Emerging IEmerging ICCT Markets T Markets inin SouthSouth E East Europe ast Europe

Goran RadmanGoran RadmanMicrosoft CorporationMicrosoft CorporationChairman SEEChairman SEE

EU Lisabon AgendaEU Lisabon Agenda

Labour productivity by Industry Group on the basis of ICT taxonomy, EU and U.S., 1995-2001

EU US EU USTotal Economy 2.3 1.1 1.7 2.2

ICT Producing Industries 5.9 8.1 7.5 10.0 ICT Producing Manufacturing 8.4 16.1 11.9 23.7 ICT Producing Services 4.8 2.4 5.9 1.8

ICT Using Industries 2.0 1.2 1.9 4.7 ICT Using Manufacturing 2.4 -0.6 1.8 0.4 ICT Using Services 1.8 1.6 1.8 5.3

Non-ICT Industries 2.1 0.3 1.0 -0.2 Non-ICT Manufacturing 3.6 2.7 1.6 0.3 Non-ICT Services 1.2 -0.5 0.5 -0.3 Non-ICT Other 3.2 1.2 2.1 0.7

1990-1995 1995-2001

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ICT - producing manufacturing and ICT - using services

• EU 2010: US benchmarkEU 2010: US benchmark

• New Competitors: India and ChinaNew Competitors: India and China

• Agenda 2004-09: Jobs, Competitