusiastic toward the technology
bull Many inhibitors to growth were identified some strong enough to halt IT growth in a firm including inadequate resources particularly in the form of finance managerial time and internal expertise discouraged growth
48 ldquoProductivity in Australiarsquos Wholesale and Retail Traderdquo by A Johnston D Porter T Cobbold R Dolamore published by Productivity Commission in 2000
This study investigates the productivity trends in Australiarsquos wholesale and retail sector
The major findings include
bull Developments within the wholesale sector consistent with the productivity surge include the widespread adoption of productivity-enhancing technologies (eg barcoding paperless pick systems and automatic re-ordering processes) which moved the sector from a storage-based system to a fast flow distribution network and greater competition acting as a catalyst for rationalisation (through mergers acquisitions and firm exits) and outsourcing of non-core functions
bull Key developments within retailing consistent with this improvement include intensified competition (eg Korean entry-level cars) leading to rationalisation in tandem with the widespread adoption of labour saving technologies retailersrsquo responses to social and demographic changes (such as the growth in lsquoincome-rich and time-poorrsquo consumers) and changes in legislation governing trading hours and reforms to industrial relations legislation which have increased the focus on enterprise-based work conditions
bull The impact of many factors such as technology social changes institutional reforms and increased competition means that it is appropriate to view wholesale and retail trade as part of an integrated lsquovalue networkrsquo rather than simply as elements of a sequential distribution function linking producers and consumers
49 ldquoDoes Experience Matter Innovations and the Productivity of ICT in German Servicesrdquo by T Hempell Discussion paper of ZEW Centre for European Economic Research in 2002
This research is based on a representative data set for German service firms covering the period between 1994 and 1999 The results suggest that the experience gained from past innovations is a specific complement that makes ICT investment more productive
25
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Administrations of firms that have introduced innovations in the past are expected to be better prepared to assess the potentials and limits of introducing major changes they may be more successful in training and motivating their employees to take part actively in the subsequent innovations and they may have acquired some degree of innovative reputation in new business areas which facilitates the sale of new products and services
26
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
5 CONCEPTUAL FRAMEWORK
Our review of existing research showed that most studies on the adoption and use of ICT by SMEs were piecemeal and examined only parts of the complex tapestry that composes the SMErsquos ecosystem
By adapting and refining a holistic integrated framework of key issues facing SMEs we have tried to ensure that all the key issues that confront SMEs during different stages of their development at enterprise industry and national levels along with the various socio-economic dimensions (Figure 1) were addressed in a systematic and comprehensive manner
The conceptual framework proposed for this study is an outgrowth of our previous work on SMEs in Hong Kong and other work related to the adoption of ICT in Hong Kong32
Figure 1 An Integrated Framework of Key Issues Facing SMEs
As shown later each of the above concepts has been addressed while creating a list of the key indicatorsfactors for ICT adoption by SMEs
SMEs Stage Model of ICT Development
32 Small Business Management and Entrepreneurship in Hong Kong Farhoomand A (Editor) Hong Kong University Press 2005
27
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
As elaborated in Appendix 1 SMEs go through different stages of growth and invest in ICT for different sets of economic or strategic reasons As such we posit that their ICT needs usage and investment also go through a stage model We employ the SMEs Stage Model of ICT Development (SSMID) to gain a better understanding of how ICT is deployed and exploited by SMEs This model is based on a framework that charts ICT-enabled business transformation 33 refined to embed the inherent idiosyncratic characteristics of SMEs34 and modified to the incorporate the emerging roles of the Internet and e-commerce35
As shown in Figure 2 the SSMID consists of six stages starting with low-impact low-benefit investments in internal systems and culminating in high-impact high-benefit investments in integrated strategic and transformative systems
1 Localised Exploitation
2 Internal Integration
3 Web Presence
4 Transaction
5 External Integration
6 Transformation
Low
High B u s i n e s s
T r a n s f o r m a t i o n
Low HighRange of Potential Benefits
33 Venkatraman N (1994) IT-induced business transformation from automation to business scope redefinition Sloan Management Review Winter pp73-87 34 Levy M and Powell P (2008) Small Firm Transformation Through IS International Journal of Technology Management Vol 43 35 Subba Rao S Metts G and Mora Monge C (2003) Electronic commerce development in small and medium sized enterprises A stage model and its implications Business Process Management Journal Vol 9 Page11 ndash 32
28
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Figure 2 SMEs Stage Model of ICT Development
As mentioned earlier initial investments in ICT by SMEs are primarily motivated by cost considerations In the first stage of ICT development localised exploitation stage SMEs use a computer and various software applications to improve their operational efficiency in one or more functional areas usually starting with accounting Package systems are ideal for SMEs as they require low IS expertise and are more affordable Table 4 shows the different applications applied to different functional areas
The second stage is internal integration stage In this stage ICT applications in different areas are integrated sharing the same database and different applications such as intranet and Enterprise Resource Planning (ERP) SMEs realise integration benefits if they can use the information to improve customer service or efficiency or to acquire more customers As integration efforts at this stage usually do not take into account the industry value chain the benefits to SMEs may be limited
Functional Area Applications
Production
bull Stock control bull Jobwork scheduling bull Capacity planning bull Computer controlled
equipment
Design bull Engineer analysis bull Computer-aided design
(CAD)
Costing bull Job estimatingquoting bull Job costingcost analysis
Office Administration
bull Invoicing debtors creditors bull Purchase order processing bull Word processing bull Payroll
Marketing bull Mail shots to customers
bull General ledger
29
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Financial bull Budgeting
Table 4 ICT Applications by Functional Areas36
At web presence stage SMEs establish online presence They provide static information related to their products or services history and contact details But there is little interaction with customers and suppliers At this stage SMEs have the potential to expand their geographic customer base
During transaction stage SMEs have a clear e-business strategy to buy and sell on-line and allow their customers to make and track their orders online They also engage in e-procurement with their suppliers using such applications as Internet EDI e-marketplaces and e-bidding At this stage SMEs have the potential to improve productivity through service integration Few SMEs however seem to progress further than this stage37
At external integration stage some SMEs manage to exchange information across the value chain manage relationships with collaborators achieve full supply chain or value chain integration and focus on knowledge management At this stage SMEs can redesign their business network to focus on their core competencies streamline their business scopes for flexibility 38
Stage Applications Value
1 Localised Exploitation
bull PCLaptop bull One or more applications
(see Table 2 for the list of applications)
bull Improve task efficiency bull Reduce costs
2 Internal Integration
bull Applications allow technical connectivity and application interdependence (eg intranet ERP)
bull Improve customers service
bull Improve efficiency and effectiveness
3 Web Presence bull Webpage bull Geographical expansion
of potential customer base
36 Cragg PB and M King (1993) Small-firm computing motivators and inhibitors MIS Quarterly March pp47-60 37 Levy M and P Powell (2003) ldquoExploring SME internet adoption issues towards a contingent model Electronic Markets 13 pp173-18138 Rao SS G Metts and CAM Monge (2003) Electronic commerce development in small and medium sized enterprises a stage model and its implications Business Process Management Journal 9 pp11-32
30
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Email bull Online marketing
4 Transaction bull EDI bull E-marketplaces bull E-procurement
bull Improve productivity through service integration
5 External Integration
bull Full supply chainvalue chain integration
bull E-enterprise with a focus on knowledge management
bull Redesign business network to focus on core competence
bull Streamline business scope for flexibility
bull Exploit network opportunities
6 Transformation
bull Applications to allow the use of knowledge with a focus on customer needs as a strategic resource to create business value
bull Penetrate into new markets
bull Create new business models
bull Prompt response to market changes
Table 5 ICT Applications and Benefits at Different Stage
At transformation stage SMEs exploit ICT to change their business within an extended business network and to develop greater cooperative relationships with existing and new markets provide customer-focused products and services manage knowledge as a strategic resource and develop new business models At this stage business value is created through the use of knowledge with customer focus at the core The Internet offers new ways for SMEs to use new channels to build relationship with business partners to manage knowledge within and between the firm and the market to conduct electronic order processing and tracking and to deliver goods and products online Table 5 shows ICT applications and benefits at different stages
We have combined the above to arrive at three Stages of ICT Usage (refer to Appendix 2 for further details)
Stage 1 Localised Exploitation (PCs) amp Internal Integration Stage 2 Web presence (Internet Connection) amp Online Transaction Stage 3 External Integration (Electronic value chain) amp Transformation
31
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
As shown in the next section we have used the above conceptual framework as the basis for our research methodology
32
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
6 OVERVIEW OF THE RESEARCH METHODOLOGY AND HYPOTHESES
We have conducted a multi-pronged approach to undertake this study After carrying out a comprehensive review of literature and study we identified the factors facilitating or hindering the adoption and use of ICT among SMEs We subsequently raised a number of hypotheses in the Inception Report
However on 13 March 2009 a meeting was held with the OGCIO and the members of the Digital Inclusion Task Force where it was suggested that the scope of the study was refined It was also suggested that the hypothesis should be refined to become more specific and actually reflect the differences in strategic focus problems and potential values at different levels of ICT use and sophistication for SMEs along with the possible factors that lead to ICT adoption
Consequently the following hypotheses as stated in the Inception report were culled out and revised to reflect the above thought process and formed an important foundation for our research If we find evidence in support of these hypotheses we can conclude that the factors affecting the Hong Kong SMEsrsquo ICT decision adoption process are similar to those in other countries If however the hypotheses are not accepted we need to further analyse the reasons such differences
H1 Organisational readiness measured by factors such as its ICT infrastructure managerial and language skills number of ICT qualified employees and absorptive capacity affects the ICT adoption decision of Hong Kong SMEs
H2 The stage of development affects the ICT adoption decisions of Hong Kong SMEs
H3 Business cyclical factors affect the ICT adoption decisions of Hong Kong SMEs
H4 Market competition measured by number of existing and new competitors affects the ICT adoption decisions of Hong Kong SMEs
H5 Pressure from business partners measured by the adoption of digital transactions along the supply chain affects the ICT adoption decisions of Hong Kong SMEs
H6 Perceived operational benefits measured by improved operation efficiency cost savings inventory control and accurate and timely management of information affect the ICT adoption decisions of Hong Kong SMEs
33
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
H7 Perceived strategic benefits measured by market expansion new business models new productsservices improved company image and developed innovative capacity affect the ICT adoption decisions of Hong Kong SMEs
H8 ICT affordability affects the ICT adoption decisions of Hong Kong SMEs
H9 Lack of information measured by the availability of information on the ICT its functions costs and benefits affects the ICT adoption decisions of Hong Kong SMEs
H10 Lack of confidence in the legal framework regulating electronic transactions affect the ICT adoption decisions of Hong Kong SMEs
The verification of these hypotheses has been addressed later in the Report
Subsequent to the above a synthesis of the literature combined with the relevant statistical data allowed us to modify our conceptual framework to develop a structural model of factors leading to the adoption or inhibiting the adoption of ICT
To begin with the project took two clear routes
bull Statistical analysis based on survey data (including IT usage data from business IT survey and business operating data from annual economic surveys) provided by the ldquoCensus amp Statistics Department Hong Kong SARrdquo (ldquoCampSDrdquo) for analysis of existing data using different statistical techniques
bull Conducting our own surveys through mail survey large-scale telephone survey and email survey
Based on the results of the CampSD analysis the preliminary results of our own survey and the economic contribution of an industry we selected some industry sectors for in-depth study and in-depth interviews These have been detailed as case studies and have been used to complement our quantitative findings
The advantage of this multi-pronged approach is that it provides a richer picture of the issues surrounding the adoption of ICT by SMEs in Hong Kong
34
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
7 ANALYSIS amp RESULTS BASED ON THE CampSD DATA
In broad terms we conducted two sets of analyses with the assistance of the CampSD one based on ASIT data another based on analysis of the ASIT data and the Value Added data in CampSD
71 Analysis based on the ldquoAnnual Survey on IT Usage amp Penetration in the Business Sectorrdquo (ASIT) report
The base document used here was the ldquoAnnual Survey on IT Usage amp Penetration in the Business Sectorrdquo (ldquoASITrdquo) report In our analyses we used only SMEs and not the large enterprises We included in our analyses enterprises with less than 50 employees in all the sectors
Analysis was conducted on the ASIT questions to select those questions which could be mapped into the three Stages of ICT Usage (See Appendix 3 for details) Then we calculated the extent of ICT penetration in an enterprise by calculating a composite index for those selected questions (See Appendix 4 for details) The selected questions included in the calculations were then assigned weights so that each stage would fall within a certain range of points This index called ICT Usage (ICTU) designates the three levels of usage at the different stages of ICT Usage
Stage 1 ndash ICTU1 Localised Exploitation (PCs) amp Internal Integration Stage 2 ndash ICTU2 Web presence (Internet Connection) amp Online Transaction Stage 3 ndash ICTU3 External Integration (Electronic value chain) amp Transformation
It was found that information on the types of the Internet applications and the types of online transactions was not available from CampSD therefore the final analysis was carried out based on the factors listed in Appendix 5
As shown in the conceptual framework we first wished to analyse ICT Usage based on the sector the company belongs to the size of the company and its age
a Sector the company belongs to (A1 ndash ldquoNature of business of your firmrdquo)
As discussed in the meeting with the OGCIO on 1 April 2009 we focused on the 8 sectors They are
1) Manufacturing 2) Construction 3) WholesaleRetail 4) Import and Export Trade
35
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
5) Restaurants and Hotels 6) Transport and Storage 7) Financing and Insurance 8) Real Estate and Business Services
During our study this list was expanded into 12 sectors (refer to Appendix 6) where Import and Export Trade were further sub-divided into 3 parts Real Estate and Business Services were treated separately and the Communications sector was included because its data often appear with Transport and Storage in the CampSDrsquos reports (such as ASIT) for being under the same category in HSIC 11 The new list thus was as follows
1 Manufacturing 2 Construction 3 WholesaleRetail 4 Import and Export Trade (Consumer non-durable goods) 5 Import and Export Trade (Consumer durable goods) 6 Import and Export Trade (Miscellaneous goods) 7 Restaurants hotels and boarding houses 8 Transport and Storage 9 Communications 10 Financing and Insurance 11 Real Estate 12 Business Services
Analyses done
i For each sector we calculated the frequency breakdowns and corresponding histograms of the three levels of ICTU
ii We checked to see if there are significant differences between the three levels of ICTU among the 12 sectors
The results show that there is significant difference between the levels of ICT usage among the 12 sectors (refer to Appendix 7)
b Number of employees (A2 ndash ldquoNumber of persons engaged in your firmrdquo)
We checked to see if the ICT Usage is related to the number of employees engaged by the firm We included in our analyses enterprises with less than 50 employees in all the sectors
Analyses done
36
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
iii For each individual sector conducted simple correlation analysis between ICTU and number of employees to see if ICTU is dependent on number of employees and sector This allowed us to analyse whether companies employing more employees have greater ICT Usage or not
We find that the level of ICT usage is significantly correlated to the number of employees but only in the following sectors
Manufacturing WholesaleRetail Import and Export Trade (Consumer non-durable goods) Import and Export Trade (Consumer durable goods) Import and Export Trade (Miscellaneous goods) Business Services
This indicates that as SMEs in these sectors get larger their level of ICT usage increases
c Age of the company
Based on the literature review a study shows that the hazard rates of companies fluctuate over the years which can be categorised into three stages age 3 age 7 and age 16 The hazard rate declines from age 3 to age 7 and then remains relatively flat until about age 16
Based on the above for the purpose of our research the three stages have been categorised as birth (less than 3 years) growth (3-7 years) and maturity (7+ years)
Stage Average Age (years) Birth lt3 years Growth 3 ndash 7 years Maturity gt7 years
Unfortunately because the CampSD survey did not contain the year of a companyrsquos registration thus we were unable to perform the above analysis We will address this issue through data analyses of our own surveys
d Interactions between Companyrsquos Age and Sector
We wanted to see if ICT Usage is different across companies of different age and across different industry sectors
37
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Unfortunately because the CampSD survey did not contain the year of a companyrsquos registration thus we were unable to perform the above analysis We will address this issue through data analyses of our own surveys
72 Analysis based on the ASIT report and Value Added obtained from the CampSD
We needed to match the SME cluster of the ASIT sample points with other databasessurvey that contained value added data related to individual companies This would enable us to gain a better understanding of the connection between ICT usage and value added39 of a company
As the data for deriving value added for business undertakings in different economic sectors are separately collected through annual economic surveys CampSD matched the common samples between ASIT and the programme of annual economic surveys [including the Annual Survey of Industrial Production (ASIP) Annual Survey of Building Construction and Real Estate Sectors (ASBCRE) Annual Survey of Wholesale Retail and Import and Export Trades Restaurants and Hotels (ASW) Annual Survey of Transport and Related Services (AST) and Annual Survey of Storage Communication Financing Insurance and Business Services (ASS)] (the latest refer to year for these surveys is 2007)
Analyses done
iv For each sector we performed regression analysis between a companyrsquos value added and ICTU to see if there is any correlation between the two variables
We found only 214 matched cases Because there were 12 sectors under consideration only some of the sectors had enough sample points necessary for meaningful statistical analyses Of these we found significant correlation between a companyrsquos Value Added and the ICT Usage in WholesaleRetail sector As detailed in Appendix 8 WholesaleRetail sector contributes only approximately 5 of the total Value Added of SMEs We selected this sector for more in-depth analysis
73 Conclusions
39 According to the CampSD website ldquoValue added = Gross output (net of stock appreciation for work-in-progress finished products and goods for resale) ndash Consumption of materials supplies and industrial workservices (net of stock appreciation for materialssupplies) ndash Rent rates and government rent for land and buildings ndash Rentals for machinery equipment and vehicles ndash Other operating expensesrdquo (httpwwwcenstatdgovhkhong_kong_statisticsstatistics_by_subjectglossaryindustrial_productioninde xjsp)
38
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Based on our analysis at CampSD we find a correlation between ICT Usage and the number of employees at a firm
More important we find in the WholesaleRetail sector there is a significant correlation between the Value Added and the ICT Usage
In addition to this sector it was also decided that we would focus on the ImportExport Trade sector too as it contributes 48 of the Value Added of SMEs
39
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
8 OVERVIEW OF THE SURVEYS CONDUCTED BY HKU
Based on our multi-pronged approach to the study data was collected and analysed through various means and techniques These included mail survey questionnaires telephonic case study interviews and literature review of similar experiences in other parts of the world
81 Survey questionnaires
Sample Design
We acquired a sample dataset from the Census and Statistics Department containing 56588 companies The dataset included company name type of business company size (in terms of the number of persons engaged) and address The list included some companies that cannot be categorised as small and medium enterprises for example the Hong Kong branch of some multinational companies or a regional branch of a large well-known Hong Kong local company After an initial screening of these large companies the dataset was scaled down to 54087 companies
We categorised the companies using their industry codes This gave us the proportion of companies in each sector in the dataset We used this information to determine the proportional clustered sampling mechanism whereby the number of companies selected for the sample in each sector is in proportion to the whole dataset This principle applied to all the surveys namely the mail survey telephone survey as well as the email survey The samples were selected randomly (one in every ten entries)
We selected companies in such a way that a particular company would be contacted only once either by email or by phone or by post Once selected we first searched for email addresses on the web If not found we then looked for telephone numbers If no other contact detail was found we used the option of mailing by post
Questionnaires
We used the software ldquoSurveymonkeyrdquo to design a survey questionnaire Three separate sets of questionnaires were designed ndash one for print and mailing another for telephonic interviews and the last for e-mailing The questions selected for these are once again based on our conceptual framework following the three Stages of ICT Usage
A pilot survey on the indicators was conducted on June 12 2009 with ten companies to ensure the key indicators are clear and unambiguous The final indicators were then used in the final survey questionnaire
40
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Mail questionnaire The mail questionnaire was prepared in both Chinese and English (refer to Appendices 9 and 10) A total of 10000 questionnaires were sent out
bull Telephone interviews We recognised the importance of recruiting the right personnel We recruited those people with previous experience in conducting telephone interviews to help us conduct the large-scale telephone interviews Detailed telephone guidelines were also issued to the interviewers (refer to Appendix 11) A total of 1000 telephone interviews were made
bull Email surveys We also sent out 3900 e-mail surveys to the SMEs with email address in both English and Chinese (refer to Appendices 12 and 13)
Response Rate Treatment
Non-response bias is defined by the OECD as ldquothe bias resulting from limiting the survey analysis to the available datardquo40 We have studied the non-response bias to find out whether differences exist between those people who respond to the survey and answer questions and those who do not respond More specifically we called up 30 random respondents to check whether they have replied to the survey If they had not we tried to go through the survey questionnaire with them on the phone so that we could compare their answers with our existing findings to ascertain there are no significant differences
Based on our research of survey responses in Hong Kong we expected a response rate of around 5-7 Our estimation of the low response rate is based on existing studies Historically Hong Kong has a very low response rate as evident in published studies41
For example in a response rate study among 22 countries Hong Kong has the lowest response rate which was 7142 This is further complicated by the fact that our targets are small and medium business owners ndash ldquoMail surveys of small business owners have notoriously low response ratesrdquo43 SMEs in HK have a tendency to move offices if the
40 httpstatsoecdorgglossarydetailaspID=5145 41 JB Cullen JL Johnson and T Sakano Japanese and Local Partner Commitment to IJVs Psychological Consequences of Outcomes and Investments in the IJV Relationship Journal of International Business Studies 26 (1995) pp 91ndash116 GL Harrison GL McKinnan S Panchapakesan and M Leung The Influence of Culture on Organization Design and Planning and Control in Australia and the United States Compared with Singapore and Hong Kong Journal of International Financial Management and Accounting Oct (1994) pp 242ndash261 CF Keown Foreign Mail Surveys Response Rates Using Monetary Incentives Journal of International Business Studies 16 (1985) pp 151ndash153 42 Harzing Anne-Will (2000) Cross-National Industrial Mail Surveys Why Do Response Rates Differ between Countries Industrial Marketing Management 29 pp243-253 43 Deninis Jr WJ (2003) ldquoRaising response rates in mail surveys of small business owners results of an experimentrdquo Journal of Small Business Management 41(3) pp278-295
41
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
rent can be lowered Moreover SMEs have a low rate of business survival and the financial crisis has made it harder for SMEs
Recent studies have suggested that a low response rate does not mean lower survey accuracy 44 and a low response rate only indicates a risk of lower accuracy45 Since we have no control over the response rate we tried to collect more information to reduce the risk of lower accuracy First we used other survey means to collect more data We sent out 10000 mailing surveys complemented by the surveys sent by email (3900) and conducted on the phone (1000) We collected 692 replies by mail 102 replies on the phone and 102 replies by email Hence the above response has given us sufficient data points for the analyses needed in the study Second we used treated potential non-response bias to check whether there is any significant difference in the survey answers between those who responded to our postal survey and those who did not respond Based on our analysis the difference of means in the two groups of respondents and non-respondents appears small and thus we do not perceive a non-response bias
82 Telephonic case study interviews
We also conducted in-depth interviews with a group of SMEs In total we called 1000 companies 102 of which agreed to participate in the survey Among these 102 companies 53 companies agreed to have a second interview However some of them subsequently withdrew Hence we then used yellow pages and personal contacts to arrange some more interviews We have finally conducted 12 interviews in selected industries Among them seven interviewees agreed to have telephone interviews and the remaining five interviewees agreed to be interviewed face-to-face
83 Literature review of similar experiences across the world
A detailed research of literature available for the adoption of ICT by SMEs across the world was carried out to see if there are similar experiences in other parts of the globe The findings therein have been detailed in Section 4
84 Selection of sectors
As stated in the previous section we identified the WholesaleRetail sector as showing a significant correlation between the Value Added and the ICT Usage
44 Holbrook Allyson Jon Krosnick and Alison Pfent 2007 ldquoThe Causes and Consequences of Response Rates in Surveys by the News Media and Government Contractor Survey Research Firmsrdquo In Advances in telephone survey methodology ed James M Lepkowski N Clyde Tucker J Michael Brick Edith D De Leeuw Lilli Japec Paul J Lavrakas Michael W Link and Roberta L Sangster New York Wiley ldquoResponse Rates ndash An Overviewrdquo American Association for Public Opinion Research (AAPOR) 29 Sept 2008 45 httpenwikipediaorgwikiResponse_rate
42
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
In addition we had also decided to focus on the ImportExport Trade sector as this contributes almost half of the Value Added of SMEs to the Hong Kong economy This ImportExport sector has been further sub-divided in 3 areas
bull Import and Export Trade (Consumer non-durable goods) bull Import and Export Trade (Consumer durable goods) bull Import and Export Trade (Miscellaneous goods)
Further preliminary analysis based on our analysis of the survey responses showed a significant correlation between revenue and extent of ICT use for Business Services sector Hence this was the sector was also selected for further investigation
The above three sectors were presented to the OGCIO in the Interim Report prepared by HKU It was decided that an in-depth interview would be conducted for two SMEs in each of the above sectors as well as the manufacturing sector
Hence in all there were twelve interviews conducted and the findings have been reported as qualitative case studies to complement our quantitative findings This has been detailed in Section 10
43
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
9 RESULTS ANALYSIS OF THE SURVEY QUESTIONNAIRES
We analysed the data received in response to our surveys - mail and email as well as the telephonic interviews While the mail and email surveys were largely analysed as quantitative data the telephonic interviews which had more in-depth questioning were used in both quantitative and qualitative analyses
Response Rate
The final response rate for each survey is as given below
bull Mail questionnaire The mail questionnaire was prepared in both Chinese and English and a total of 10000 questionnaires were sent out In all 693 responses were received
bull Telephone interviews A total of 1000 telephone interviews were made 102 respondents replied to the calls
bull Email surveys We sent out 3900 e-mail surveys to the SMEs with email address in both English and Chinese 39 English responses and 63 Chinese responses were received
In all 897 responses were received The first step in our analysis was to exclude all those responses which were not from SMEs even though we had made provisional attempt to exclude such companies in our initial sample Hence responses received from manufacturing firms with over 100 employees and from firms in non-manufacturing sectors with over 50 employees were excluded from this analysis There were thus 789 responses in all to work with (for further details on the merging and transformation of the data refer to Appendix 14)
The breakdown of the sample according to sector size and age are as follows
44
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
By Sector
Frequency Percent Valid
Percent Cumulative
Percent
Manufacturing - 301 81 103 104 104
Construction - 501 68 86 87 191
WholesaleRetail ndash 601
ImportExport ndash
176 223 225 416
Consumer non-durable goods - 602
ImportExport ndash
57 72 73 489
Consumer durable goods - 603
ImportExport ndash
60 76 77 566
Miscellaneous goods - 604
94 119 120 686
RestaurantsHotels amp Boarding Houses - 605
13 16 17 703
Transport amp Storage - 701
32 41 41 744
Communications - 702 8 10 10 754
Finance amp Insurance - 801
35 44 45 799
Real Estate - 802 18 23 23 822
Business Services - 803 139 176 178 1000
Total 781 990 1000 Missing 8 10
Total 789 1000
Hence the Communications sector (702) was excluded from most analysis because of its small sample size (8 respondents)
45
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
By Number of employees
Frequency Percent Valid
Percent Cumulative
Percent
Less than 10 people 10-49 people 50-100 people
604 178
7 789
766 226
9 1000
766 226
9 1000
766 991
1000
We have excluded from most quantitative analysis those companies with more than 50 employees (Manufacturing) because of the small sample size
By Number of Years in Business
Frequency Percent Valid
Percent Cumulative
Percent
Less than 3 years 3-7 years More than 7 years Total Missing from the system Total
109 193 477 779
10
789
138 245 605 987
13
1000
140 248 612
1000
140 388
1000
By total revenuesales in the last fiscal year
N Valid 390
Mean 16838817
46
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Median 1535280 Std Deviation 89245778 Minimum 5 Maximum (exponential format)
1E9
(Further break down of revenue by industry age and number of employees is provided in Appendix 15)
91 Usage of Personal Computers (PCs) ndash Stage 1
We find that 87 of the sample use PCs (refer to Appendix 16) Hence the first question raised was about the remaining 13 (100 responses) who do not use PCs This was a particularly interesting finding as it allows us to gain some insights into the inhibitors of PC adoption
911 Not Using PCs
What could be the reasons for not using PCs Analysis of the data showed that the most popular response is that it is not needed In order of importance the following are rated as the reasons the firm did not use PCs (refer to Appendix 17)
It is not really needed
It is difficult and expensive to maintain
It is costly
There may be security issues
There is no one to train the personnel
There is difficulty finding trained personnel to use PCs
It appears that need and cost are the two critical issues We further tried to analyse the above data to understand if there are any differences in responses based on the sector the firm belonged to the age of the firm or the size of the firm
47
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Where the sample size was not large enough (less than 10) these sectors were excluded from this analysis or were clustered in the case of Import amp Export firms We find that there are no significant differences about the reasons for not using PCs across different sectors or based on the companyrsquos size or number of years in existence (refer to Appendix 18) Hence we can see that the reasons for not using PCs are fairly similar across the demographic characteristics
Our next step was to try and understand whether the respondents realised that the use of PCs could have many benefits If so it would be easier to promote the use of PCs despite the perceived barriers Accordingly our next analysis was on the response to the question ldquoDo you think that using PCs would help improve the operations of your firm If so howrdquo
We received a total of 54 responses to this open-ended question (refer to Appendix 19) Of these replies approximately half (25 respondents) said that using PCs would not help the operations of their business The remaining 29 respondents thought that the use of use of PCs could be beneficial The main advantages as represented by the following responses revolved around PCsrsquo speed accuracy and efficiency
ldquoYes it will improve the companys management and increase the operational speedrdquo
ldquoOf course it will bring more convenience to the companys operations We do not have to record the financial accounts manually The products serial numbers will be clearer so it will be faster and more convenient when we check the goodsrdquo
ldquoMore convenient in terms of record-keeping paperwork and record-chasingrdquo
Respondents also thought that the PC could be useful in communications electronic banking and marketing efforts This suggests that this group once initiated to PCs would also be open to moving on to Stage 2 and use the Internet
We then asked the respondents ldquoWhat would really motivate or push you to use PCsrdquo We received 54 responses to this open-ended question (refer to Appendix 20) As would be logical further to the principal deterrent being the lack of business need for a PC the primary motivators that would encourage the respondents to use PCs are clustered around the expanding business requirements
ldquoWhen the business further develops and when the high technology is useful for businessrdquo
48
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ldquoWhen there are too many products that needed to be recordedrdquo
ldquoWe will consider it when there are enough human resources and time for back-office trainingrdquo
The other common replies concerned cost (being provided with financial support and a cheap PCpackage) as well as training of personnel to use the PCs
In sum the respondents cited the following factors as the prime motivator for use of PCs
When business needs grow
Financial support is provided
Technical support is provided
These motivators would also give us some direction to answer the question of ldquoHow useful would the different types of Government support be for the firm to install and use computersrdquo
The first motivator is a function of the macro-level state of the economy and the business environment Governments cannot usually play an effective role in directly addressing this factor
However in terms of addressing the provision of financial and technical support our analysis shows that in order of importance the following are rated as most useful types of support that the Government could provide to promote the use of PCs (refer to Appendix 21)
Subsidising training in using PCs
Providing PC adoption consulting services
Providing tax incentives
Providing more information on the costs and benefits of using PCs
49
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Holding training workshopsseminars
Subsidising training in the use of PCs and providing PC adoption consulting services is the most popular suggestions with 57 of the respondents who replied to this question perceiving this to be veryhighly useful
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm and its number of employees (refer to Appendix 22) We find that there are no significant differences in perceiving the use of different types of Government support across different sectors or the number of employees
However there are some significant differences based on the age of the company In particular the older firms (those who had been in existence for a period over 7 years) find subsidising training in using PCs providing PC adoption consulting services and providing tax incentives to be far less useful than the younger firms This is an important conclusion as it suggests that while the Government is trying to promote the use of PCs through these measures its focus should be on the younger firms who appear to be far more open to Government support in using PCs
912 Using PCs
As stated earlier in the section 87 of the respondents (685 responses) used PCs Our first level of enquiry was to understand what the PC was being used for This was answered by the question ldquoPlease mark the extent to which your firm uses software for the following tasksrdquo
Analysis of the data shows that the most popular software packages are Word processing Computer security and spreadsheet The least popular are HRMTraining and Presentation (refer to Appendix 23) This insight is useful as it shows where the focus should be when the use of PCs is being promulgated
We further tried to analyse the above data to understand if there are any differences in responses based on the sector the firm belonged to the age of the firm and its number of employees Where the sample size was not large enough (n lt 10) these sectors were excluded from this analysis We find significant differences in the usage of PC software across these factors (refer to Appendix 24)
bull Sector We first focused on the top-3 most popular software - namely Word spreadsheet and Computer security Word while being used actively across all sectors is much less used in the Real Estate sector Spreadsheet too is used less in the
50
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Real Estate sector as well as in the Construction and WholesaleRetail sector Computer security software is not popular in the Real Estate and the Transport amp Storage sector
While Multimedia and Finance software are used more or less equally across sectors all the other software applications show significant differences across sectors
We then analysed the software used at the selected sectors On the whole the WholesaleRetail sector uses all these software packages less than the other sectors Business Services and the ImportExport sectors are higher users of all types of software as compared to the other sectors
bull Number of Employees The use of database finance sales and HRM software is significantly different across companies of different size and increases linearly with an increase in the number of employees (We have excluded those firms with gt50 people from our analysis as the sample size lt10)
bull Number of Years in Business Younger firms (less than 3 years old) use databases much less than older firms There are some differences in the use of Presentation and Multimedia software but these packages are not used as frequently
As a supplement to this question moving higher on the technology curve our next question was to ldquomark the extent to which the firm uses tailor-made computer systems for FinanceAccounting PurchasingSale and Order Processing and HRMTrainingrdquo
Analysis of the data show that HRMtraining package is seldom used while the Finance and Purchasing packages are also used very little or sometimes (refer to Appendix 25) We further tried to analyse the above data to understand if there are any differences in responses based on the sector the firm belongs to the age of the firm and its number of employees Where the sample size was not large enough (n lt 10) these sectors were excluded from analysis
While the number of years in business has no impact on the usage of these custom-made packages there are significant differences in their usage across the number of employees in the firm (refer to Appendix 26) Interestingly as the number of employees increases so does the usage of these custom-made packages This would suggest that these packages would be boughtused when a certain critical mass is achieved in terms of the firmrsquos size (We have excluded those firms with gt50 people from our analysis as the sample size lt10)
51
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
In terms of sector the use of the finance and purchasing packages differs across sectors Finance is used significantly more in the Business Services and Transport amp Storage sectors Similarly as compared to the other sectors custom-made purchasing packages are used more in Import amp Export ndash Consumer Durable Goods Import amp Export ndash Miscellaneous Goods and WholesaleRetail
913 Value Added from PC Usage
To understand the link between ICT Usage and the Value Added we asked the question ldquoHow much value do you think PCs have added to the following aspects of your businessrdquo becomes necessary
In order of importance the following are perceived as the most important value additions made by the usage of PCs to the business (refer to Appendix 27)
Improving operational efficiencyreducing costs
Improving customer services
Providing competitive advantage
Exploring new opportunities for growing business
Increasing sales
Improving operational efficiency and customer service are the two top value additions made by the use of PCs This also ties in with the earlier analysis of where the respondents who do not yet have PCs perceive the maximum value addition to be
We next analysed the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm and its number of employees (refer to Appendix 28) We find significant differences in the perception of value added across sectors and according to the age of the firm (not its number of employees)
bull Sector Other than the ldquoefficiencyrdquo factor there are significant differences in the perception of value added across sectors
Improving customer service While there is generally high agreement among all the sectors that the usage of PCs improves customer service this was more pronounced in
52
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
the Finance amp Insurance Business Services and Import amp Export ndash Consumer Non-durable Goods sectors On the lower end of the spectrum the Transport amp Storage Construction and WholesaleRetail sectors do not see such a high correlation between PC usage and customer service
Increasing sales Firms belonging to the Finance amp Insurance and Import amp Export ndash Consumer Non-durable Goods sectors find high support for increasing sales by using PCs However those belonging to the Transport amp Storage and Construction sectors do not perceive much value addition in terms of sales increasing when PCs are used
Exploring new opportunities for growing business ndash The Import amp Export along with the Manufacturing sector sees much value in exploring new opportunities for business growth ensuing through the use of PCs However those firms belonging to the Transport amp Storage and Construction sectors do not perceive such high value addition
Providing competitive advantage ndash Business Services Finance amp Insurance and the Import amp Export sector perceived significant value added in this dimension However this was comparatively lower for the Transport amp Storage and Real Estate sectors
bull Number of Years in Business Two of the dimensions are affected by the age of the firm (Increasing sales and providing competitive advantage) The perception of value addition along these two dimensions increases from those firms less than 3 years old to those firms in the 3-7 years It then drops in for the oldest subset
914 Relationship between Perceived Value and PC Usage
Because one of the primary objectives of the study is to find whether the perceived value of ICT and its usage are correlated we calculated a composite index of PCsrsquo value and usage by adding up the scores of the corresponding indicators We then performed correlation analysis between value and usage We conducted our analyses according to industry firmrsquos size and age to check for possible differences along these three dimensions (refer to Appendix 29) We had to exclude from the analysis Restaurants and Communications sectors because of small sample size We should point out that these relationships are correlational and not causal
bull Sector We found significant relationships between perceived value of PCs and usage in all but Import and Export Trade (Consumer non-durable goods) sectors
bull Number of Employees We had to exclude from analysis companies with more than 50 employees because of small sample size We found significant
53
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
relationship between perceived value of PCs and usage in both very small (less than 10 employees) and small (10-49 employees) firms
bull Number of Years in Business We found significant relationship between perceived value of PCs and usage irrespective of the age of the business
Overall we find a correlation between perceived value of PCs to the business and the extent to which firms use PCs
915 Summary of findings for Section 91 ndash Stage 1
ICT Stage - Not Using PC Reasons for not using PCs 1 It is not really needed
2 It is difficult and expensive to maintain 3 It is costly 4 There may be security issues 5 There is no one to train the personnel 6 There is difficulty finding trained personnel to use PCs No significant differences in responses across industry age and size
Perceptions whether it Approximately half the sample felt the use of PCs would would help if PCs are used not help The remaining feel it would help in improving
speed accuracy and efficiency PC could also be useful in communications e-banking and marketing efforts
Possible motivators to use PCs
1 When business needs grow 2 Financial support is provided 3 Technical support is provided
Perceptions of most 1 Subsidising training in using PCs favoured types of 2 Providing PC adoption consulting services Government support 3 Providing tax incentives
4 Providing more information on the costs and benefits of using PCs 5 Holding training workshopsseminars Older firms find subsidising training in using PCs providing PC adoption consulting services and providing tax incentives to be far less useful than the younger firms
ICT Stage - Using PCs What are the most used Most popular software packages are Word processing software packages Computer security and spreadsheet (The least popular are
HRMTraining and Presentation)
On the whole the use of software packages is different
54
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
across industries Are custom-made software packages popular
Overall these packages are used very little However when the number of employees increases so does the usage of these custom-made packages The usage also differs across industries
Where have PCs added value
1 Improving operational efficiencyreducing costs 2 Improving customer services 3 Providing competitive advantage 4 Exploring new opportunities for growing business 5 Increasing sales
Differences in perceptions of value added across industry and age
Is there a relationship between Perceived Value and PC Usage
Yes we find a correlation between perceived value of PCs to the business and the extent to which firms use PCs
92 Usage of the Internet ndash Stage 2
This section focuses on those respondents who have PCs and may or may not use the Internet As stated earlier 87 (789 responses) of the survey respondents use PCs We found that 90 of the PC users also use the Internet only 10 do not (refer to Appendix 30)
921 Not Using the Internet
What are the reasons for the respondents to use PCs and not the Internet In order of importance the following are the top 3 reasons the firm does not use the Internet despite having a PC (refer to Appendix 31)
It is not really needed
It is costly
Business partners and customers are not using the Internet
However there was not any clear support for any of the reasons as being the overwhelming cause for not using the Internet
55
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees Where the sample size for a sector was not large enough (less than10) these sectors were excluded from the analysis or in case of ImportExport sub-sectors they were clustered together We found no significant differences about the reasons for not using the Internet across different sectors the companyrsquos size or age (refer to Appendix 32)
Our next step was to understand whether these respondents who did not use the Internet were actually aware of the possible benefits of the Internet If they did not think the Internet was useful it would suggest that there is a larger issue of improving their awareness On the other hand if they perceived the Internet to have clear benefits but still did not use it it would imply that the barriers mentioned are the real cause of the lack of Internet usage
Accordingly our next analysis was on the response to the question ldquoDo you think that using the Internet would help improve your business If so howrdquo
There were six responses to this open-ended question (refer to Appendix 33) Five of them said that the Internet would not help improve their business while one stated that it could be more convenient This may suggest that a lack of business need combined with a lack of awareness of the benefits of the Internet is the reason these respondents who have not opted for the Internet
Our next question was to ask these respondents ldquoWhat would really motivate or push you to use the Internetrdquo
Nine replies were received to this question (refer to Appendix 34) five of which said that nothing would motivate them to use the Internet The other replies stated that the Internet would be considered when the business required it Only one said that a reasonable price would be a good motivator to use the Internet
We then asked the respondents ldquoHow useful would the different types of Government support be for the firm to install and use computersrdquo
We find the following as most useful types of support that the Government could provide to promote the use of the Internet (refer to Appendix 35)
Providing Internet adoption consulting services
Subsidising Internet training
56
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Providing more information on the costs and benefits of using the Internet
Holding training workshopsseminars
Building the right legal and regulatory framework
Providing tax incentives for using the Internet
Investing in ICT infrastructure
As in the case of PCs providing adoption consulting services and subsidising training are the most popular suggestions with approximately 40 of the respondents who replied to this question perceiving it to be veryhighly useful
These findings show that the respondents are looking for knowledge about the Internet and hence training (particularly subsidised training) becomes their favoured demands from the Government This conclusion also ties in to our previous suggestion that it is perhaps a lack of awareness of the benefits of the Internet that acts as the greatest barrier to its use
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees We found no significant differences in the perception of the use of different types of Government support sectors the companyrsquos size or age (refer to Appendix 36)
922 Using the Internet
As stated earlier 90 of those using PCS (665 responses) also use the Internet Our first question was to understand what the Internet was being used for This was answered by the question ldquoPlease mark the extent to which your firm uses the Internet for the following purposesrdquo
By far the most popular uses of the Internet are e-mail on-line sourcing of general information and e-banking The Internet was not used much for any other tasks (refer to Appendix 37)
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees Where the sample size for a sector was not large enough (less than10) these sectors were excluded from the analysis or in case of ImportExport sub-sectors they
57
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
were clustered together We found significant differences in the use of the Internet across several dimensions however have focused on the three most frequently used applications of e-mail on-line sourcing of general information and e-banking for the purpose of our analysis (refer to Appendix 38)
bull Sector Email is used across all sectors Only the Real Estate sector uses it less in comparison with other sectors
bull Number of Employees There are no significant differences noted in the use of the Internet based on the number of employees
bull Number of Years in Business The use of e-banking differs significantly based on the age of the company The younger firms use e-banking far more than the older firms
The next stage was to gauge the popularity of the Internet among its users which was answered by the open-ended question ldquoDo you think that using the Internet more would help improve the business of your firm If so howrdquo
We received 123 replies to this question from the mail email and telephone surveys of which 53 respondents felt that more usage would not help improve the business (refer to Appendix 39)
The main areas where the remaining respondents suggested that operations could further improve with the further use of Internet were
bull MarketingSales development
ldquoNeed it for searching for new customers opening up markets etcrdquo
ldquoWe can sell more products and get new products information We can compare the price of products in the same industry We can also give pictures to clients more easilyrdquo
ldquoTo set up the companys website so the clients can make online orders for our productsrdquo
bull Speedy communication
ldquoIt would increase the internal communication between each branchrdquo
58
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ldquoWe mainly use the Internet for sending and receiving emails in our business operationsrdquo
bull Ease of searching for information
ldquoSearch enginesrdquo
ldquoYes it will help us to search for new products and improve our knowledge about clients and manufacturersrdquo
bull Efficiency and cost reduction
ldquoIt will fasten the communication with clients and will save more timerdquo
923 Value Added by Internet Usage
The next stage was to understand the link between the Internet usage and the perceived value added Towards this end to understand in which areas of the business was the value addition perceived we first analysed the responses to the question ldquoHow much value do you think the Internet has added to the following aspects of your businessrdquo
The following are seen in order of importance as the most important areas were the use of the Internet brings value to the business by (refer to Appendix 40)
Improving operational efficiencyreducing costs
Improving customer services
Providing competitive advantage
Prompt response to market changes
Exploitation of network opportunities
Increasing sales
Creation of new productsservices
Penetration into new markets
59
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Similar to the usage of PCs improving operational efficiency and improving customer service are also perceived to be the two top value-adding dimensions of Internet use
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees (refer to Appendix 41) We find significant differences in the perception of value added across sectors and according to the age of the firm across each and every dimension (not however based on the companyrsquos size)
bull Sector We find significant differences in all the dimensions across sectors Below we highlight the top two value-adding dimensions
Increasing operational efficiency ndash Firms belonging to the Business Services Import amp Export ndash Consumer durable Goods and Import amp Export ndash Consumer Non-durable Goods ndash see high potential for improving efficiency using the Internet However those belonging to the Transport amp Storage Real Estate and Construction sectors do not in comparison perceive as much value
Improving customer service ndash The usage of the Internet being perceived to improve customer service is far more pronounced in the Import amp Export ndash Consumer durable Goods Business Services and Import amp Export ndash Consumer Non-durable Goods sectors On the other end of the spectrum similar to the PC usage such potential is not seen by the respondents in the Transport amp Storage Construction and WholesaleRetail sectors
bull Number of Years in Business The value added by improving operational efficiency due to Internet usage is perceived to be significantly higher by the younger companies than the older ones and hence shows a linear relationship
For all the other dimensions such as improving customer service the value-adding perception of the Internet first increases from those firms less than 3 years old to those firms in the 3-7 years group and then again drops in the more than 7 years old set Hence it shows an inverted U relationship
924 Relationship between Perceived Value and Internet Usage
We performed correlation analysis between value and Internet usage We conducted our analyses according to industry firmrsquos size and age to check for possible differences along these three dimensions (refer to Appendix 42) We had to exclude from analysis Restaurants Communications and Real Estates sectors because of small sample size
60
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Sector We found significant relationships between perceived value of Internet and usage for all sectors
bull Number of Employees We had to exclude from analysis companies with more than 50 employees because of small sample size We found significant relationship between perceived value of Internet and usage in both very small (less than 10 employees) and small (10-49 employees) firms
bull Number of Years in Business We found significant relationship between perceived value of Internet and usage irrespective of the age of the business
Overall we find a correlation between perceived value of the Internet to the business and the extent to which firms use the Internet
925 Summary of findings for Section 92 ndash Stage 2
ICT Stage - Not Using the Internet
Reasons for not using the Internet
1 It is not really needed 2 It is costly 3 Business partners and customers are not using the Internet No significant differences in responses across industry age and size
Perceptions whether it would help if the Internet is used
Only six responses of which five said that the Internet would not help improve their business
Possible motivators to use the Internet
Among the nine replies received to this question five said that nothing would motivate them to use the Internet Others stated business needs and a reasonable price as possible motivators to use the Internet
Perceptions of most favoured types of Government support to use the Internet
1 Providing Internet adoption consulting services 2 Subsidising Internet training 3 Providing more information on the costs and benefits of using the Internet 4 Holding training workshopsseminars 5 Building the right legal and regulatory framework 6 Providing tax incentives for using the Internet 7 Investing in ICT infrastructure
ICT Stage - Using the Internet
61
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
What is the Internet most used for
The most popular uses of the Internet are e-mail on-line sourcing of general information and e-banking
Areas where using the Internet more would help improve the business
1 Marketing and sales development 2 Speedy communication 3 Ease of searching for information 4 Efficiency and cost reduction
Where has the Internet added value
1 Improving operational efficiencyreducing costs 2 Improving customer services 3 Providing competitive advantage 4 Prompt response to market changes 5 Exploitation of network opportunities Significant differences in the various dimensions across industries and age
Is there a relationship between Perceived Value and Internet Usage
Yes there is a correlation between perceived value of the Internet to the business and the extent to which firms use it
93 Usage of a Website ndash Stage 3
This section focuses on those respondents who use the Internet but may or may not have a Website Of the total sample size of 897 responses in the survey 322 respondents have a Website (refer to Appendix 43)
931 Not Using a Website
We first analysed the data to try and understand the reasons for those respondents who use the Internet but do not have a Website
There were no real strong views expressed as to why the firm do not have a Website In order of importance the following are the top five reasons (refer to Appendix 44)
It is not really needed
Maintenance is difficult and expensive
It is costly
62
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Online marketing is not common in the industry
Online transaction is not common in the industry
Hence it seems that the main reasons for not creating a Website has to do with the fact that the businessmarket does not see the need for it or perceive the expense associated with creating and maintaining a Website to be high
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees Where the sample size for a sector was not large enough (less than10) these sectors were excluded from the analysis We found no significant differences about the reasons for not having a Website across different sectors the companyrsquos size or age (refer to Appendix 45)
Our next step was to understand whether these respondents who did not have a Website were actually aware of the possible benefits of one Depending on the answer it would be a case of either increasing their awareness (assuming that there were some real benefits for them having a Website which they were not aware of) or attempting to alleviate their perceived barriers to creating one (if despite of not having a Website they perceive that having one would be beneficial)
Accordingly our next analysis was based on the responses received to the question ldquoDo you think that creating a Website would help improve your business If so howrdquo
This question was addressed to those respondents who use computers and the Internet but do not have a Website In all 134 responses were received to this question (refer to Appendix 46) Of these responses 75 felt that a Website would help These reasons can be clustered around the following three themes
bull Improving the firmrsquos presence and promote marketing efforts by attracting new customers thereby increasing revenue
ldquoIt would allow the clients to learn about our companys products and their characteristics even when they stay at homerdquo
ldquoOverseas clients can search for our companys information and increase business opportunitiesrdquo
ldquoYes it will allow the customers to get access to the companys information such as the branches addresses and telephone numbersrdquo
63
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Enhancing the firmsrsquo credibility reputation and image
ldquoIt will provide presence credibility PRrdquo
ldquoIt will give people the feel that the firm is of larger scalerdquo
bull Providing additional information on the company and its products
ldquoYes it will be more convenient for clients to understand the company and increase business opportunitiesrdquo ldquoYes increase the companys reputation and increase the availability of the product informationrdquo
Having understood the reasons a Website would be considered useful for business the next stage was to understand ldquoWhat would really motivate or push you to create a Websiterdquo
As above this question was addressed to those respondents who used the Internet but did not have a Website There were 135 replies to this question (refer to Appendix 47) The principal factors given by the respondents that would really motivate or push them to create a Website can be clustered as follows
bull When it is perceived that the business requires it
ldquoWhen there are business needsrdquo
ldquoThe company is at dormancy period we will consider about it after the business recoversrdquo
ldquoTo search for networking opportunitiesrdquo
ldquoWhen we have a certain number of customers and business volumerdquo
bull When suitable training and technical support is available
ldquoWhen there is an expert to prepare the Websites contentrdquo
ldquoWhen it is easy to create the Website When the web hosting is cheap and easy to updaterdquo
bull When some financial support is provided
64
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ldquoCheap pricerdquo
ldquoWhen we do not have to pay a huge feerdquo
ldquoWhen the costs is proportional to the returnsrdquo
ldquoFree of charge low costs with subsidy providedrdquo
bull When the firm has adequate resources
ldquoHave spare time and moneyrdquo
ldquoWhen there are enough human material and capital resourcesrdquo
Once again as in the case of PC and Internet usage it appears that business needs is the main driver for creating a Website Our next step was to understand the areas where the respondents perceived that the Government could specifically intervene to help them develop a Website This was done through the question ldquoHow useful would the different types of Government support be for the firm for creating a Websiterdquo
In order of importance the following are the three most useful types of support that the Government could provide to promote the use of Websites (refer to Appendix 48)
Subsidising ICT training
Providing ICT adoption consulting services
Providing tax incentives for ICT investments
Subsidising training in the use of ICT was the most popular suggestions with 60 of the respondents who replied to this question perceiving it to be veryhighly useful
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the size or the age of the firm (refer to Appendix 49) We found no significant differences across different sectors the companyrsquos size or age
65
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
932 Respondents Having a Website
Our first level of analysis from this group was to understand what the Website was being used for through the question ldquoPlease mark the extent that your firm uses its Website for the following purposesrdquo
The most popular uses of the Website are for ldquoProviding information on the firms products and servicesrdquo followed by ldquoHandling of business enquiryrdquo None of the other purposes were at all popular in comparison (refer to Appendix 50) This would suggest that these should be the two key focus areas while spreading awareness of the benefits of creating a Website
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees Where the sample size for a sector was not large enough (less than10) these sectors were excluded from the analysis We found some differences in the use of the Internet across these dimensions across different sectors the companyrsquos size or age (refer to Appendix 51)
bull Sector Usage of the Website to receive online orders varies significantly with Construction and Finance amp Insurance sectors using this facility far less than the other sectors
bull Number of Employees Access to Government Information is more popular in the firms that employed 10-49 people than the smaller firms (We have excluded the firms with 50-100 people from the analysis as their sample size was less than 10)
bull Number of Years in Business Receiving of online payments is more popular for the younger firms than the older ones
933 Value Added from Having a Website
The next stage was to gauge how much value the respondents perceived a Website provides This was answered by analysing the responses to the open-ended question ldquoHow much value do you think your Website has added to the following aspects of your businessrdquo
On the whole the respondents do not see any factor as having added significant or great value The maximum support was for ldquoImproving operational efficiencyreducing costsrdquo
In order of importance the following are the top five areas where some value is perceived to ensue by having a Website (refer to Appendix 52)
66
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Improving operational efficiencyreducing costs
Improving customer services through integrated processes
Providing competitive advantage
Strengthening the relationships with business partners
Improved productivity through service integration
Similar to the usage of PCs and the Internet improving operational efficiency and customer service are the two top dimensions of having a Website
We further tried to analyse the above data to understand if there were any differences in responses based on the sector the firm belonged to the age of the firm or its number of employees Where the sample size for a sector was not large enough (less than10) these sectors were excluded from the analysis or in case of ImportExport sub-sectors they were clustered together (refer to Appendix 53) We found significant differences in the perception of value across different sectors and the companyrsquos size but not the companyrsquos age
bull Sector There is a significant difference in the perception of value for network opportunities across sectors but this dimension is not perceived to be overall an influential factor
bull Number of Employees There are significant differences in the perception of value for ldquoStreamlining of the business promoting flexibilityrdquo with the value added for this factor increasing with the number of employees This seems logical as it can be expected that the larger the firm the greater would be its demand for streamlining the business (We have excluded the firms with 50-100 people from the analysis as their sample size was less than 10)
934 Relationship between Perceived Value and Website Usage
We performed correlation analysis between perceived value and Website usage We conducted our analyses according to industry firmrsquos size and age to check for possible differences along these three dimensions (refer to Appendix 54) We had to exclude from analysis Manufacturing Construction Restaurants Transport and Storage
67
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Communications Financing and Insurance and Real Estates sectors because of small sample size We also clustered the three sub-sectors of Import and Export because of small sample size
bull Sector We found no significant relationships between perceived value of a Website and its usage for any of the three sectors remaining in the analysis
bull Number of Employees We found no significant relationship between perceived value of a Website and its usage irrespective of the firmrsquos size
bull Number of Years in Business We found no significant relationship between perceived value of a Website and its usage irrespective of the age of the business
In sum we find no evidence of any correlation between perceived value of a Website to the business and the extent to which firms use a Website
935 Summary of findings for Section 93 ndash Stage 3
ICT Stage - Not having a Website Reasons for not having a Website
1 It is not really needed 2 Maintenance is difficult and expensive 3 It is costly 4 Online marketing is not common in the industry 5 Online transaction is not common in the industry No significant differences in responses across industry age and size
Perceptions whether it would help having a Website
56 felt that it would help by 1 Improving the firmrsquos presence and promote marketing
efforts by attracting new customers thereby increasing revenue
2 Enhancing the firmsrsquo credibility reputation and image 3 Providing additional information on the company and
its products Possible motivators to 1 Business needs create a Website 2 When suitable training and technical support is
available 3 When some financial support is provided 4 When the firm has adequate resources
Perceptions of most 1 Subsidising ICT training favoured types of 2 Providing ICT adoption consulting services Government support to 3 Providing tax incentives for ICT investments create a Website
68
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ICT Stage ndash Having a Website What is the Website most used for
1 Providing information on the firmrsquos products and services
2 Handling of business enquiry
Where has using the Website added value
1 Improving operational efficiencyreducing costs 2 Improving customer services through integrated processes 3 Providing competitive advantage 4 Strengthening the relationships with business partners 5 Improved productivity through service integration
A few differences in the various dimensions across industries and size
Is there a relationship between Perceived Value and Website Usage
No evidence of any correlation between perceived value of a Website to the business and the extent to which firms use a Website
94 Integration of the Website
In accordance with our conceptual framework the final stage of ICT usage appears when the firmrsquos Website is integrated with the firmrsquos and the business partnerrsquos database
Of the 322 respondents who had a Website we found that approximately 20 (67 firms) had it integrated with the firmrsquos database (refer to Appendix 55) Approximately 15 (47 firms) had their Website integrated with their business partnersrsquo databases (refer to Appendix 56)
95 Perceptions of Overall ICT Usage and Value Added
As part of the overall analysis we sought the perception of all respondents as to the extent that they use ICT and the value they think such use brings to the firm
There were in all 584 valid responses received to this question taking into account the PC Users and after excluding RestaurantsHotel (605) and Communications (702) on account of a low sample size (refer to Appendix 40)
69
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
The overall ICT usage was quite high with about 61 using it oftenvery often Of the remaining 39 25 use it sometimes and 14 use it not at allvery little (refer to Appendix 57)
A similar break-up was seen in the perception of using more ICT contributing to the value added of the firm with about 61 of the respondents seeing significantgreat value added with more ICT Usage 29 see some value added and only 10 see novery little value added (refer to Appendix 58)
Further analysis showed that these perceptions varied across sectors and companyrsquos size and age (refer to Appendix 59)
bull Sector There are significant differences in overall ICT usage in different sectors Firms belonging to the Finance amp Insurance Import amp Export and Business Services sector are high users of ICT On the other hand the firms belonging to the Restaurants Real Estate and WholesaleRetail are low users
In terms of the perceptions vis-agrave-vis the value-adding effect of ICT we found significant differences across sectors with firms belonging to the Finance amp Insurance Import amp Export Business Services and Manufacturing having a much higher perception of increased value added with ICT usage than those in the Restaurants Real Estate and WholesaleRetail sectors
bull Number of Employees Overall ICT usage is higher in firms employing 10-49 people than those employing less than 10 people (We have excluded the firms with 50-100 people from the analysis as their sample size was less than 10) This also held true for the perception of using more ICT contributing to the value added of the firm being the highest for this group Once again it suggests that the size of the firm is critical for it being perceived that there is value addition to be had with ICT usage
bull Number of Years in Business Overall ICT usage is perceived to be lowest in the group of firms over 7 years in business This suggests that the newer and younger firms perceive that they use ICT far more than the older ones There are no significant differences in the perceptions vis-agrave-vis the value-adding effect of ICT based on the number of years in business
96 Relationships between Overall Value and Extent of ICT Use
We performed regression analysis of the two questions soliciting perceptions about the overall extent of ICT use and the extent to which using more ICT would add value to the firm More precisely we wanted to know if the overall perceived value of ICT is
70
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
dependent on the extent of ICT use We conducted our analyses according to sector firmrsquos size and age to check for possible differences along these three dimensions (Appendix 60) We had to exclude from analysis Restaurants and Communications sectors because of small sample size
bull Sector We found direct relationship between the overall ICT value and the extent of ICT use for all the ten sectors remaining in the analysis In other words SMEs see an increase in value to the firm with the use of ICT increases irrespective of the sector
bull Number of Employees We found direct relationship between the overall ICT value and the extent of ICT use irrespective of the firmrsquos size
bull Number of Years in Business We found direct relationship between the overall ICT value and the extent of ICT use irrespective of the firmrsquos age
In sum the respondents see a very clear connection between the perceived overall value of ICT and the overall extent of ICT use
97 Stages of ICT Development
We checked to see if there are differences in responses across the three stages of ICT development with regard to issues related to reasons for not using different types of ICT (PCs the Internet Website) and government support that would facilitate and encourage ICT adoption at the three stages In the process we took into consideration the firmrsquos age size and sector We also examined the effect of the stage of ICT development on perceived value of ICT taking into consideration the firmrsquos age size and sector46
971 Government Support
We asked non-PC users non-Internet users and non-Website users to rate the usefulness of different types of Government support as a means to help companies adopt these technologies The results of these analyses are shown in Appendix 62
The following table shows the results of the hypotheses that there are no differences between responses regarding various types of Government support at different stages of ICT development
46 Two-Way Analysis of Variance was used to test the hypothesis that there are no differences in a variable (eg degree of Government support) across the three stages of ICT development simultaneously taking into account the effect of other factors such as the firmrsquos size age or sector For ease of presentation we do not include the effect of interaction between stage of development and the firmrsquos size age or sector
71
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Type of Government Support Hypothesis
Holding training Workshop Supported
Providing tax incentive Not Supported
Providing more information on costsbenefits Supported
Providing consulting Supported
Subsidising training Supported
Investing in ICT Infrastructure Supported
Building legal framework Supported
More specifically we found that the importance of providing tax incentive is significantly different at different stages of development non-PC users perceive it to be more important than non-Website users than non-Internet users
972 Reasons for Not Using ICT
We also asked non-PC users non-Internet users and non-Website users to rate the importance of different set of reasons for not using ICT at different stages of development The results of these analyses are shown in Appendix 63
The following table shows the results of the hypotheses that there are no differences between responses regarding reasons for not using ICT at different stages of development
Applicable to only Stages 2 and 3
72
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Reasons for Not Using ICT Hypothesis
It is costly Supported
It is not really needed Supported
Difficulty in finding trained personnel Not Supported
No one to train the personnel Supported
Difficulty and expensive to maintain Supported
Security issues Supported
Partners not use Internet Supported
Competitor not use Internet Supported
We found significant difference only in terms of difficulty in finding trained personnel at different stages of development non-Website users perceive this factor more important than non-PC users than non-Internet users
973 ICT Value
We asked PC users Internet users and Website users to rate the extent to which ICT results in business value at different stages of development The results of these analyses are shown in Appendix 64
The following table shows the results of the hypotheses that there are no differences between responses regarding the value-adding effect of ICT at different stages of development
Applicable to only Stages 2 and 3
73
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ICT Value Hypothesis Comment
Improving operational efficiency Not Supported PC users gt Internet users gt Website users (This implies that Internet users perceive greater value added for this factor than Website users while PC users perceive even more value added than the Internet users)
Improving customer services Not Supported PC users gt Internet users gt Website users
Increasing sales Not Supported PC users gt Website users gt Internet users
Penetration into new markets Not Supported PC users gt Website users gt Internet users
Providing competitive advantage Not Supported PC users gt Website users gt Internet users
Prompt response to market changes Supported No difference
Exploitation of network opportunity Supported No difference
Creation of new productsservices Not Supported Website users gt Internet users
We found significant differences among all but two factors The value of ICT in terms of improving operational efficiency and customer services is highest among PC users flowed by Internet and website users The value of ICT in terms of increasing sales penetration into new markets and providing competitive advantage is highest among PC users followed by Website users and then Internet users Website users see higher value in ICT than Internet users in terms of creation of new productsservices
In sum the above analyses show that by and large SMEs see different value in ICT at different stages of ICT development
Applicable to only Stages 2 and 3
74
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
98 Factors Influencing ICT Adoption
981 Value Added as a Function of ICT Usage Size Age Stage and Sector
We performed regression analysis between value added47 and ICT usage size age stage and sector We excluded from our analysis three sectors (Restaurants Communications and Real Estate) because of their small sample size (refer to Appendix 65)
We found an overall significant model with a high R square of 63648 More specifically we found
bull Significant and direct relationship between value added and ICT usage bull No significant relationship between value added and size bull Significant relationship between value added and age with newer firms seeing
greater value added than the older ones bull Significant relationship between value added and stage of ICT usage with highest
value added perceived in Stage 3
982 Revenue as a Function of ICT Usage Size Age Stage and Sector
We repeated the above analysis but this time used revenue as the dependent variable We found an overall significant model with a modest R square of 083 (refer to Appendix 66) More specifically we found
bull No significant relationship between revenue and ICT usage bull Significant relationship between revenue and size Not surprisingly we found a
direct correlation between revenue and size with the negative sign of slope showing that the revenue is directly related to firmrsquos size with the larger the firm the higher the revenue
bull No significant relationship between revenue and age bull Significant relationship between revenue and stage of ICT usage There is a direct
relationship here with a higher stage showing higher revenue
47 As stated earlier for the purpose of this report ldquoValue addedrdquo refers to the responses received to the survey question of the type ldquoHow much value do you think PCs have added to the following aspects of your businessrdquo This question was repeated for each stage that is ldquoHow much value do you think the Internet has added to the following aspects of your businessrdquo and ldquoHow much value do you think the Website has added to the following aspects of your businessrdquo
48 In regression a significant prediction means that a significant proportion of the variability in the predicted variable can be explained by the predictor variable R square ranges from 0 to 1 with 0 showing no correlation and 1 showing a perfect correlation
75
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull No significant relationship between revenue and sector except for Import amp Export ndash Consumer durable goods
99 Predictors of ICT Adoption
We performed discriminant analysis49 to find the predictors of ICT adoption at various stages (refer to Appendix 67)
Discriminant models can be used to predict the likelihood of adoption of PC or other types of ICT in a firm possessing different characteristics in terms of revenue size age and sector By plugging in the corresponding values of these variables in the model for example we can calculate the value of the discriminant function for a very small manufacturing firm (say with 4 employees) that has been in business less than say three years and that has certain amount of revenue We can then compare this value with that of another manufacturing firm with different size age or revenue to see which one is more likely to adopt PC The higher the value the discriminant function the higher likelihood of the adoption would be
991 PC Adoption
We used revenue size and age as predictors of PC adoption We found the model not to be significant In other words the three independent variables used in the model did not have predicting power to discriminate between PC adoptersnon adopters
We repeated the above analysis by introducing sector as an additional predictor This time we found a significant model where
bull PC adoption is inversely related to revenue (smaller firms are more likely to adopt PCs)
bull PC adoption is inversely related to size (smaller firms are more likely to adopt to adopt PCs)
bull PC adoption is more likely among firms that are between 3-7 years old
992 Internet Adoption
49 Discriminant analysis uses one or more independent variables to predict the likelihood of a categorical variable (eg adoptnot adopt)
76
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
We repeated the analysis for Internet adoption but we also included the level of PC usage as an additional predictor We found a significant model where Internet adoption is directly related to PC usage More specifically we found that
bull Internet adoption is inversely related to revenue bull Internet adoption is inversely related to size (smaller firms are more likely to
adopt) bull Internet adoption is more likely among firms that are between 3-7 years old This
makes intuitive sense as the latter firms have had time to experiment with PCs and thus would be more likely to adopt the Internet
bull Internet adoption is directly related to PC usage
993 Website Adoption
We repeated the analysis for Website adoption but this time included the level of PC and Internet usage as an additional predictor We found a significant model where
bull Website adoption is directly related to revenue (larger firms are more likely to adopt)
bull Website adoption is directly related to size (larger firms are more likely to adopt) bull Website adoption is more likely among firms less than 3 years and those over 7
years old than those 3-7 years old bull Website adoption is directly related to PC and Internet usage
In summary the above results show that
bull PC and Internet adoption is more likely among small firms while Website adoption more likely among large firms
bull PC and Internet adoption is more likely among firms 3-7 years old while Website adoption more likely among very young or old firms
bull Both Internet adoption and Website adoption are influenced by prior usage of ICT
910 Performance Differences between ICT Adopters and Non-Adopters
We also tried to see if there are any performance differences between ICT adopters and non-adopters This would help answering the question of whether or not some SMEs missed opportunities by not adopting ICT In other words it would be useful to find out if the adopters performed better than their non-adopting counterparts
77
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
For each of the three stages of the adoption we used revenue as a proxy for the firmrsquos performance We tried to see if revenue is dependent of adoptionnon-adoption accounting for the sector (refer to Appendix 68)
The models related to PC and Internet adoption were found to be not significant indicating that there doesnrsquot seem to be any ldquomissed opportunityrdquo among the non-adopters The model for Web adoption had a very small R-square and was good only at 10 level of significance with only one sector having significant coefficient (ImportExport ndash Consumer durable goods) This indicates that there might be missed opportunities only among this sector when it comes to the decision to adopt Website
911 Hypotheses
H1 Organisational readiness measured by factors such as its ICT infrastructure managerial and language skills number of ICT qualified employees and absorptive capacity affects the ICT adoption decision of Hong Kong SMEs
We have found support for this hypothesis at all stages of ICT development It was expected that qualified and highly skilled workers could make ICT adoption easier as higher education would make them more innovative and increases the SMErsquos overall readiness for innovation One of the principal perceived inhibitors to ICT Usage has been consistently mentioned as a lack of technical skills with ldquothere is no one capable of using itrdquo being oft-mentioned in the responses
H2 The stage of development affects the ICT adoption decisions of Hong Kong SMEs
This hypothesis was related to the age of the firm and it was suggested that there is a gradual development of ICT Usage which is in line with the firmrsquos style of business where strategy is evolved through a process of learning and experimentation50
This hypothesis was supported to some extent where analysis of our data particularly the interviews and case studies confirmed that there are two distinct types of SMEs - the traditional ones who have been in business for some years and tend to stick to their old style of doing business and then the modern SMEs who are quicker in adopting new technologies
In general it was also found that overall ICT Usage was perceived to be lowest in the group of firms over 7 years in business This suggests that the newer and younger firms
50 Simmons G Armstrong G A and Durkin M G (2008) A conceptualization of the determinants of small business Website adoption Setting the research agenda International Small Business Journal 26(3) pp351-389
78
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
perceive that they use ICT far more than the older ones Even among those that had no ICT adoption as in no PCs it was observed that the younger firms which had been in existence for a period less than 7 years found subsidised training in using PCs providing PC adoption consulting services and providing tax incentives to be far more useful as Government support than the older firms This would suggest that these younger firms also appear to be far more open to the use of PCs
H3 Business cyclical factors affect the ICT adoption decisions of Hong Kong SMEs
It was hypothesised that in a period of economic downturn SMEs are often the worst affected and would not normally invest in ICTs We found significant support for this hypothesis with a large number of SMEs stating that they would invest in ICT only when their business improves given the current economic downturn
H4 Market competition measured by number of existing and new competitors affects the ICT adoption decisions of Hong Kong SMEs
H5 Pressure from business partners measured by the adoption of digital transactions along the supply chain affects the ICT adoption decisions of Hong Kong SMEs
We did not see much support for these hypotheses in the first Stages of PC adoption However by Stage 2 where the Internet was being used there was some mention of competition and the market conditions for Internet Usage It was only in Stage 3 though where the respondents had a Website that there was clear support for this hypothesis with providing competitive advantage listed as the third most popular area where the Website added value to the business This was followed by strengthening the relationships with business partners and improved productivity through service integration
H6 Perceived operational benefits measured by improved operation efficiency cost savings inventory control and accurate and timely management of information affect the ICT adoption decisions of Hong Kong SMEs
This hypothesis was strongly supported by our analysis of data At each stage of ICT adoption improving operational efficiency was rated as the top value addition made on account of the use of the PCInternetWebsite For those who had not yet made this investment this factor was perceived to be the greatest attraction
H7 Perceived strategic benefits measured by market expansion new business models new productsservices improved company image and developed innovative capacity affect the ICT adoption decisions of Hong Kong SMEs
79
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Support for this hypothesis was largely seen in Stage 3 only where the creationuse of a Website was perceived to add strategic benefits in terms of improved company image market expansion and new productsservices In Stage 1 and 2 this was not as visible
H8 ICT affordability affects the ICT adoption decisions of Hong Kong SMEs
This hypothesis was supported by the analysis of data whereby it was observed that limited financial resources particularly given the current financial downturn in the economy was frequently cited as a barrier to ICT investment Cost of buying and maintaining the ICT equipment was thus an important constraint for ICT adoption decisions
H9 Lack of information measured by the availability of information on the ICT its functions costs and benefits affects the ICT adoption decisions of Hong Kong SMEs
We would suggest that this hypothesis has been supported by the conclusion we have drawn that a lack of knowledgeawareness about the benefits of the ICT adoption has recurred as a barrier to its investment Our conclusion is further supported by the fact that consistently across all stages of ICT adoption the top two Government support types requested for are providing (subsidised) ICT training and ICT adoption consulting services
H10 Lack of confidence in the legal framework regulating electronic transactions affect the ICT adoption decisions of Hong Kong SMEs
We did not find any support for this hypothesis as the SME respondents did not perceive the legal environment in Hong Kong to be a significant deterrent for ICT adoption
Conclusion
Based on literature review we formulated the above set of hypotheses We found general support for Hypotheses 1 to 9 thus providing evidence that in terms of making ICT adoption decisions Hong Kong SMEs are not different than those in other countries
We believe the reason we did not find support for the last hypothesis has to do with the misconception of Hong Kong SMEs about the legal framework regulating electronic transactions given that Hong Kong has an excellent legal and regulatory framework
80
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
10 SELECTED INDUSTRIES CASE STUDIES AND COMPARISONS WITH OTHER COUNTRIES
As stated earlier we have identified the following industries for further analysis
WholesaleRetail sector which shows a significant correlation between the Value Added and the ICT Usage
ImportExport Trade sector as this contributes almost half of the Value Added of SMEs to the Hong Kong economy This ImportExport sector has been further sub-divided in 3 areas
bull Import and Export Trade (Consumer non-durable goods) bull Import and Export Trade (Consumer durable goods) bull Import and Export Trade (Miscellaneous goods)
Business Services which shows a significant correlation between revenue and the extent of ICT use
Manufacturing sector based on the correlation observed in the analysis done at CampSD
For each of the above 6 sectors there were two detailed interviews conducted the findings of which have been reported as qualitative case studies to complement our quantitative findings
101 WholesaleRetail Sector
The WholesaleRetail sector has been identified as one of the sectors with high potential to benefit from further ICT investments This is based on the analysis of our survey where we found a significant correlation between the Value Added and the ICT Usage in the WholesaleRetail sector
This is echoed by a productivity study in Australia51
bull In the Wholesale sector it has been found that technology has led to an increase of productivity by changing inter- and intra-organisational relationships New technologies used in product numbering and scanning have improved accuracy and reduced the labour content of distribution by allowing real-time transmission of information and inventory control For larger firms the use of warehouse
51 Johnston A Porter D Cobbold T and Dolamore R 2000 Productivity in Australiarsquos Wholesale and Retail Trade Productivity Commission Staff Research Paper AusInfo Canberra
81
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
management system a component of Enterprise Resource Planning has also helped to create an integrated base for business management Transportation efficiency can also be improved by using new technologies that can take account of vehicle capacity traffic flows and congestion patterns
bull In the Retail sector it shows that ICTs particularly scanning technologies has reduced labour input and changed management systems hence improving productivity
Our study also suggests that the Governmentrsquos provision of IT consulting services and training support to the WholesaleRetail sector is necessary
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
The understanding of online customers has also been emphasized in other studies53
Therefore it seems to suggest that the training and consulting services provided by the Government to develop online business should not only focus on technical aspects also business management aspects
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
53 Shern S (2001) Online Retailing Ernst amp Young Lee MY and Johnson KP (2001) Exploring differences between internet apparel purchasers browsers and non-purchasers Journal of Fashion Marketing and Management 6(2) pp 146-157
82
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
83
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
84
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
85
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
86
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
102 Import and Export Trade
Our study has suggested that the Government should focus on the Import and Export SME sector for promoting ICT investments - not only because it contributes a significant 48 of the value added of SMEs in Hong Kong but also the nature of this industry suggests that ICT usage such as web presence will become a necessity in the future
However unlike what we found in the WholesaleRetail and Business Services sector our analysis using the data from the CampSD and our own survey data did not show a significant co-relation between ICT usage and value added We only found a direct relationship between revenue and the extent of ICT use for the Import amp Export ndash Miscellaneous Goods sector Indeed it appears that the use of the Internet or other Internet-based applications may not increase the revenue for all importers and exporters in the long term even though some trading companies can enjoy some short-term benefits The rationale behind our above conjecture is that the level of consumer spending which determines industrial demand in international trade will not be affected by the penetration of the Internet of importers and exporters54
However a lack of a positive co-relation between ICT investment and revenue does not imply that there is no need to adopt ICTs (such as Internet and Website adoption) Our survey suggests that Import and Export sector generally perceives that the use of PCs and the Internet can help generate new business opportunities and provide competitive advantages
1021 Import and Export Trade - Consumer non-durable goods
The Import and Export ndash Consumer Non-durable sector has some special needs for business and generally perceives the use of PCs and the Internet to be beneficial
Our survey results suggest that the Import and Export ndash Consumer Non-durable sector generally perceive the use of ICTs can bring value added to the business as follows
bull The use of PCs is perceived to improve customer services and increase sales
bull The use of the Internet is perceived to improve efficiency and customer services
However this sector is also the only sector in our study which showed no significant relationship between the perceived value of PCs and its usage Therefore the Government can offer more help to this sector to use PCs and educating the people of the various benefits associated with its use
54 Peterson RA S Balasubramanian and BJ Bronnenberg (1997) Exploring the implications of the Internet for consumer marketingrdquo Journal of the Academy of Marketing Science 25 pp329-346
87
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
While encouraging businesses to use the Internet and Website the Government also needs to make it clear that access to the Internet or developing a website alone cannot guarantee sustainable competitive advantages as some studies show 55 Existing literature56 suggests that besides a website exporters also need to develop an export-specific infrastructure and export marketing strategies taking into account local product standards competition legal and regulatory considerations and many other macro and micro management issues
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
55 Samiee Saeed (1998) Exporting and the Internet a conceptual perspective International Marketing Review 15(5) pp 413-426 56 Samiee Saeed (1998) Exporting and the Internet a conceptual perspective International Marketing Review 15(5) pp 413-426
88
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
89
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
90
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
91
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
1022 Import and Export Trade - Consumer durable goods
Our analysis of the two in-depth case studies conducted in this sector suggest that the Government needs to address the potential benefits of using the Internet as a marketing and promotion tool to this sector The two case studies show an interesting contrast one is a one-year old firm using the Internet Website and other online marketing channel to promote business and the other is an 80-years old firm relying on well-established business relationships with suppliers and customers and rejecting the ideas of online marketing and promotion In our literature review we find a study in the UK57 which shows that the Internet has the potential of eroding some existing advantages of better established firms and creating a level playing field by allowing almost any interested exporter to obtain a presence on the Internet and to list its address on various directories and Internet search engines
This would also suggest that the Government needs to provide different advice to firms of different sizes and history For example with web presence younger firms may overcome some barriers faced by new businesses while older firms may use the website to present itself as a well-established experienced trader
57 Hamill J and K Gregory (1997) Internet marketing in the internationalisation of UK SMEs Journal of Marketing Management 13 pp9-28
92
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
93
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
94
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
95
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
96
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
97
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
1023 Import and Export Trade ndash Miscellaneous
The two case studies presented in this sector show that businesses have special needs which must be considered before deciding on the type of Government support to be offered
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
98
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
99
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
100
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
101
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
102
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
103 Business Services
Business Services is a promising sector in terms of expected benefits from further ICT investments Our analysis from the data available at the CampSD showed a significant correlation between revenue and the extent of ICT use for this sector
Similarly a study on US trade data has suggested that the Internet use is related to growth in business services trade 59 The Internet and other new technologies have provided a medium of exchange that can overcome historical trading hurdles for many types of business services such as the face-to-face interaction between service providers and customers therefore effectively reducing transport costs The same study has also found a correlation between Internet adoption and international trades in business services although the causality is unclear It might be both ways the increasing number of trades in business services leads firms to adopt the Internet to facilitate the trade or greater Internet penetration leads firms to use the Internet more often
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
59 Freund C and D Weinhold (2002) The Internet and International Trade in Services The Economics of Technology and Innovation May 92(2) pp138-140
103
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
Nevertheless the Government can promote ICT usage to those well-established SMEs with a long-term business relationship by suggesting that it would be beneficial in further increasing their presence We have found that a series of qualitative case studies in the UK60 have shown that marketing focus can bring benefits to older established SMEs if they can make their web presence in innovative ways for example using this as an opportunity to change their corporate image
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
60 Martin LM and H Matlay (2003) Innovative use of the Internet in established small firms the impact of knowledge management and organisational learning in accessing new opportunities Qualitative Market Research An International Journal 6(1) pp18-26
104
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[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
105
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
106
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
104 Manufacturing Sector
107
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Further to the findings obtained from our Study it appears that if the Government wants to promote the benefits of using PCs to the manufacturing sector it needs to take into account the specific needs of this industry
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
The need to address business benefits is also addressed by similar studies in other countries A study of the ICT adoption in manufacturing SMEs in the UK61 suggests that SMEs need to be advised of low-cost reliable solutions which address the needs of SMEs and show demonstrable business benefits
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
61 R Marasini K Ions and M Ahmad (2008) ldquoAssessment of e-business adoption in SMEs A study of manufacturing industry in the UK North East regionrdquo Journal of Manufacturing Technology Management Vol 19 No 5
108
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
109
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
110
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
111
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
112
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
[
This part of the document is not disclosed Please refer to endnotes (1) and (2)
]
113
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
11 FINDINGS amp RECOMMENDATIONS
One of the most significant questions raised by the Study was deciding where the Government should intervene to promote ICT Usage In other words we were looking for those industries where ICT usage has shown a significant correlation with the value addedrevenue for the industry This was found to be the WholesaleRetail sector and the Business Services sector Further as analysis showed that the ImportExport Trade sector contributed 48 of the value added of SMEs in Hong Kong this too was included in the survey
We recommended that the proposed Government assistance first focus on the WholesaleRetail Business Services and ImportExport Trade industries
111 Prior to Stage 1 PC Non-Adopters
Barriers to ICT adoption
For these firms the most important reason for not adopting a PC appears to be SMEsrsquo perception that they do not really need it They feel that they have managed well without a PC so far and see no need to make such an investment that would be difficult and expensive to maintain These perceptions are similar across all sectors size and age of the firm
When asked if they would consider buying a PC approximately 50 of these respondents said that they would not as they could not perceive how the use of PCs would help the operations of their business Lack of awareness of the benefits of PCs is in reality a great barrier to these firms
For those respondents who agreed that the use of PCs could be advantageous the main perceptions of its benefits revolve around its expected speed accuracy and efficiency
Facilitators to ICT adoption
With the principal perceived inhibitor to ICT Usage being the lack of business need for a PC the primary motivators relate to ICT being adopted when there is a business needrequirement for it The other popular facilitator mentioned is addressing the expense of the ICT investment (providing financial support and an inexpensive PCpackage) Technical support is the third facilitator
Government assistance
114
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Our analysis shows the following (in order of importance) as the most useful types of support that the Government could provide to promote the use of PCs
bull Subsidising training in using PCs bull Providing PC adoption consulting services bull Providing tax incentives bull Providing more information on the costs and benefits of using PCs bull Holding training workshopsseminars
The above suggestions are particularly notable as other than the third support of providing tax incentives (which is addressing the financial deterrent) all the others stem from the respondents attempting to address their lack of knowledgeawareness in ICT adoption
Subsidising training in the use of PCs (which addresses both the knowledge and cost barriers) and providing PC adoption consulting services are the most popular suggestions with 57 of the respondents perceive this to be veryhighly useful We found that the younger firms find subsidising training in using PCs providing PC adoption consulting services and tax incentives to be far more useful than the older firms
We recommend that the Government be aware that while providing subsidised training in the use of PCs and PC adoption consulting services the younger firms would be far more receptive than the older firms
112 Stage 1 PCs Adopters Who Have Not Yet Adopted the Internet
Barriers to ICT adoption
This group largely restricts their use to word processing computer security and spreadsheet software The comparatively more technically advanced packages or custom-made software such as HRMtraining and presentation are the least popular Finance and purchasing packages are also used very little This would perhaps be an expected finding as these respondents are at the lowest stage of ICT adoption and hence the use of PCs would be essentially for the most basic tasks
We noted that the use of software packages and custom-based packages differs across industries For instance finance packages are used significantly more in the Business Services than other sectors This leads us to believe that some barriers to ICT adoption are specific to the requirementsdemands of specific sectors
115
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
The size of the firm also appears to be an inhibitor to using advanced PC software such as finance sales and HRM packages We noted that the usage of these packages increased with an increase in the number of employees Similarly for the custom-based packages too as the number of employeesrsquo increases so does the usage of these custom-made packages This would suggest that these packages would be bought and used only when a certain critical mass is achieved in terms of the firmrsquos size
Overall we also found a correlation between perceived value of PCs to the business and the extent to which firms use PCs
We next arrived at our conclusions on why these users of the PC had not invested in the Internet The analysis of the data shows that the most popular responses are that the Internet is not needed that it is costly and that the firmrsquos business partners and customers are not using the Internet We found no significant differences in the reasons given by firms across different sectors the firmrsquos size and age
Facilitators to ICT adoption
Improving operational efficiency and customer service are the two top value additions made by the use of PCs
While the ldquoefficiencyrdquo factor is common across all sectors we found significant differences in the perception of value of PCs across industries For instance the use of PCs is seen to add far more value in terms of ldquoImproving customer servicerdquo in the Finance amp Insurance Business Services and Import amp Export ndash Consumer Non-durable Goods as compared to the Transport amp Storage Construction and WholesaleRetail sectors Similarly firms belonging to the Finance amp Insurance and Import amp Export ndash Consumer Non-durable Goods industries find high support for increasing sales by using PCs However those belonging to the Transport amp Storage and Construction sectors do not in comparison perceive much value addition in terms of sales increasing because of PCs use
Government Assistance
While promulgating the benefits of further using PCs we note that each industry has some specific requirementsdemands and different perceptions of where and how much value PCs bring to business
In terms of motivating these firms to adopt the Internet the following are the top four most popular types of support that Government can provide
bull Providing Internet adoption consulting services
116
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Subsidising Internet training bull Providing more information on the costs and benefits of using the Internet bull Holding training workshopsseminars
We found that there are no significant differences in the perception of the use of different types of Government support across different industries size of the firm or its number of employees
Providing consulting services and subsidising training are the most popular suggestions with approximately 40 of the respondents who replied to this question perceiving these to be veryhighly useful
The above findings show clearly that the respondents are looking for knowledge about the Internet and hence training and consulting become their most desired types of support expected from the Government This conclusion also ties in to our previous suggestion that at least for some segment of the population the greatest barrier to using the Internet is a lack of awareness of its benefits
Our analysis shows that on the whole Business Services and the ImportExport sectors are high users of different software packages as compared to the other industries such as WholesaleRetail sector
We recommend that while the Government promotes the benefits of using PCs it must consider the specific needsbarriers and facilitators for that sector
In terms of adopting the Internet the focus should be on the top-rated benefits of speedy and cheap communication and ease of information availability We recommended that Government assistance should concentrate on subsidising training in the use of Internet and providing Internet adoption consulting services Such training workshops should highlight the potential costs and benefits of the Internet
113 Stage 2 Internet Adopters who have not yet adopted the Web
Barriers to ICT adoption
We found that the most popular uses of the Internet are e-mail and on-line sourcing of general information applications that do not require a Website We also found that some companies especially the young ones use the Internet for e-banking
The respondents were also asked if they perceived additional use of the Internet would further improve their business The responses were mixed with almost half stating that
117
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
more Internet usage would not help improve their business while the other half felt that it would
Those who saw the potentials of the Internet identified speedy communication and ease of searching for information and improvement in marketingsales development as areas with greatest potential This is notable because marketingsales development is also the top reason for having a Website Hence it would suggest that this group would be more receptive to moving on to the next stage of creating a Website
The following reasons are mentioned as to why the firm do not create a Website lack of business need difficulty of maintenance costs lack of industry critical mass Through our interviews we further collaborate these findings as we observed that non-adoption of a Website had to do with the fact that the businessmarket had not yet evolved sufficiently for a great need of a Website and the expense associated with creating and maintaining a Website perceived to be high
We observed no significant differences about the reasons for not having a Website across different industries or based on the firmrsquos size or age
Facilitators to ICT adoption
The greatest facilitator for further Internet use would perhaps be the firmrsquos perception that ICT usage is beneficial As in the case of PCs improving operational efficiency and enhancing customer service are perceived to be the two top values ensued by the use of the Internet Providing competitive advantage and prompt response to market changes were the next most popular perception of where Internet use adds value to the business
We noted significant differences in the perception of value added across sectors and according to the age of the firm across all dimensions For instance the perception that the use of the Internet had improved customer service was far more pronounced in the Business Services sectors as compared to the WholesaleRetail sectors Similarly the value added by improving operational efficiency due to Internet usage is perceived to be significantly higher by the newer companies as compared to the older ones
Having addressed what would possibly facilitate the use of additional Internet use the next stage was to understand the principal factors that would motivate the firms to create a Website
First it was necessary to understand whether these respondents who did not have a Website were actually aware of the possible benefits of having one While 44 stated that creating a Website would not help the remaining perceive it to be useful as it would
118
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Improve the firmsrsquo presence and promote marketing efforts by attracting new customers thereby increasing revenue
bull Enhance the firmrsquos credibility reputation and image bull Provide additional information on the company and its products
Once again as in the case of PC and Internet use it appears that business needs would be the main driver for creating a Website Addressing the technical and financial constraints are the other two prime motivators
Government Assistance
It would be useful to note that each sector has some specific requirementsdemands and different perceptions of where and how much value can be added by using Internet
In terms of motivating these firms to create a Website the following are the top three most popular types of support suggested
bull Subsidising ICT training bull Providing ICT adoption consulting services bull Providing tax incentives for ICT investments
Subsidising training in the use of ICT is the most popular suggestion with 60 of the respondents perceiving this to be very useful
We noted that there were no significant differences in perceiving the use of different types of Government support across different sectors and firmrsquos size or age
We recommend that the Government when promoting the benefits of creating a Website emphasise its use in marketingsales development We also recommend that Government assistance should focus on subsidising ICT training and providing ICT adoption consulting services
114 Stage 3 Adopters of the Web
The most popular uses of the Website are for ldquoProviding information on the firms products and servicesrdquo followed by ldquoHandling of business enquiryrdquo None of the other purposes were at all popular in comparison
Similar to the usage of PCs and the Internet improving operational efficiency and customer service are the two top dimensions of having a Website
119
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
However unlike the PC and the Internet we find no evidence of any correlation between perceived value of a Website to the business and the extent to which firms use a Website
115 Overall ICT Usage and Value Added
We performed regression analysis of the two questions soliciting perceptions about the overall extent of ICT use and the extent to which using more ICT would add value to the firm More precisely we wanted to know if the overall perceived value of ICT is dependent on the extent of ICT use We found that the respondents see a very clear connection between the perceived overall value of ICT and the overall extent of ICT use
116 Differences in ICT Adoption across Stages of ICT Development
We checked to see if there are differences in responses across the three stages of ICT development with regard to issues related to Government support that would facilitate and encourage ICT adoption reasons for not using different types of ICT (PCs the Internet Website) and value of ICT We also took into account the firmrsquos age size and sector and further examined the effect of the stage of ICT development on perceived value of ICT taking into consideration these variables
In terms of rating the usefulness of different types of Government support as a means to help companies adopt these technologies we found that by and large there are no differences between responses regarding various types of Government support at different stages of ICT development The exception relates to the importance of providing tax incentive which is significantly different at the three different stages of development with non-PC users perceiving it to be more important than non-Website users than non-Internet users
We also asked non-PC users non-Internet users and non-Website users to rate the importance of different set of reasons for not using ICT at different stages of development We found that by and large there are no differences between responses regarding reasons for not using ICT at different stages of development The exception relates to difficulty in finding trained personnel at different stages of development with non-Website users perceiving this factor more important than non-PC users than non-Internet users
We then asked PC users Internet users and Website users to rate the extent to which ICT results in business value at different stages of development In general we found significant differences between responses regarding the value-adding effect of ICT at different stages of development More specifically we found improving operational efficiency and customer services are highest among PC users followed by Internet and Website users Further the value of ICT in terms of increasing sales penetration into
120
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
new markets and providing competitive advantage is highest among PC users followed by Website users and then Internet users Finally Website users see higher value in ICT than Internet users in terms of creation of new productsservices In sum the above analyses show that by and large SMEs see different value in ICT at different stages of ICT development
117 Value added as a function of ICT usage size age stage and sector
We checked to find the relationship between value added and ICT Usage size age stage and sector
We found that there was a significant and direct relationship between value added and ICT usage This was also true for the value added and stage of ICT usage with highest value added perceived in Stage 3 There was also a significant relationship between value added and age with newer firms seeing greater value added than the older ones There was however no significant relationship between value added and size
118 Revenue and ICT usage size age stage and sector
We checked to find the relationship between Revenue and ICT Usage size age stage and sector
We found that there was as expected a significant relationship between revenue and size with the larger the firm the higher the revenue There was a significant relationship between revenue and stage of ICT usage with a higher stage showing higher revenue
There was however no significant relationship between revenue and ICT usageage There was also no significant relationship between revenue and sector with the only exception being the Import amp Export ndash Consumer durable goods
119 Predictors differentiating ICT adopters from non-adopters
We tried to ascertain the influential predictors of ICT adoption at various stages that is PC Internet and Website
We used revenue size and age as predictors of PC adoption We found that these three independent variables used in model did not have the predicting power to discriminate between PC adoptersnon adopters However when we repeated the above analysis by including sector as an additional predictor we found a significant model where PC adoption is inversely related to revenue and size (smaller firms are more likely to adopt)
121
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Further PC adoption is more likely among firms less than 3 years and those over 7 years old than those 3-7 years old
We repeated the analysis for Internet adoption but we also included the level of PC usage as an additional predictor We found a significant model where Internet adoption is directly related to PC Usage
We repeated the analysis for Website adoption but we also included the level of PC and Internet usage in addition to revenue size age and sector We found a significant model where Website adoption is directly related to PC and Internet Usage
122
Appendices
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 1 SMEs Stages of Growth
The evolution of SMEs follows an S-curve growth model consisting of four phases65 66
Extensive ICT Use
G r o w t h
M a t u r I t y
Stage I Conception amp Development
Stage III Growth
Stage IV Stability
Developing ICT use
Maturing ICT Use
No or little ICT Use
Stage II Commercialisation
65 Churchill NC and VL Lewis (1983) The Five Stages of Small Business Growth Harvard Business Review May-June 66 Kazanjian R (1988) Relation of dominant problems to stages of growth in technology-based new ventures Academy of Management Journal 31 pp257-279
123
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Figure 1 SME Stages of Growth
SMEs within the same industry need to develop different ICT capabilities at different stage of their growth67 In conception and development stage the firm is hungry for financial support market recognition and necessary resources At this stage SMEs want to develop their capabilities fast and at a low cost In commercialisation stage the firm needs to commercialise its new products or services The challenge in this stage is the coordination of various activities to make a quick response to market changes Therefore ICT capabilities require a higher level of resource commitment in terms of finances training and time to implement and master In growth stage SMEs look to increase market share through sales and marketing thus needing to develop ICT capabilities not only to market their products but also to manage relationships with the increasing number of customers In stability stage SMEs reach a level of maturity in terms of sales revenues and try to secure their profitable positions while looking for the next sources of revenues At this stage they need ICT capabilities to improve efficiency back-office support and collaboration
67 Lester Donald L and TT Tran (2008) Information Technology Capabilities Suggestions for SME Growth Journal of Behavioural and Applied Management pp72-88
124
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 2 Calculation of ICT Usage
The idea was to source the information from the census data available in ASIT and assign points to various factors that could determine the level of use of ICT by a firm These would then be summed up and we could get an overall picture of where different firms are on the scale
1 Localised Exploitation
2 Internal Integration
3 Web Presence
4 Transaction
5 External Integration
6 Transformation
Low
High
B u s i n e s s
T r a n s f o r m a t i Low Higho Range of Potential Benefits n
For our purpose of ICT Usage we have combined the above as 3 stages
Stage 1 Localised Exploitation (PCs) amp Internal Integration Stage 2 Web presence (Internet Connection) amp Online Transaction Stage 3 External Integration (Electronic value chain) amp Transformation
In the next table we would identify and give marks to the relevant questions from ASIT to test the ICT Usage in terms of the stages defined above
125
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Stage Applications
Stage 1 Localised Exploitation amp Internal Integration
bull PCLaptop bull One or more applications bull Applications allow technical connectivity and
application interdependence (eg intranet ERP)
Stage 2 Web presence (Internet Connection) amp Online Transaction
bull Webpage bull Email bull EDI bull E-marketplaces bull E-procurement
Stage 3 External Integration (Electronic value chain) amp Transformation
bull Full supply chainvalue chain integration bull E-enterprise with a focus on knowledge management bull Applications to allow the use of knowledge with a
focus on customer needs as a strategic resource to create business value
The details of the questions selected for analysis have been shown in Appendix 3
126
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 3 Analysis of the questions selected for calculation of ICT Usage from the ASIT Report
Each question from the ASIT survey was analysed to ascertain if it should be included in the calculation If to be included it was then decided which stage of ICT Usage the firm belonged to
Index Required (Y) Not If required in Form of required (N) in the Stage of ICT
Question ASIT Answer analysis If not required why Usage Does the firm use PCs B1 YesNo N Covered in B6
Not relevant to the ICT Does it plan to use PCs If not why B2 YesNo N Usage calculation
Number of PCs in use by different categories - Number of Not relevant to the ICT DesktopLaptop etc B3 sets N Usage calculation
Whether the firms PCs have installedaccess to the following application software B4 i Word processing YesNo Y Stage 1 ii Spreadsheet YesNo Y Stage 1 iii Database Management YesNo Y Stage 1 iv Communication YesNo Y Stage 1 v Presentation YesNo Y Stage 1 vi Computer security YesNo Y Stage 1
127
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
vii viii ix x xi xii xiii xiv
Multi-media Other utility CADCAM End-user software for DEDS Internet browser Banking amp FinanceAccounting PurchaseSales amp Order processing HRMTraining
YesNo YesNo YesNo YesNo YesNo YesNo YesNo YesNo
Y Y Y Y Y Y Y Y
Stage 1 Stage 1 Stage 1 Stage 2 Stage 2 Stage 1 Stage 1 Stage 1
xv Others YesNo Y Stage 1
If the firms PCs have access to the following tailor made computer systems
i CADCAM ii Banking amp FinanceAccounting iii PurchasingSale and order processing iv Human Resource ManagementTraining
B5
YesNo YesNo YesNo YesNo
N Y Y Y
Not commonsectors to
all
Stage 1 Stage 1 Stage 1
The proportion of the firmrsquos employees using PCs at work B6 Y Stage 1
Does the firm have internet Does it plan to use internet If not why
C1 C2
YesNo YesNo
N N
Covered in C5
What is the internet usually used for C3
128
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
i Email Y Stage 2 ii On-line sourcing of general information Y Stage 2 iii On-line purchaseordering Y Stage 2 iv Receipt Y Stage 2 v Sales Y Stage 2 vi Delivery Y Stage 2 vii Payments Y Stage 2 viii Government information Y Stage 2 ix Enquiry to suppliers Y Stage 2 x Provision of informationfeedback Y Stage 2 xi Software downloads Y Stage 2 xii E-banking services Y Stage 2 xiii Financial transaction Y Stage 2 xiv Internal use applications such as ERP Y Stage 2 xv Video conference Y Stage 2 xvi Others Y Stage 2
Not relevant to the ICT How is it connected to the internet Dial-up etc C4 N Usage calculation
The proportion of employees using the Internet at work C5 Y Stage 2
Indicate the effects of using the internet on the business operations and degree of impact such as Not relevant to the ICT increased revenue etchellip C6 N Usage calculation
129
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Not relevant to the ICT Does it have a BCP C7 N Usage calculation
What happens if there is an IT disaster C8 N Not relevant to the ICT Usage calculation
What would motivate the firm to adopt IT more C9 N Not relevant to the ICT Usage calculation
Has your firm LANIntranetExtranet C10 N Not relevant to the ICT Usage calculation
Website ndash YesNo D1 YesNo Y Stage 2
Does it plan to set up a website D2 YesNo N Not relevant to the ICT Usage calculation
Own Web server ndash YesNo D3 YesNo Y Stage 2
Websitewebpage integrated with the firmrsquos database D4 YesNo Y Stage 3
Websitewebpage integrated with the business partnersrsquo database D5 YesNo Y Stage 3
Type of transactions offered by the D6
130
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
websitewebpage i Providing information on the firm products
and services ii Ordering of the firmrsquos products iii Delivery of products iv After sales services v Collection of feedback vi Handling of business enquiry vii Others
YesNo YesNo YesNo YesNo YesNo YesNo YesNo
Y Y Y Y Y Y Y
Stage 2 Stage 2 Stage 2 Stage 2 Stage 2 Stage 2 Stage 2
Have you used any portal sites for your industry in the past 12 months D7 YesNo N
Not relevant to the ICT Usage calculation
Has your firm purchased goods through electronic means E1 YesNo Y Stage 2
Reasons for ordering convenience etc
goods electronically E2 N
Not relevant to the ICT Usage calculation
Types of goods ordered electronically - inventory travel etc E3 N
Not relevant to the ICT Usage calculation
Percentage of value of goods services or information purchased through electronic means to the total value of purchase by the firm i lt1
E4(a) N Not universal sectors
to all
131
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ii 1-5 iii 6-10 iv 11-15 v gt15
Percentage purchased electronically through Not relevant to the ICT different means E4 (b) N Usage calculation i Internet via PCs ii Internet via mobile iii Designated private network iv Interactive Voice Response System through
telecom v Other Interactive Response System (such as
SMS) through mobile telecom vi Others
Percentage of payment made through Internet to total payments E5 Y Stage 2 i 0 ii lt1 iii 1-20 iv 21-40 v 41-60 vi 61-80 vii 81-100
132
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Firm obtained government goodsservices through electronic means E6 YesNo Y Stage 2
Type of government goods received i Receipt of e-products ii Receiptbrowsing of other information iii Submission of trade related documents iv Submission of other forms or documents v Submission of enquiry vi E-payment services vii Others
E7 N Not relevant to the ICT Usage calculation
Firm obtained goodsservices other than government through electronic means E8 YesNo Y Stage 2
Type of goodsservices other than government through electronic means received i Electronic financial services ii Receipt of e-products iii Receiptbrowsing of other information iv Receipt of on-line customer services v Others
E9 N Not relevant to the ICT Usage calculation
Has your firmmeans
sold goods through electronic
E10
YesNo Y Stage 2
133
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Reasons for ordering convenience rice etc
goods electronically E11 N
Not relevant to the ICT Usage calculation
Value of goods services or information sold through electronic means E12(a) N Covered in E12(d)
Percentage of value of goods services or information sold through electronic means by type of electronic means i Internet via WAP version of website ii Internet via website other than WAP iii Designated private network iv Interactive Voice Response System through
telecom
E12b N Not relevant to the ICT Usage calculation
v
vi
Other Interactive Response System (such as SMS) through mobile telecom Others
Breakdown by customer groups E12 c N Not relevant to the ICT Usage calculation
Percentage of payment received through Internet to total receipts of goods sold through the internet i 0 ii lt1 iii 1-5
E12(d) Y Stage 2
134
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
iv v vi
6-10 11-15 gt15
Type of payments accepted through electronic means i Electronic banking services ii Credit cards iii Third-party payment services iv Debit from pre-paid accounts with the
company v Non-electronic payment methods vi Others
E12e Y Stage 2
Total business receipts of the firm E13 N Not relevant to the ICT Usage calculation
Has the firm delivered goodsservices through electronic means E14 YesNo Y Stage 2
Reasons for delivering through electronic means - convenience etc E15 N
Not relevant to the ICT Usage calculation
Type of goods delivered through electronic means E16 N Not relevant to the ICT Usage calculation
Media for delivering your goods services or E17 N Not relevant to the ICT
135
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
information sold through electronic means isare Usage calculation i ii iii iv
Internet via WAP version of website Internet via website other than WAP Designated private network Interactive Voice Response System through
telecom v
vi
Other Interactive Response System (such as SMS) through mobile telecom Others
Does the firm have a budget for IT for the current year F1 YesNo N
Not relevant to the ICT Usage calculation
Has the budget for IT increasedchanged over the previous year i Increased ii Decreased iii Same iv Uncertain v Not applicable
F2 N Not relevant to the ICT Usage calculation
Does the firm have a budget for IT for the next year F3 YesNo N
Not relevant to the ICT Usage calculation
Has the budget for the next year increasedchanged over the previous year F4 N
Not relevant to the ICT Usage calculation
136
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
i Increased ii Decreased iii Same
iv Uncertain v Not applicable
Has it suffered security incidents G1 N Not relevant to the ICT Usage calculation
Type of incidents suffered G2 N Not relevant to the ICT Usage calculation
What actions does it take G3 N Not relevant to the ICT Usage calculation
What security technology has it adopted to protect itself G4 N
Not relevant to the ICT Usage calculation
Has it implemented any security measure G5 N Not relevant to the ICT Usage calculation
What are the obstacles to addressing security incidents G6 N
Not relevant to the ICT Usage calculation
How is authentication provided to clients G7 N Not relevant to the ICT Usage calculation
137
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Does the firm have a digital certificate G8 YesNo Y Stage 2
Has it used the digital certificate in the past 12 months G9 N
Not relevant to the ICT Usage calculation
Reasons for not wanting a digital certificate G10 N Not relevant to the ICT Usage calculation
Does the firm use any of the following wireless and mobile devices i Mobile phone connected to a wireless data
communication network ii PDA connected to a wireless data
communication network iii Laptopnotebook connected to a wireless data
communication network iv Desktop computer connected to a wireless data
communication network v WLAN access point vi Radio Frequency Identification device vii Contactless smart card reader viii Others
H1 Y Stage 2
Does the firm use any of the following wireless and mobile transmission technology i GPRS ii EDGE
H2 Y Stage 2
138
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
iii 3G iv WAP v WLAN vi Bluetooth vii RFID viii Mobile security solution ix Others
Does the firm use any of the following wireless and mobile services H3 Y Stage 2 i SMS ii EMS iii MMS iv LBS v GPS vi Wireless e-mail vii Wireless web-surfing viii Infotainment service ix Video call x Others
Does the firm use any of the following wireless and mobile applications H4 Y Stage 2 i GIS ii SMSMMS
139
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
iii Office automation iv WAP v Job Management vi Fleet management vii Outdoor site survey and documentation viii Inventory control ix Mobile financial services x Mobile POS xi Transaction with business partners
(including Government) xii Video streaming xiii Accesssecurity control xiv Others
What are the obstacles of using these Not relevant to the ICT technologies H5 N Usage calculation
140
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 4 Weights assigned to the questions selected for each stage of ICT Usage calculation from the ASIT Report
Index in Form of Questions of Stage 1 ASIT Answer Points Weight Max Min
Whether the firms PCs have installedaccess to the following application software (Note not x and xi) B4 i Word processing YesNo Y=1 N=0 1 1 0 ii Spreadsheet YesNo Y=1 N=0 1 1 0 iii Database Management YesNo Y=1 N=0 1 1 0 iv Communication YesNo Y=1 N=0 1 1 0 v Presentation YesNo Y=1 N=0 1 1 0 vi Computer security YesNo Y=1 N=0 1 1 0 vii Multi-media YesNo Y=1 N=0 1 1 0 viii Other utility YesNo Y=1 N=0 1 1 0 ix CADCAM YesNo Y=1 N=0 1 1 0 xii Banking amp FinanceAccounting YesNo Y=1 N=0 1 1 0 xiii PurchaseSales amp Order processing YesNo Y=1 N=0 1 1 0 xiv HRMTraining YesNo Y=1 N=0 1 1 0 xv Others YesNo Y=1 N=0 1 1 0
If the firms PCs have access to the following tailor made computer systems B5 i Banking amp FinanceAccounting YesNo Y=1 N=0 1 1 0 ii PurchasingSale and order processing YesNo Y=1 N=0 1 1 0 iii Human Resource ManagementTraining YesNo Y=1 N=0 1 1 0
141
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Put the exact figure The proportion of the firmrsquos employees using PCs at work B6 provided in decimals 005 5 0
Questions of Stage 2 Index in ASIT
Form of Answer Points
Total
Weight
21
Max
0
Min
Whether the firms PCs have installedaccess to the following application software i End-user software for DEDS ii Internet browser
B4 YesNo YesNo
Y=1 N=0 Y=1 N=0
1 1
1 1
0 0
What is the internet usually used for i Email ii On-line sourcing of general information iii On-line purchaseordering iv Receipt v Sales
C3 If not used give 0 If lt4 uses give 1
If 4 to 8 uses give 2 If 8 to 16 uses give 3
1 1 1 1 1
1 1 1 1 1
0
vi viiviii
Delivery Payments Government information
1 1 1
1 1 1
ix x xi
Enquiry to suppliers Provision of informationfeedback Software downloads
1 1 1
1 1 1
xii E-banking services 1 1
142
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
xiii Financial transaction xiv Internal use applications such as ERP xv Video conference xvi Others
The proportion of employees using the Internet at work C5 Put the exact figure
provided in decimals
1 1 1 1
005
1 1 1 1
5 0
Website ndash YesNo D1 YesNo Y=1 N=0 1 0
Own Web server ndash YesNo D3 YesNo Y=1 N=0 1 0
Type of transactions offered by the websitewebpage i Providing information on the firm products and services ii Ordering of the firmrsquos products iii Delivery of products iv After sales services v Collection of feedback vi Handling of business enquiry vii Others
D6 YesNo YesNo YesNo YesNo YesNo YesNo YesNo
For each usage give one point
Y Y Y Y Y Y Y
1 1 1 1 1 1 1
7
1 1 1 1 1 1 1
0
Has your firm purchased goods through electronic means E1 YesNo Y=1 N=0 1 0
Percentage of payment made through Internet to total payments i 0
E5 0 3 0
143
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ii iiiiv v vi vii
lt1 1-20 21-40 41-60 61-80 81-100
1 1 2 2 3 3
Firm obtained government goodsservices through electronic means Firm obtained goodsservices other than government through electronic means
E6 E8
YesNo YesNo
Y=1 N=0 Y=1 N=0
1 1
1 1
0 0
Has your firm sold goods through electronic means E10 YesNo Y=1 N=0 1 1 0
Percentage of payment received through Internet to total receipts of goods sold through the internet i 0 ii
lt1 iii 1-5 iv 6-10 v 11-15 vi gt15
E12(d) 0 1 1 2 2 3
3 0
Type of payments accepted through electronic means i Electronic banking services ii Credit cards iii Third-party payment services
E12e If not used = 0 If using upto 2 = 1 If using 2 to 4 = 2 If using 4 to 6 = 3
3 0
144
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
iv v vi
Debit from pre-paid accounts with the company Non-electronic payment methods Others
Has the firm delivered goodsservices through electronic means E14 YesNo Y=1 N=0 1 0
Does the firm have a digital certificate G8 YesNo Y=1 N=0 1 0
Does the firm use any of the following wireless and mobile devices i Mobile phone connected to a wireless data communication network ii PDA connected to a wireless data communication network iii Laptopnotebook connected to a wireless data communication network iv Desktop computer connected to a wireless data communication network v WLAN access point vi Radio Frequency Identification device vii Contactless smart card reader viii Others
H1 If any are used give 1
point else 0 1 0
Does the firm use any of the following wireless and mobile transmission technology i GPRS ii
EDGE iii 3G iv WAP
H2 If any are used give 1
point else 0 1 0
145
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
v WLAN vi Bluetooth vii RFID viii Mobile security solution ix Others
If any are used give 1 Does the firm use any of the following wireless and mobile services H3 point else 0 1 0 i SMS ii EMS iii MMS iv LBS v GPS vi Wireless e-mail vii Wireless web-surfing viii Infotainment service ix Video call x Others
If any are used give 1 Does the firm use any of the following wireless and mobile applications H4 point else 0 1 0 i GIS ii SMSMMS iii Office automation iv WAP
146
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
v vi vii viii ix x xi xii xiii xiv
Job Management Fleet management Outdoor site survey and documentation
Inventory control Mobile financial services Mobile POS Transaction with business partners (including Government) Video streaming
Accesssecurity control Others
Total 53 0
Questions of Stage 3 Websitewebpage integrated with the firmrsquos database
Index in ASIT D4
Form of AnswerYesNo
Points Y=1 N=0
Weight 5
Max 5
Min 0
Websitewebpage integrated with the business partnersrsquo database D5 YesNo Y=1 N=0 5 5 0
Total 10 0
147
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 5 Details of the questions selected for calculation of ICT Usage from the ASIT Report based on the Codes available at CampSD
(The items which are appearing in grey are those which were excluded from analysis)
Form Index in of
Part 1 ASIT Answer Points Weight Max Min Whether the firms PCs have installedaccess to the following application software (Note not x and xi) B4
i Word processing YesNo Y=1 N=0 1 1 0
ii Spreadsheet YesNo Y=1 N=0 1 1 0
iii Database Management YesNo Y=1 N=0 1 1 0
iv Communication YesNo Y=1 N=0 1 1 0
v Presentation YesNo Y=1 N=0 1 1 0
vi Computer security YesNo Y=1 N=0 1 1 0
vii Multi-media YesNo Y=1 N=0 1 1 0
viii Other utility YesNo Y=1 N=0 1 1 0
ix CADCAM YesNo Y=1 N=0 1 1 0
x Banking amp FinanceAccounting YesNo Y=1 N=0 1 1 0
xi PurchaseSales amp Order processing YesNo Y=1 N=0 1 1 0
xii HRMTraining YesNo Y=1 N=0 1 1 0
xiii Others YesNo Y=1 N=0 1 1 0
If the firms PCs have access to the following tailor made computer systems B5
i Banking amp FinanceAccounting YesNo Y=1 N=0 1 1 0
ii PurchasingSale and order processing YesNo Y=1 N=0 1 1 0
iii Human Resource ManagementTraining YesNo Y=1 N=0 1 1 0
148
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Use figure given as The proportion of the firmrsquos employees using PCs at work B6 percentage 005 5 0
ICTU1 = 21 0
Part 2 Index in
ASIT
Form of
Answer Points Weight Max Min
Whether the firms PCs have installedaccess to the following application software
i End-user software for DEDS
ii Internet browser
B4
YesNo
YesNo
Y=1 N=0
Y=1 N=0
1
1
1
1
0
0
What is the internet usually used for
i Email
ii On-line sourcing of general information
iii On-line purchaseordering
iv Receipt
v Sales
vi Delivery
vii Payments
viii Government information
ix Enquiry to suppliers
x Provision of informationfeedback
xi Software downloads
xii E-banking services
xiii Financial transaction
xiv Internal use applications such as ERP
xv Video conference
C3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
149
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
xvi Others 16 1 1 0
The proportion of employees using the Internet at work C5 Use figure given as
percentage 005 5 0
Website ndash YesNo D1 YesNo Y=1 N=0 1 0
Own Web server ndash YesNo D3 YesNo Y=1 N=0 1 0
Type of transactions offered by the websitewebpage
i Providing information on the firm products and services
ii Ordering of the firmrsquos products
iii Delivery of products
iv After sales services
v Collection of feedback
vi Handling of business enquiry
vii Others
D6
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
For each usage give one point
Y=1 N=0
Y=1 N=0
Y=1 N=0
Y=1 N=0
Y=1 N=0
Y=1 N=0
Y=1 N=0
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0
0
0
0
0
0
0
Has your firm purchased goods through electronic means E1 YesNo Y=1 N=0 1 1 0
Percentage of payment made through Internet to total payments
i 0
ii lt1
iii 1-20
iv 21-40
v 41-60
vi 61-80
vii 81-100
E5
1
2
3
4
5
6
7
0
1
1
2
2
3
3
3 0
150
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Firm obtained government goodsservices through electronic means E6 YesNo Y=1 N=0 1 1 0
Firm obtained goodsservices other than government through electronic means E8 YesNo Y=1 N=0 1 1 0
Has your firm sold goods through electronic means E10 YesNo Y=1 N=0 1 1 0
Percentage of payment received through Internet to total receipts of goods sold through the internet
i 0 ii lt1
iii 1-5
iv 6-10
v 11-15
vi gt15
E12(d)
1
2
3
4
5
6
0
1
1
2
2
3
3 0
Type of payments accepted through electronic means
i Electronic banking services
ii Credit cards
iii Third-party payment services
iv Debit from pre-paid accounts with the company
v Non-electronic payment methods
vi Others
E12e 1
2
3
4
5
6
If not used = 0 If using 1 or 2
assign 1 If using 3 or 4
assign 2 If using 5 or 6
assign 3
3 0
Has the firm delivered goodsservices through electronic means E14 YesNo Y=1 N=0 1 0
Does the firm have a digital certificate G8 YesNo Y=1 N=0 1 0
Does the firm use any of the following wireless and mobile devices H1 If any are used give
1 point else 0 1 0
151
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
i Mobile phone connected to a wireless data communication network YesNo
ii PDA connected to a wireless data communication network YesNo
iii Laptopnotebook connected to a wireless data communication network YesNo
iv Desktop computer connected to a wireless data communication network YesNo
v WLAN access point YesNo
vi Radio Frequency Identification device YesNo
vii Contactless smart card reader YesNo
viii Others YesNo
Does the firm use any of the following wireless and mobile transmission technology H2
i GPRS YesNo
ii EDGE YesNo
iii 3G YesNo
iv WAP YesNo
v WLAN YesNo
vi Bluetooth YesNo
vii RFID YesNo
viii Mobile security solution YesNo
ix Others YesNo
Does the firm use any of the following wireless and mobile services H3
i SMS YesNo
ii EMS YesNo
iii MMS YesNo
iv LBS YesNo
v GPS YesNo
vi Wireless e-mail YesNo
vii Wireless web-surfing YesNo
If any are used give 1 point else 0 1 0
If any are used give 1 point else 0 1 0
152
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
viii
ix
x
Infotainment service
Video call
Others
YesNo
YesNo
YesNo
Does the firm use any of the following wireless and mobile applications
i GIS
ii SMSMMS
iii Office automation
iv WAP
v Job Management
vi Fleet management
vii Outdoor site survey and documentation
viii Inventory control
ix Mobile financial services
x Mobile POS
xi Transaction with business partners (including Government)
xii Video streaming
xiii Accesssecurity control
xiv Others
H4
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
YesNo
If any are used give 1 point else 0 1 0
ICTU2 = 28 0
Part 3
Websitewebpage integrated with the firmrsquos database
Index in ASIT
D4
Form of
Answer
YesNo
Points
Y=1 N=0
Weight
5
Max
5
Min
0
Websitewebpage integrated with the business partnersrsquo database D5 YesNo Y=1 N=0 5 5 0
153
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
ICTU3 = 10 0
ICTU = ICTU1 +ICTU2 + ICTU3
154
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Appendix 6 Number of sampled establishments [1] in 2008 ASIT with PC and Internet connection
Internal reference only
Personal Computer and Internet Penetration Usage in Business Sectors
Industry Sector All establishments of SMEs [1] establishments
of SMEs [1] having used personal
computer of SMEs [1] having Internet connection
Manufacturing 16 539 988 522 510 Electricity and gas 20 800 1000 450 Construction 20 355 984 548 464 Wholesale and retail trades 60 073 988 343 290 Import and export trades 87 896 991 912 899
Consumer non-durable goods [2] 47 633 992 914 911 Consumer durable goods [3] 12 488 986 876 869 Miscellaneous goods [4] 27 775 994 924 891
Restaurants hotels and boarding houses 12 748 934 308 203 Transport and storage 31 777 983 309 296 Communications 859 914 770 752 Financing and insurance 8 711 951 699 616 Real estate 5 246 940 646 498 Business Services 28 946 976 908 896 Community social and personal services 34 730 959 602 505 Overall 307 900 980 623 581
155
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Source 2008 Annual Survey of Information Technology Usage and Penetration in the Business Sector (ASIT)
[1] Establishments are categorised into small and medium enterprises (SMEs) according to their number of persons engaged as follows (i) with less than 100 persons for manufacturing sector (ii) with less than 50 persons for non-manufacturing sector
[2] Consumer non-durable goods include foodstuffs alcoholic drinks and tobacco clothing footwear and allied products toys watches and clocks and other consumer non-durable goods
[3] Consumer durable goods include telecommunications equipment electrical goods computers computer peripherals and software packages and other consumer durable goods
[4] Miscellaneous goods include machinery equipment and parts transport equipment raw materials and semi-manufactures and fuels
156
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 7 Analysis of CampSD data ndash ICT Usage across Industries
Anova68 Single Factor
SUMMARY
Groups Count Sum Average Variance Sector 1 235 24229 1031021277 106561132 Sector 2 167 173365 1038113772 9453241469 Sector 3 467 5119 109614561 9692695729 Sector 4 175 206535 11802 9390268966 Sector 5 142 18078 1273098592 7329777744 Sector 6 73 89405 1224726027 776249239 Sector 7 21 1585 7547619048 1839386905 Sector 8 217 24887 1146866359 1099308756 Sector 9 62 7754 1250645161 102406954 Sector 10 65 8432 1297230769 7473752404 Sector 11 14 16565 1183214286 1863100275 Sector 12 335 43343 1293820896 5423415944
ANOVA Source of Variation SS df MS F P-value F crit Between Groups 216832708 11 1971206437 2183316525 173123E-42 1793521277
68 ANOVA stands for ldquoAnalysis Of VAriance between groupsrdquo ANOVA analyses the variation present in an experiment by giving a statistical test of whether the means of several groups are all equal
157
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Within Groups 1770488052 1961 9028495933
Total 1987320761 1972
158
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Anova Single Factor
SUMMARY
Groups Count Sum Average Variance Sector 1 235 201005 8553404255 2138580033 Sector 2 167 128275 7681137725 1843041014 Sector 3 467 423385 9066059957 2508161921 Sector 4 175 18939 1082228571 1671619589 Sector 5 142 18513 1303732394 2029558286 Sector 6 73 78505 1075410959 1931019121 Sector 7 21 88 419047619 1775890476 Sector 8 217 214685 9893317972 2071522135 Sector 9 62 7254 117 274542623 Sector 10 65 71325 1097307692 1686141226 Sector 11 14 11445 8175 2655451923 Sector 12 335 435045 1298641791 2017100509
ANOVA Source of Variation Between Groups Within Groups
SS 7143541864 4157821969
df 11 1961
MS 6494128968 2120255976
F 3062898556
P-value 311374E-60
F crit 1793521277
Total 4872176155 1972
159
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Anova Single Factor
SUMMARY
Groups Count Sum Average Variance Sector 1 222 201005 9054279279 1808820559 Sector 2 151 128275 8495033113 134361585 Sector 3 424 423385 9985495283 1842856571 Sector 4 173 18939 1094739884 1553294378 Sector 5 140 18513 1322357143 1810703032 Sector 6 69 78505 1137753623 132487159 Sector 7 14 88 6285714286 1313824176 Sector 8 209 214685 1027200957 1760333537 Sector 9 60 7254 1209 2358989831 Sector 10 64 71325 1114453125 1518794581 Sector 11 13 11445 8803846154 2276977564 Sector 12 330 435045 1318318182 1787569653
ANOVA Source of Variation Between Groups Within Groups
SS 4986186738 3223293368
df 11 1857
MS 4532897035 1735753025
F 261148733
P-value 533615E-51
F crit 1793794387
Total 3721912042 1868
160
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Anova Single Factor
SUMMARY
Groups Count Sum Average Variance Sector 1 235 85 0361702128 2539552646 Sector 2 167 5 002994012 0149700599 Sector 3 467 200 0428265525 2605894625 Sector 4 175 120 0685714286 4124794745 Sector 5 142 105 073943662 459119968 Sector 6 73 20 0273972603 1312785388 Sector 7 21 0 0 0 Sector 8 217 165 0760368664 5090459123 Sector 9 62 85 1370967742 8335536753 Sector 10 65 65 1 5625 Sector 11 14 20 1428571429 1318681319 Sector 12 335 485 1447761194 9499508446
ANOVA Source of Variation Between Groups Within Groups
SS 3891069269 8605317807
df 11 1961
MS 3537335699 4388229376
F 8060963537
P-value 66661E-14
F crit 1793521277
Total 8994424734 1972
161
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Anova Single Factor
SUMMARY
Groups Count Sum Average Variance Sector 1 13 85 6538461538 5769230769 Sector 3 34 200 5882352941 3743315508 Sector 4 20 120 6 4210526316 Sector 5 17 105 6176470588 4779411765 Sector 8 25 165 66 5666666667 Sector 9 13 85 6538461538 5769230769 Sector 10 11 65 5909090909 4090909091 Sector 12 68 485 7132352941 6206101844
ANOVA Source of Variation SS df MS F P-value F crit Between Groups 5100960183 7 7287085975 1390858555 0211121109 2057279878 Within Groups 1011179453 193 5239271777
Total 1062189055 200
162
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Anova Single Factor
SUMMARY
Groups Count Sum Average Variance Sector 1 235 451795 1922531915 5877443099 Sector 2 167 30214 1809221557 4462415591 Sector 3 467 955285 2045578158 6551166178 Sector 4 175 407925 2331 5289712644 Sector 5 142 37641 2650774648 5645976226 Sector 6 73 16991 2327534247 3998841134 Sector 7 21 2465 1173809524 6480872619 Sector 8 217 480055 2212235023 6802812084 Sector 9 62 15858 2557741935 9129144897 Sector 10 65 162145 2494538462 5125872837 Sector 11 14 3001 2143571429 1389978571 Sector 12 335 916975 2737238806 6020180266
ANOVA Source of Variation Between Groups Within Groups
SS 2156286631 1184873131
df 11 1961
MS 1960260573 6042188326
F 3244289101
P-value 806607E-64
F crit 1793521277
Total 1400501794 1972
163
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 8 Value Added of Small and Medium Enterprises (SMEs) by select industry sector 2007
Industry VA of SMEs
[1] (HK$ million)
VA of all establishments (HK$ million)
Manufacturing 146509 438127
Building construction and real estate NA 1280826 Wholesale retail and import and export trades restaurants and hotels 2781226 4482108
Wholesale 101923 133002 Retail 134890 451844 Import and export 2354056 3396335
Restaurants 183952 329224 Hotels and boarding houses
6405 171703
Transport and related services 342724 1128399
Storage communication financing insurance and business services (exclude banking) 719849 2205227
Source Programme of Annual Economic Surveys (2007)
[1] Establishments are categorised into small and medium enterprises (SMEs) according to their number of persons engaged as follows (i) with less than 100 persons for manufacturing sector (ii) with less than 50 persons for non-manufacturing sector
164
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 9 Mail survey in English
1 GENERAL INFORMATION
Please mark the business sector your firm belongs to OManufacturing ORestaurants Hotels and Boarding Houses OConstruction OTransport and Storage OWholesaleRetail OCommunications OImport amp Export-Consumer non-durable goodsOFinancing and Insurance OImport amp Export ndash Consumer durable goods OReal EstateOImport amp Export ndash Miscellaneous goods OBusiness Services
Number of persons engaged in your firm (including overseas operations)OLess than 10 people O10-49 people O50-100 people O Over 100 people
Number of years your firm has been in businessOLess than 3 years O3-7 years OMore than 7 years
Total revenuesales in the last fiscal year
165
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
2 ICT ndash PERSONAL COMPUTERS
Does your firm use personal computers (PCs)
OYes (Please skip the next Section and move to Section 4)
ONo
166
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
3 NOT USING PCs
How important are the following reasons for your firm not to use PCs Not Little Important Very Highly
important important important important It is costly O O O O O
It is not really needed O O O O O
There is difficulty finding trained personnel to use PCs O O O O O
There is no one to train the personnel O O O O O
It is difficult and expensive to maintain O O O O O
There may be security issues O O O O O
Other (please specify)
Do you think that using PCs would help improve the operations of your firm If so how
What would really motivate or push you to use PCs
How useful would the following types of Government support be to your firm for installing and using computers
Not Little Not sure Very useful Highly useful useful useful
Holding training workshopsseminars O O O O O
Providing tax incentives O O O O O
Providing more information on the costs and benefits of using PCs O O O O O
Providing PC adoption consulting services O O O O O
Subsidising training in using PCs O O O O O
Other (please specify)
167
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Please move to Section 11
168
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
4 USING PCs
Please mark the extent to which your firm uses software for the following tasks Not at Very Sometimes Often Very NA
all little often Word processing O O O O O O
Spreadsheet O O O O O O
Database Management O O O O O O
Communication O O O O O O
Presentation O O O O O O
Computer security O O O O O O
Multi-media O O O O O O
FinanceAccounting O O O O O O
PurchaseSales amp Order processing O O O O O O
HRMTraining O O O O O O
Other (please specify)
How much value do you think PCs have added to the following aspects of your business No Very little Some Significant Great value
value value value value added added added added added
Improving operational efficiencyreducing costs O O O O O
Improving customer services O O O O O
Increasing sales O O O O O
Exploring new opportunities for growing business O O O O O
Providing competitive advantage O O O O O
Other (please specify)
Please mark the extent to which your firm uses the following tailor-made computer systems
Not at all Very little Sometimes Often Very often FinanceAccounting O O O O O
PurchasingSale and Order Processing O O O O O
Human Resource ManagementTraining O O O O O
Other (please specify)
169
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
5 ICT ndash INTERNET USAGE
Does your firm use the Internet
OYes (Please skip the next Section and move to Section 7)
ONo
170
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
6 NOT USING THE INTERNET
How important are the following reasons for your firm not to use the Internet Not Little Important Very Highly
important important important importan t
Employees will waste their time using it O O O O O
There are concerns about Internet security O O O O O
Maintenance is difficult and expensive O O O O O
Business partners and customers are not using the O O O O OInternetCompetitors are not using the Internet O O O O O
It is costly O O O O O
It is not really needed O O O O O
There is difficulty finding trained personnel to use it O O O O O
There is no one to train the personnel O O O O O
Other (please specify)
Do you think that using the Internet would help improve your business If so how
What would really motivate or push you to use the Internet
How useful would the following types of Government support be to your firm for using the Internet Not Little Not Very Highly
useful useful sure useful useful Investing in ICT infrastructure O O O O O
Building the right legal and regulatory framework to ensure security trust privacy and consumer O O O O OprotectionProviding tax incentives for using the Internet O O O O O
Providing more information on the costs and benefits of using the Internet O O O O O
Providing Internet adoption consulting services O O O O O
171
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Subsidising Internet training O O O O O
Holding training workshopsseminars O O O O O
Other (please specify)
Please move to Section 11
172
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
7 USING THE INTERNET
Please mark the extent that your firm uses the Internet for the following purposes Not Very Sometimes Often Very NA
at all little often Email O O O O O O
Online sourcing of general information O O O O O O
Online ordering from suppliers O O O O O O
Online payments to suppliers O O O O O O
Online sales to customers O O O O O O
Online receipt of payments from customers O O O O O O
Government information O O O O O O
Provision of informationfeedback to customers O O O O O O
Software downloads O O O O O O
E-banking services O O O O O O
Video conferencing O O O O O O
Other (please specify)
How much value do you think the Internet has added to the following aspects of your business No Very little Some Significant Great
value value value value added value added added added added
Penetration into new markets O O O O O
Prompt response to market changes O O O O O
Exploitation of network opportunities O O O O O
Improving operational efficiencyreducing costs O O O O O
Improving customer services through integrated processes O O O O O
Increasing sales O O O O O
Creation of new productsservices O O O O O
Providing competitive advantages O O O O O
Other (please specify)
Does your firm have a digital certificateOYes ONo
173
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Do you think that using the Internet more would help improve the business of your firm If so how
174
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8 ICT ndash WEBSITE USAGE
Does your firm have a Website
OYes (Please skip the next Section and move to Section 10)
ONo
175
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9 NOT USING A WEBSITE
How important are the following reasons for your firm not having a Website Not Little Important Very Highly
important important important important Business partners do not have a Website O O O O O
Online transaction is not common in the industry O O O O O
Online marketing is not common in the industry O O O O O
There are concerns about Internet security O O O O O
Maintenance is difficult and expensive O O O O O
Business partners and customers are not using the O O O O OInternetCompetitors are not using the Internet O O O O O
It is costly O O O O O
It is not really needed O O O O O
There is difficulty finding trained personnel to use it O O O O O
There is no one to train the personnel O O O O O
Other (please specify)
Do you think that creating a Website would help improve your business If so how
What would really motivate or push you to create a Website
How useful would the following types of Government support be to your firm for creating a Website Not Little Not Very Highly
useful useful sure useful useful Holding training workshopsseminars O O O O O
Investing in ICT infrastructure O O O O O
Building the right legal and regulatory framework to ensure security trust privacy and consumer protection O O O O O
Providing tax incentives for ICT investments O O O O O
Providing more information on the costs and benefits of O O O O O
176
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using ICT Providing ICT adoption consulting services O O O O O
Subsidising ICT training O O O O O
Other (please specify)
Please move to Section 11
177
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
10 USING A WEBSITE
Please mark the extent that your firm uses its Website for the following purposes Not Very Sometimes Often Very NA
at all little often Providing information on the firmrsquos products and services O O O O O O
Handling of business enquiry O O O O O O
Receiving online orders O O O O O O
Receiving online payments O O O O O O
Access to government information O O O O O O
Delivery of products O O O O O O
After sales services O O O O O O
Collection of feedbacks O O O O O O
Online marketing O O O O O O
Knowledge management O O O O O O
Other (please specify)
How much value do you think your Website has added to the following aspects of your business No Very little Some Significant Great
value value value value value added added added added added
Availability of online transaction O O O O O
Strengthening the relationships with business partners O O O O O
Creation of new productsservices O O O O O
Improve productivity through service integration O O O O O
Creation of new business models O O O O O
Streamlining of the business promoting flexibility O O O O O
Penetration into new markets O O O O O
Prompt response to market changes O O O O O
Exploitation of network opportunities O O O O O
Improving operational efficiencyreducing costs O O O O O
Improving customer services through integrated processes O O O O O
Increasing sales O O O O O
Providing competitive advantage O O O O O
Other (please specify)
178
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Is your firmrsquos Websitewebpage integrated with the firmrsquos databaseOYes ONo
Is your firmrsquos Websitewebpage integrated with your business partnersrsquo database OYes ONo
179
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
11 OVERALL ICT USAGE
Overall to what extent do you feel that your firm currently uses ICTO Not at all O Very littleO SometimesO Often O Very often
Overall to what extent do you feel that using more ICT would increase the value added to your firm O No value addedO Very little value added O Some value addedO Significant value addedO Great value added
Thank you for answering this survey
180
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Appendix 10 Mail survey in Chinese 1 貴公司基本情况
貴公司所屬的行業是
O 製造業 O 飲食及酒店業
O 建造業 O 運輸倉庫業
O 批發業零售業 O 通訊業
O 進出口貿易業(非消費耐用品) O 金融保險業
O 進出口貿易業(消費耐用品) O 地產業
O 進出口貿易業(其他) O 商用服務業
貴公司總共的員工人數(包括海外機構)是
O 少於 10 人 O10-49 人 O50-100 人 O100 人以上
貴公司從商的時間有
O 不足 3 年 O3-7 年 O7 年以上
貴公司去年的總收入是
181
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2 資訊及通訊科技 - 個人電腦
貴公司是否使用個人電腦
O 是 (請跳過下一部份直接進入第 4 部份)
O 否
182
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
3 沒有使用個人電腦
貴公司不使用個人電腦的決定是基於以下什麼原因 完全沒有 沒有關系 有關系 重要原因 很重要
關系 原因
成本太昂貴 O O O O O
無此需求 O O O O O
難尋會用電腦的員工 O O O O O
無人去培訓員工 O O O O O
保養困難且費用昂貴 O O O O O
擔心保安問題 O O O O O
其他(請注明)
您認為如果使用電腦會對貴公司帶來好處嗎 如果會是什麼好處呢
在什麼樣的情況下您才會用個人電腦呢
如果政府可以提供以下各項支援您認為對貴公司安裝和使用電腦有用嗎
完全没用 有少少用 不知道 有用 很有用舉辦培訓課程 O O O O O
提供稅務優惠 O O O O O
提供更多使用電腦的好壞相關O O O O O
的資訊
提供技術支援 O O O O O
資助技術培訓費用 O O O O O
其他(請注明)
183
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
請直接進入第 11 部份
184
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
4 使用個人電腦
請問您用過以下哪幾種軟件 有幾經常
完全没用 很少用 有時用 經常用 很經常用 不適用
文字編輯 O O O O O O
試算表 電子表格 O O O O O O
數據庫管理 O O O O O O
通訊交流 O O O O O O
示範演示 O O O O O O
電腦安全軟件 O O O O O O
多媒體 O O O O O O
財政會計 O O O O O O
買賣交易訂單處理 O O O O O O
人事管理培訓 O O O O O O
其他(請注明)
使用個人電腦在以下幾個方面對貴公司有没有用
完全没 有少少 有時有 頗有用 極之有
用 用 用 用
提高效率降低成本 O O O O O
提高客戶服務質素 O O O O O
增加銷售額 O O O O O
尋求新的商機 O O O O O
增強競爭力 O O O O O
其他(請注明)
以下哪些電腦系統是貴公司專門訂製的經常用嗎 完全没用 很少用 有時用 經常用 很經常用
財政會計 O O O O O
買賣交易訂單處理 O O O O O
人事管理培訓 O O O O O
其他(請注明)
185
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
5 資訊及通訊科技 ndash互聯網
貴公司是否使用互聯網
O 是 (請跳過下一部份直接進入第 7 部份)
O 否
186
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
6 沒有使用互聯網
貴公司不使用互聯網是基於以下什麼原因 完全沒有
關系
沒有
關系有關系 重要原因
很重要
原因
員工會浪費時間 O O O O O
擔心網絡安全問題 O O O O O
保養困難且費用昂貴 O O O O O
商業夥伴及顧客沒用互聯網 O O O O O
競爭對手沒用互聯網 O O O O O
成本太昂貴 O O O O O
無此需求 O O O O O
缺乏經過培訓的員工 O O O O O
無人去培訓員工 O O O O O
其他(請注明)
您認為如果使用互聯網會對貴公司帶來好處嗎 如果會是什麼好處呢
您認為在什麼樣的情況下您才會用互聯網呢
如果政府可以提供以下各項支援您認為對貴公司安裝和使用互聯網有用嗎
完全 有少少用 不知 有用 很有用
没用 道
投資資訊及通訊科技基礎設施 O O O O O
立法保證安全私隱權和消費者權益 O O O O O
提供稅務優惠 O O O O O
提供更多使用互聯網的好壞的相關資訊 O O O O O
提供技術支援 O O O O O
資助技術培訓費用 O O O O O
187
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
舉辦培訓課程 O O O O O
其他(請注明)
請直接進入第 11 部份
188
189
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
7 使用互聯網
請問您用過以下哪幾種互聯網功能 有幾經常
沒用過 極少使用 有時用 經常用 用得非常多 不適用
收發電子郵件 O O O O O O
網上搜尋資料 O O O O O O
向供應商訂貨 O O O O O O
付款給供應商 O O O O O O
接受顧客訂單 O O O O O O
接受顧客付款 O O O O O O
獲取政府資訊 O O O O O O
反饋信息給顧客 O O O O O O
下載軟件 O O O O O O
電子銀行 O O O O O O
視像會議 O O O O O O
其他(請注明)
使用互聯網在以下幾個方面對貴公司有没有用
完全没用 有少少用 有時有用 頗有用 極之有用
打入新的市場 O O O O O
對市場變化作出即時反應 O O O O O
尋找網絡機會 O O O O O
提高效率降低成本 O O O O O
提高客戶服務質素 O O O O O
增加銷售額 O O O O O
開拓新的產品和服務 O O O O O
增強競爭力 O O O O O
其他(請注明)
貴公司是否有電子証書
O 是 O 否
貴公司如果更多地使用互聯網會令生意更上一層樓嗎會的話在哪方面呢
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
8 資訊及通訊科技 ndash網站
貴公司是否有網站
O 是 (請跳過下一部份直接進入第 10 部份)
O 否
190
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
9 沒有使用網站
貴公司不建立網站是基於以下什麼原因
完全沒有 沒有關系 有關系 重要 很重要
關系 原因 原因
商業夥伴沒有網站 O O O O O
網上交易在本行業不普遍 O O O O O
網上營銷在本行業不普遍 O O O O O
擔心網絡安全問題 O O O O O
保養困難且費用昂貴 O O O O O
商業夥伴及顧客沒用互聯網 O O O O O
競爭對手沒用互聯網 O O O O O
成本太昂貴 O O O O O
無此需求 O O O O O
缺乏經過培訓的員工 O O O O O
無人去培訓員工 O O O O O
其他(請注明)
您認為如果建立網站會為貴公司帶來好處嗎 如果會是什麼好處呢
您認為在什麼樣的情況下您才會建立網站呢
如果政府可以提供以下各項支援您認為對貴公司建立網站有用嗎
完全
没用
有少
少用
不知
道有用
很有
用
舉辦培訓課程 O O O O O
投資資訊及通訊科技基礎設施 O O O O O
立法保證安全私隱權和消費者權益 O O O O O
提供稅務優惠 O O O O O
提供更多使用資訊科技的好壞的相關資訊 O O O O O
提供技術支援 O O O O O
191
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
資助技術培訓費用 O O O O O
其他(請注明)
請直接進入第 11 部份
192
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
10 使用網站
請問您用過以下哪幾種網站功能 有幾經常
沒用過 極少 有時用 經常用 用得非 不適用
使用 常多
提供公司產品及服務資訊 O O O O O O
處理客戶查詢 O O O O O O
接受顧客訂單 O O O O O O
接受顧客付款 O O O O O O
獲取政府資訊 O O O O O O
交付産品和服務 O O O O O O
提供售後服務 O O O O O O
反饋信息給顧客 O O O O O O
網上營銷 O O O O O O
知識管理 O O O O O O
其他(請注明)
使用網站在以下幾個方面對貴公司有没有用
完全没用 有少少用 有時有用 頗有用 極之有用
提供電子商務 O O O O O
增強與商業夥伴聯系 O O O O O
開拓新的產品和服務 O O O O O
整合服務提高效率 O O O O O
創造新的商業模式 O O O O O
改善商業流程提高靈活性 O O O O O
打入新的市場 O O O O O
對市場變化作出即時反應 O O O O O
尋找網絡機會 O O O O O
提高效率降低成本 O O O O O
提高客戶服務質素 O O O O O
增加銷售量 O O O O O
增強競爭力 O O O O O
其他(請注明)
193
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
貴公司的網頁是否與公司的數據庫整合
O 是 O 否
貴公司的網頁是否與商業夥伴的數據庫整合
O 是 O 否
194
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
11 縱觀資訊及通訊科技的運用
總的來說 您覺得貴公司運用資訊及通訊科技的頻率是 O 完全没用
O 用得很少
O 有用一些
O 常用
O 很常用
總的來說 您覺得資訊及通訊科技對貴公司的用處有多大
O 完全没用
O 有少少用
O 有一些用
O 有不少用
O 非常有用
謝謝您完成我們的問卷調查
195
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 11 Telephone interview guidelines
Background information The interview follows a semi-structured format The following questions as well as the survey provided in both Chinese and English are used as guidelines The purposes of this interview are three folded
bull To find out the motivations behind ICT adoptions bull To find out the issues hindering the companyrsquos decision to adopt ICT bull To find out the main benefits perceived by the company by adopting ICT bull To look for good practices of adopting ICT
Procedures The interview should be conducted in either Chinese or English depending on the language the interviewee prefers The interviewee needs to have the authority to make IT investment decisions Try to ask open-ended questions The survey in hand can be used as a guide when the interviewee is unable to answer The structure of the survey needs to be learned by heart After the interview interviewers need to fill in the telephone survey response online
Interviewee information bull The name of interviewer bull The name of the firm interviewed bull The name of the interviewee bull The contact number of the interviewee bull Whether the company would like to conduct a second more in-depth interview
(Please ask this question before closing the interview)
Company background information bull The industry (the industry code is already provided please confirm by asking the
products and services they provided) bull The number of people working for the company including their overseas
operations bull The number of years the firm has been in the business bull The total revenue of the firm in the last financial year (Please ask this question at
the end of the interview and the answer is optional)
Questions The purpose is to find out whether the firm has used PC (personal computer) Internet or Company Website or not
196
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
If yes then ask which functionssoftware they use most often and what benefits they have gained from using them If not then ask why not under what circumstances they will consider the adoption and what the Government can do to help them
197
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 12 Online survey in English69
1 GENERAL INFORMATION
Please mark the business sector your firm belongs to OManufacturing ORestaurants Hotels and Boarding Houses OConstruction OTransport and Storage OWholesaleRetail OCommunications OImport amp Export-Consumer non-durable goodsOFinancing and Insurance OImport amp Export ndash Consumer durable goods OReal EstateOImport amp Export ndash Miscellaneous goods OBusiness Services
Number of persons engaged in your firm (including overseas operations)OLess than 10 people O10-49 people O50-100 people O Over 100 people
Number of years your firm has been in businessOLess than 3 years O3-7 years OMore than 7 years
Total revenuesales in the last fiscal year
69 An email invitation providing a link to the online survey in English and a link to the online survey in Chinese is sent to company directors
198
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
2 USING PCs
Please mark the extent to which your firm uses software for the following tasks Not at Very Sometimes Often Very NA
all little often Word processing O O O O O O
Spreadsheet O O O O O O
Database Management O O O O O O
Communication O O O O O O
Presentation O O O O O O
Computer security O O O O O O
Multi-media O O O O O O
FinanceAccounting O O O O O O
PurchaseSales amp Order processing O O O O O O
HRMTraining O O O O O O
Other (please specify)
How much value do you think PCs have added to the following aspects of your business No Very little Some Significant Great value
value value value value added added added added added
Improving operational efficiencyreducing costs O O O O O
Improving customer services O O O O O
Increasing sales O O O O O
Exploring new opportunities for growing business O O O O O
Providing competitive advantage O O O O O
Other (please specify)
Please mark the extent to which your firm uses the following tailor-made computer systems
Not at all Very little Sometimes Often Very often FinanceAccounting O O O O O
PurchasingSale and Order Processing O O O O O
Human Resource ManagementTraining O O O O O
Other (please specify)
199
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
3 USING THE INTERNET
Please mark the extent that your firm uses the Internet for the following purposes Not Very Sometimes Often Very NA
at all little often Email O O O O O O
Online sourcing of general information O O O O O O
Online ordering from suppliers O O O O O O
Online payments to suppliers O O O O O O
Online sales to customers O O O O O O
Online receipt of payments from customers O O O O O O
Government information O O O O O O
Provision of informationfeedback to customers O O O O O O
Software downloads O O O O O O
E-banking services O O O O O O
Video conferencing O O O O O O
Other (please specify)
How much value do you think the Internet has added to the following aspects of your business No Very little Some Significant Great
value value value value added value added added added added
Penetration into new markets O O O O O
Prompt response to market changes O O O O O
Exploitation of network opportunities O O O O O
Improving operational efficiencyreducing costs O O O O O
Improving customer services through integrated processes O O O O O
Increasing sales O O O O O
Creation of new productsservices O O O O O
Providing competitive advantages O O O O O
Other (please specify)
Does your firm have a digital certificateOYes ONo
200
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Do you think that using the Internet more would help improve the business of your firm If so how
201
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4 ICT ndash WEBSITE USAGE
Does your firm have a Website
OYes
ONo
202
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5 NOT USING A WEBSITE
How important are the following reasons for your firm not having a Website Not Little Important Very Highly
important important important important Business partners do not have a Website O O O O O
Online transaction is not common in the industry O O O O O
Online marketing is not common in the industry O O O O O
There are concerns about Internet security O O O O O
Maintenance is difficult and expensive O O O O O
Business partners and customers are not using the O O O O OInternetCompetitors are not using the Internet O O O O O
It is costly O O O O O
It is not really needed O O O O O
There is difficulty finding trained personnel to use it O O O O O
There is no one to train the personnel O O O O O
Other (please specify)
Do you think that creating a Website would help improve your business If so how
What would really motivate or push you to create a Website
How useful would the following types of Government support be to your firm for creating a Website Not Little Not Very Highly
useful useful sure useful useful Holding training workshopsseminars O O O O O
Investing in ICT infrastructure O O O O O
Building the right legal and regulatory framework to ensure security trust privacy and consumer protection O O O O O
Providing tax incentives for ICT investments O O O O O
Providing more information on the costs and benefits of O O O O O
203
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using ICT Providing ICT adoption consulting services O O O O O
Subsidising ICT training O O O O O
Other (please specify)
204
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6 USING A WEBSITE
Please mark the extent that your firm uses its Website for the following purposes Not Very Sometimes Often Very NA
at all little often Providing information on the firmrsquos products and services O O O O O O
Handling of business enquiry O O O O O O
Receiving online orders O O O O O O
Receiving online payments O O O O O O
Access to government information O O O O O O
Delivery of products O O O O O O
After sales services O O O O O O
Collection of feedbacks O O O O O O
Online marketing O O O O O O
Knowledge management O O O O O O
Other (please specify)
How much value do you think your Website has added to the following aspects of your business No Very little Some Significant Great
value value value value value added added added added added
Availability of online transaction O O O O O
Strengthening the relationships with business partners O O O O O
Creation of new productsservices O O O O O
Improve productivity through service integration O O O O O
Creation of new business models O O O O O
Streamlining of the business promoting flexibility O O O O O
Penetration into new markets O O O O O
Prompt response to market changes O O O O O
Exploitation of network opportunities O O O O O
Improving operational efficiencyreducing costs O O O O O
Improving customer services through integrated processes O O O O O
Increasing sales O O O O O
Providing competitive advantage O O O O O
Other (please specify)
205
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Is your firmrsquos Websitewebpage integrated with the firmrsquos databaseOYes ONo
Is your firmrsquos Websitewebpage integrated with your business partnersrsquo database OYes ONo
206
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7 OVERALL ICT USAGE
Overall to what extent do you feel that your firm currently uses ICTO Not at all O Very littleO SometimesO Often O Very often
Overall to what extent do you feel that using more ICT would increase the value added to your firm O No value addedO Very little value added O Some value addedO Significant value addedO Great value added
Thank you for answering this survey
207
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 13 Online survey in Chinese70
1 貴公司基本情况
貴公司所屬的行業是
O 製造業 O 飲食及酒店業
O 建造業 O 運輸倉庫業
O 批發業零售業 O 通訊業
O 進出口貿易業(非消費耐用品) O 金融保險業
O 進出口貿易業(消費耐用品) O 地產業
O 進出口貿易業(其他) O 商用服務業
貴公司總共的員工人數(包括海外機構)是
O 少於 10 人 O10-49 人 O50-100 人 O100 人以上
貴公司從商的時間有
O 不足 3 年 O3-7 年 O7 年以上
貴公司去年的總收入是
70 An email invitation providing a link to the online survey in English and a link to the online survey in Chinese is sent to company directors
208
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
2 使用个人電腦
請問您用過以下哪幾種軟件 有幾經常
完全没用 很少用 有時用 經常用 很經常用 不適用
文字編輯 O O O O O O
試算表 電子表格 O O O O O O
數據庫管理 O O O O O O
通訊交流 O O O O O O
示範演示 O O O O O O
電腦安全軟件 O O O O O O
多媒體 O O O O O O
財政會計 O O O O O O
買賣交易訂單處理 O O O O O O
人事管理培訓 O O O O O O
其他(請注明)
使用個人電腦在以下幾個方面對貴公司有没有用
完全没用 有少少用 有時有用 頗有用 極之有用
提高效率降低成本 O O O O O
提高客戶服務質素 O O O O O
增加銷售額 O O O O O
尋求新的商機 O O O O O
增強競爭力 O O O O O
其他(請注明)
以下哪些電腦系統是貴公司專門訂製的經常用嗎 完全没用 很少用 有時用 經常用 很經常用
財政會計 O O O O O
買賣交易訂單處理 O O O O O
人事管理培訓 O O O O O
其他(請注明)
209
210
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
3 使用互聯網
請問您用過以下哪幾種互聯網功能 有幾經常
沒用過 極少使用 有時用 經常用 用得非常多 不適用
收發電子郵件 O O O O O O
網上搜尋資料 O O O O O O
向供應商訂貨 O O O O O O
付款給供應商 O O O O O O
接受顧客訂單 O O O O O O
接受顧客付款 O O O O O O
獲取政府資訊 O O O O O O
反饋信息給顧客 O O O O O O
下載軟件 O O O O O O
電子銀行 O O O O O O
視像會議 O O O O O O
其他(請注明)
使用互聯網在以下幾個方面對貴公司有没有用
完全没用 有少少用 有時有用 頗有用 極之有用
打入新的市場 O O O O O
對市場變化作出即時反應 O O O O O
尋找網絡機會 O O O O O
提高效率降低成本 O O O O O
提高客戶服務質素 O O O O O
增加銷售額 O O O O O
開拓新的產品和服務 O O O O O
增強競爭力 O O O O O
其他(請注明)
貴公司是否有電子証書
O 是 O 否
貴公司如果更多地使用互聯網會令生意更上一層樓嗎會的話在哪方面呢
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
4 資訊及通訊科技 ndash網站
貴公司是否有網站
O 是
O 否
211
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
5 沒有使用網站
貴公司不建立網站是基於以下什麼原因
完全沒有 沒有關系 有關系 重要 很重要
關系 原因 原因
商業夥伴沒有網站 O O O O O
網上交易在本行業不普遍 O O O O O
網上營銷在本行業不普遍 O O O O O
擔心網絡安全問題 O O O O O
保養困難且費用昂貴 O O O O O
商業夥伴及顧客沒用互聯網 O O O O O
競爭對手沒用互聯網 O O O O O
成本太昂貴 O O O O O
無此需求 O O O O O
缺乏經過培訓的員工 O O O O O
無人去培訓員工 O O O O O
其他(請注明)
您認為如果建立網站會為貴公司帶來好處嗎 如果會是什麼好處呢
您認為在什麼樣的情況下您才會建立網站呢
如果政府可以提供以下各項支援您認為對貴公司建立網站有用嗎
完全
没用
有少
少用
不知
道有用
很有
用
舉辦培訓課程 O O O O O
投資資訊及通訊科技基礎設施 O O O O O
立法保證安全私隱權和消費者權益 O O O O O
提供稅務優惠 O O O O O
提供更多使用資訊科技的好壞的相關資訊 O O O O O
提供技術支援 O O O O O
212
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
資助技術培訓費用 O O O O O
其他(請注明)
213
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
6 使用網站
請問您用過以下哪幾種網站功能 有幾經常
沒用過 極少 有時用 經常用 用得非 不適用
使用 常多
提供公司產品及服務資訊 O O O O O O
處理客戶查詢 O O O O O O
接受顧客訂單 O O O O O O
接受顧客付款 O O O O O O
獲取政府資訊 O O O O O O
交付産品和服務 O O O O O O
提供售後服務 O O O O O O
反饋信息給顧客 O O O O O O
網上營銷 O O O O O O
知識管理 O O O O O O
其他(請注明)
使用網站在以下幾個方面對貴公司有没有用
完全没用 有少少用 有時有用 頗有用 極之有用
提供電子商務 O O O O O
增強與商業夥伴聯系 O O O O O
開拓新的產品和服務 O O O O O
整合服務提高效率 O O O O O
創造新的商業模式 O O O O O
改善商業流程提高靈活性 O O O O O
打入新的市場 O O O O O
對市場變化作出即時反應 O O O O O
尋找網絡機會 O O O O O
提高效率降低成本 O O O O O
提高客戶服務質素 O O O O O
增加銷售量 O O O O O
增強競爭力 O O O O O
其他(請注明)
214
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
貴公司的網頁是否與公司的數據庫整合
O 是 O 否
貴公司的網頁是否與商業夥伴的數據庫整合
O 是 O 否
215
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
7 縱觀資訊及通訊科技的運用
總的來說 您覺得貴公司運用資訊及通訊科技的頻率是 O 完全没用
O 用得很少
O 有用一些
O 常用
O 很常用
總的來說 您覺得資訊及通訊科技對貴公司的用處有多大
O 完全没用
O 有少少用
O 有一些用
O 有不少用
O 非常有用
謝謝您完成我們的問卷調查
216
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 14 Data Merge and Transformation for further analysis
1 Data merge
Merge the data into one table (a) Survey ndash by mail (b) Survey ndash by phone (c) Survey ndash by email (English) (d) Survey ndash by email (Chinese)
Source Total Survey Survey ndash by mail 693 Survey ndash by phone 102 Survey ndash by email
bull English -39 bull Chinese - 63
Total 897 (Total Survey)
2 Data transformation
(a) Number of persons engaged in your firm Raw data Transformed data
Less than 10 people 5 10 - 49 people 25 50 - 100 people 75 Over 100 people 101
For manufacture if number of employee gt 100 then NOT SME ignore it For other industries if number of employee gt 50 then NOT SME ignore it
(b) Number of years your firm has been in business
Raw data Transformed data
Less than 3 years 2 3-7 years 5 More than 7 years 8
(c) Industrial Sectors
217
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull Manufacturing -gt 301 bull Construction -gt 501 bull WholesaleRetail -gt 601 bull Import and Export - Consumer non-durable goods -gt 602 bull Import amp Export - Consumer durable goods -gt 603 bull Import amp Export - Miscellaneous goods -gt 604 bull Restaurants Hotels and Boarding Houses -gt 605 bull Transport and Storage -gt 701 bull Communications -gt 702 bull Financing and Insurance -gt 801 bull Real Estate -gt 802 bull Business Services -gt 803
(d) Values assigned to the responses
bull Not important --gt 0 Little important---gt 1 Important--gt2 Very important- --gt 3 High important--gt 4 bull Not useful --gt 0 Little useful--- 1gt Not sure --gt2 Very useful- --gt 3 High useful --gt 4 bull Not at all --gt 0 Very little--- 1gt Sometimes --gt2 Often- --gt 3 Very often --gt 4 NA--gt 0 bull No value added --gt 0 Very little value added --gt 1 Some value added --gt 2 Significant value added --gt 3 Great value added --gt 4 bull NO --gt 0 YES--- 1gt
3 Data selection
Select SME only
For manufacture if number of employee lt 100 then is SME For other industries if number of employee lt 50 then is SME
218
N Mean Std Deviation Std Error
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 15 RevenueSales in the last fiscal year ndash by industry size and age
151 Revenue Breakdown By Sector
95 Confidence Interval for Mean
Minimum Maximum Lower Bound Upper Bound
301 41 2923982739 1219E8 19034310422 -922994898 6770960376 59000 8E8
501 33 285743403 3741336262 651283047 153081388 418405418 150000 15000000
601 90 1664371319 1055E8 11125197493 -546181726 3874924363 10000 1E9
602 24 1773216667 27323788509 5577444974 619434267 2926999066 219000 1E8
603 26 5962015385 1972E8 38669139962 -2002043071 139E8 50000 1E9
604 36 1440023083 25635847654 4272641276 572630791 2307415376 125000 1E8
605 9 369611111 4038952353 1346317451 59149750 680072472 90000 12000000
701 18 703168733 14677261222 3459463647 -26714296 1433051763 5 63327855
702 5 913940440 13299818631 5947859709 -737450158 2565331038 110610 30000000
801 21 2902182857 1281E8 27950740415 -2928239426 8732605140 100000 6E8
802 7 73750100 1052509304 397811124 -23590775 171090975 70000 3000000
803 76 600408357 34360255601 3941391627 -184757118 1385573832 824 3E8
Total 386 1699904247 89693952915 4565302001 802299762 2597508733 5 1E9
219
N Mean Std Deviation Std Error
N Mean Std Deviation Std Error
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
152 Revenue Breakdown By Number of Employee
95 Confidence Interval for
Mean
Minimum Maximum Lower Bound Upper Bound
5 303 473571424 19977266559 1147663977 247728342 699414506 5 3E8
25 82 6154411376 1848E8 20412653467 2092933633 102E8 100000 1E9
75 5 1712000000 22095180470 9881265101 -1031479012 4455479012 100000 50000000
Total 390 1683881729 89245778704 4519135672 795383022 2572380436 5 1E9
153 Revenue Breakdown By Age Business year
95 Confidence Interval for
Mean
Minimum Maximum Lower Bound Upper Bound
2 51 1302927202 82159196233 11504588621 -1007837429 3613691832 10000 6E8
5 95 1438550640 81082800535 8318919808 -213190389 3090291669 11500 8E8
8 240 1854151498 94606234393 6106806171 651147685 3057155310 5 1E9
Total 386 1679036159 89684007888 4564795812 781531198 2576541121 5 1E9
220
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 16 Use of Personal Computers (PCs) - Does your firm use Personal Computers (PCs)
Does your firm use Personal Computers (PCs)
Code
0 NO
1 YES
Statistics Have_PC
N Valid 785
Missing 4
Have_PC
Frequency Percent Valid
Percent Cumulative
Percent
Valid 0
1
Total Missing System Total
100
685
785 4
789
127
868
995 5
1000
127
873
1000
127
1000
221
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 17 Use of Personal Computers (PCs) - Not using PCs - How important are the following reasons for your firm not to use PCs
Not using PCs - How important are the following reasons for your firm not to use PCs
Sector No_of_employee Business_year
N Valid
Missing Mean Median Std Deviation Minimum Maximum
98
2
100
0
100
0
Statistics
No_trained_ No_one_train Difficult_mai Security_issue It_costly It_not_need person _ person ntain s
N Valid 63 75 59 59 59 56
Missing 37 25 41 41 41 44 Mean 144 177 100 122 154 123 Median 100 200 100 100 100 100 Std Deviation 1175 1420 1083 1301 1264 1175 Minimum 0 0 0 0 0 0 Maximum 4 4 4 4 4 4
222
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 18 Use of Personal Computers (PCs) - Not using PCs - ANOVA
Not using PCs - ANOVA
In the frequency table of sectors cluster Sectors 602 603 and 604 as one industry (Import amp Export) and exclude 605 701 801 and 802 as these industries had a sample size lt10
181 ANOVA - By Sector (industry)
Sum of Squares df Mean Square F Sig
It_costly Between Groups 5155 4 1289 905 469
Within Groups 65472 46 1423
Total 70627 50
It_not_need Between Groups 12901 4 3225 1626 180
Within Groups 115035 58 1983
Total 127937 62
No_trained_person Between Groups 776 4 194 166 955
Within Groups 49139 42 1170
Total 49915 46
No_one_train person
Between Groups
Within Groups
Total
4627
75852
80479
4
43
47
1157
1764
656 626
Difficult_maintain Between Groups 2742 4 685 392 813
Within Groups 75175 43 1748
Total 77917 47
Security_issues Between Groups 443 4 111 079 988
Within Groups 56135 40 1403
Total 56578 44
223
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
182 ANOVA - By Number_of_employee
Sum of Squares df Mean Square F Sig
It_costly Between Groups 316 1 316 220 641
Within Groups 70311 49 1435
Total 70627 50
It_not_need Between Groups 428 1 428 205 653
Within Groups 127509 61 2090
Total 127937 62
No_trained_person Between Groups 1096 1 1096 1010 320
Within Groups 48819 45 1085
Total 49915 46
No_one_train_perso n
Between Groups
Within Groups
Total
768
79712
80479
1
46
47
768
1733
443 509
Difficult_maintain Between Groups 4112 1 4112 2563 116
Within Groups 73805 46 1604
Total 77917 47
Security_issues Between Groups 2178 1 2178 1721 196
Within Groups 54400 43 1265
Total 56578 44
224
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183 ANOVA - By Business_year
Sum of Squares df Mean Square F Sig
It_costly Between Groups 2139 2 1069 749 478
Within Groups 68489 48 1427
Total 70627 50
It_not_need Between Groups 3551 2 1776 857 430
Within Groups 124385 60 2073
Total 127937 62
No_trained_person Between Groups 1281 2 640 579 565
Within Groups 48634 44 1105
Total 49915 46
No_one_train_ person
Between Groups
Within Groups
Total
2743
77736
80479
2
45
47
1371
1727
794 458
Difficult_maintain Between Groups 1352 2 676 397 674
Within Groups 76565 45 1701
Total 77917 47
Security_issues Between Groups 939 2 470 354 704
Within Groups 55639 42 1325
Total 56578 44
225
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Appendix 19 Use of Personal Computers (PCs) - Do you think that using PCs would help improve the operations of your firm If so how
Do you think that using PCs would help improve the operations of your firm If so how
Of the 693 responses received to the mail survey 82 respondents stated that they do not use PCs 35 of these respondents replied to this question
1 容易找尋產品 Easy to search for products
2 會有幫助 (PCs will be helpful) 3 有好處 會使公司管理更好 運作速度加快
Yes it will improve the companys management and increase the operational speed
4 無好處 因目前不順用 No as it is not suitable now
5 方便 有效率處理工作 Convenient get the work done more efficiently
6 會 查詢客人資料比較方便 Yes it will be more convenient to ask for clients information
7 較直接 More direct
8 Nil 9 當然會令公司運作帶來方便 不用再手寫入數 貨號會清楚
查貨時更快更方便 Of course it will bring more convenience to the companys operations We do not have to records the financial accounts manually The products serial numbers will be clearer so it will be faster and more convenient when we check the goods
10 More effective and easy for communications to USA and China colleagues and worldwide customers
11 不會 No
12 無需要 It is not needed
13 不需要 It is not needed
226
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
14 Not many advantages 15 沒有
No 16 會方便 解悶
Yes They are convenient and can help you feel less bored 17 有 找資料快
Yes it is very fast for searching information 18 有好處 記錄會很清楚
Yes it will make the records very clear 19 會提高效率
Yes it will increase the efficiency 20 會因 在鋪內資訊會多 d同可做更多工作
Yes It will bring more information to the shop and it will increase our outputs 21 不會
no 22 認為較方便
Yes It is more convenient 23 不知字 沒有使用電腦
I am illiterate I do not use PCs 24 會 可以使用電子銀行
Yes as we can use electronic banking 25 No 26 管理存貨及帳目上有一定好處
PCs will have certain advantages for the management of inventories and financial accounts
27 方便 Convenience
28 方便查料 It is convenient to search for information
29 增加客源 To increase the client base
30 快 節省人力 Fast Saving man power
31 Stock control 32 方便快捷
Convenient fast 33 方便查找客人過往的購貨紀錄
IT is convenient to chase a customers previous purchase record 34 有好處可將業務擴張到世界各地
227
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Yes it can help extend the business across the globe 35 儲存和文書上會較方便且翻查紀錄會容易些
More convenient in terms of record-saving paper work and record-chasing
Hence of the 35 replies 10 respondents said that using PCs would not help the operations of their business Of the 25 respondents who said that the use of PCs would be beneficial the main reasons given were
bull Improving efficiency by saving time and reducing manpower bull Added convenience bull Helps marketing efforts and increasing the client base (which has to do with the
Internet or Stage 2) bull Easy to search for products (which has to do with the Internet or Stage 2) bull Communications (which has to do with the Internet or Stage 2)
Of the 98 ldquoSMErdquo responses received in the telephone survey 19 respondents said that they did not use a PC and replied to this question
1 yes fast and accurate 2 yes can communicate instantly with others 3 No 4 may be yes because storage booking date more accurate and fast 5 No 6 no because dont know how to use computer 7 No 8 no idea since she is nearly retired 9 no because his company nearly closed 10 no not business related 11 no not business related 12 cant improve 13 she dont know since she is working without computer nowadays 14 no this is a traditional business and no need computer 15 no computer not related to her business 16 no because they are working in a traditional business and seldom use computer 17 yes can help to retrieve data easily 18 No 19 No
228
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Of these 19 responses 15 respondents said that using PCs would not help the operations of their business The remaining 4 said that the use of PCs would be beneficial the main reasons given were
bull Fast and accurate bull Communications (which has to do with the Internet or Stage 2)
229
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 20 Use of Personal Computers (PCs) - What would really motivate or push you to use PCs
What would really motivate or push you to use PCs
Of the 82 respondents who stated that they do not use PCs in the mail survey 35 answered this question
1 識操作 (I know how to use) 2 員工人數增加
Increase in number of staff 3 如果我學會使用電腦 (因我還不識使用電腦)
If I learn how to use computers (As I do not know how to use the computer) 4 業務再發展 高科技用到時 合用
When the business further develops and when the high technology is useful for business
5 編輯合同(工作 ) Editing contracts (work)
6 當生意額有所增長 When the business amount increases
7 有專人教授 When there is an expert teaching it
8 聯絡及接收客人訊息 Communicate can receive clients messages
9 整理帳目 To manage the financial accounts
10 開單 查貨 查公司資料時 設計圖樣 When issuing invoices checking goods checking company information and designing drawings
11 Cheap package 12 貨品太多需要紀錄
When there are too many products that needed to be recorded 13 如果公司有好的盈利可考慮的
If the company has good profits we can consider about it 14 沒有研究
We have not considered about it yet 15 增加收入
If it can increase the revenue 16 不需要
230
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It is not needed 17 Not necessary 18 Business Expansion 19 有需要的時候
When it is needed 20 當我退休後
After I retire 21 有大量資料要記錄時
When there is huge amount of information to be recorded 22 影印文具
Photocopying stationery (not sure what does the interviewee mean) 23 一回家就用多用途 例查看什麼都可以
I use the PCs once I am back home We can search for everything 24 有需要
when needed 25 不曾使用電腦
I have never used PCs before 26 半退休個人 78歳
I am semi-retired and is 78 years old now 27 查資訊及電子銀行
To search for information and use electronic banking 28 有需要 有正面效益
When they are needed and provide positive benefits 29 有足夠人手及時間做好後勤培訓才考慮
We will consider it when there are enough human resources and time for back-office training
30 不再有電腦病毒 When there is no more computer virus
31 網上銷售 On-line sales
32 熟悉電腦 When (i am) familiar with computer
33 有足夠空間 Provided we have enough space
34 在家 At home
35 暫無需要 Temporarily unnecessary
231
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Hence of the 35 replies some of the primary motivators to encourage the use of PCs were given as
bull Increase in number of staff bull Increase in space available bull Business needs grow bull If the respondent learns how to use the computer bull Overcome fear of viruses bull If cheap packages are available
Of the 98 responses received in the telephone survey 19 respondents said that they did not use a PC and replied to this question
1 if he can employ people that know how to use he will 2 move to a larger place then will 3 no business need 4 if the company become larger it may be consider 5 no business need so will not use 6 no idea 7 no need 8 no need since she is nearly retired 9 no because his company nearly closed 10 No 11 no need 12 no need since not business related 13 yes if some one buy her a computer 14 no need computer at all 15 no need 16 financial support and technical support 17 financial help from government 18 No 19 No
Hence of the 19 replies 13 replied that there was no need for a computer The remaining 6 causes for motivating a respondent to use a computer
bull If staff are aware of how to use the computer bull Increase in space available bull Business needs grow
232
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
bull If a computer was presented bull Financial and technical support bull Financial help from the government
233
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 21 Use of Personal Computers (PCs) - How useful would the following types of Government support be to your firm for installing and using computers
How useful would the following types of Government support be to your firm for
installing and using computers
Statistics
Holding workshops Tax incentive Provide info
Provide consulting
Subside training
N Valid
Missing Mean Median Std Deviation Minimum Maximum
70
30 164 100
1465 0 4
64
36 191 300
1611 0 4
62
38 184 200
1428 0 4
64
36 219 300
1521 0 4
65
35 222 300
1546 0 4
234
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 22 Use of Personal Computers (PCs) - How useful would the following types of Government support be to your firm for installing and using computers -
ANOVA
Not using PCs - How useful would the following types of Government support be to your firm for installing and using computers
221 ANOVA - BY Sector (industry)
Sum of Squares df Mean Square F Sig
Holding_workshop Between Groups
Within Groups
Total
22666
124986
147652
9
59
68
2518
2118
1189 319
Tax_incentive Between Groups
Within Groups
Total
32070
130152
162222
10
52
62
3207
2503
1281 265
Provide_info Between Groups
Within Groups
Total
27797
95875
123672
9
51
60
3089
1880
1643 128
Provide_consulting Between Groups
Within Groups
Total
19273
123140
142413
9
53
62
2141
2323
922 514
Subside_training Between Groups
Within Groups
Total
16969
135390
152359
9
54
63
1885
2507
752 660
235
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
222 ANOVA - BY (No_of_Employee)
Sum of Squares df Mean Square F Sig
Holding_workshop Between Groups
Within Groups
Total
687
147385
148071
1
68
69
687
2167
317 575
Tax_incentive Between Groups
Within Groups
Total
468
162969
163438
1
62
63
468
2629
178 675
Provide_info Between Groups
Within Groups
Total
5026
119361
124387
1
60
61
5026
1989
2526 117
Provide_consulting Between Groups
Within Groups
Total
3581
142169
145750
1
62
63
3581
2293
1561 216
Subside_training Between Groups
Within Groups
Total
7601
145383
152985
1
63
64
7601
2308
3294 074
236
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
223 ANOVA - BY (Business_year)
Sum of Squares df Mean Square F Sig
Holding_workshop Between Groups
Within Groups
Total
4417
143654
148071
2
67
69
2209
2144
1030 363
Tax_incentive Between Groups
Within Groups
Total
12803
150635
163437
2
61
63
6401
2469
2592 083
Provide_info Between Groups
Within Groups
Total
3809
120578
124387
2
59
61
1904
2044
932 400
Provide_consulting Between Groups
Within Groups
Total
10989
134761
145750
2
61
63
5494
2209
2487 092
Subside_training Between Groups
Within Groups
Total
11643
141342
152985
2
62
64
5821
2280
2554 086
Further analysis of the significant differences by Business Year
N Mean Std Deviation
Holding_workshops 2
5
8
Total
5
9
44
58
220
211
145
162
837
1616
1517
1497
237
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Tax_incentive 2 5 220 1095
5 9 289 1453
8 39 156 1619
Total 53 185 1610
Provide_info 2 5 240 894
5 9 222 1394
8 37 157 1501
Total 51 176 1450
provide_consulting 2 5 320 837
5 10 290 1370
8 39 185 1548
Total 54 217 1539
Subside_training 2 5 340 894
5 10 300 1247
8 39 192 1628
Total 54 226 1592
238
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 23 Use of Personal Computers (PCs) - Using PCs - Please mark the extent to which your firm uses software for the following tasks
Using PCs - Please mark the extent to which your firm uses software for the following tasks
Sector No_of_employee Business_year
N Valid
Missing
679
6
685
0
675
10
Statistics
Word Spreadsheet Database Communication Presentation
N Valid
Missing Mean Median Std Deviation Minimum Maximum
604
81 319 300
1003 0 4
581
104 295 300
1221 0 4
559
126 215 200
1484 0 4
574
111 313 400
1187 0 4
529
156 140 100
1283 0 4
Statistics
Security MultiMedia Finance Sales HRM
N Valid
Missing Mean Median Std Deviation
570
115 304 300
1133
549
136 215 200
1328
572
113 259 300
1418
564
121 229 300
1552
534
151 109 100
1208
239
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Minimum Maximum
0 4
0 4
0 4
0 4
0 4
240
The original document contains some material which was collected in commercial confidence To enable public access to the document the parts that contain commercially sensitive information have been masked out This document as shown represents the views or comments of the independent Consultant based on its findings during the consultancy study The publication of this document does not necessarily mean that the Government has adopted or endorsed or otherwise any views recommendations or conclusions of the Consultant
Appendix 24 Use of Personal Computers (PCs) - Using PCs - Please mark the extent to which your firm uses software for the following tasks ndash ANOVA across Industry
Number of Employees Age of the firm
Using PCs - Please mark the extent to which your firm uses software for the following tasks ndash ANOVA across Industry Number of Employees Age of the firm
(Sectors 605 and 702 have been excluded from the ANOVA analysis as their sample size lt10)
241 ANOVA - By Sector (industry)
Sum of Squares df Mean Square F Sig
Word Between Groups
39095 9 4344 4541 000
Within Groups 551982 577 957
Total 591077 586
Spreadsheet Between Groups
Within Groups
Total
40662
813739
854401
9
553
562
4518
1471
3070 001
Database Between Groups
36738 9 4082 1862 055
Within Groups 1164219 531 2193
Total 1200957 540
Communicatn Between Groups
34571 9 3841 2760 004
Within Groups 759866 546 1392
Total 794437 555
241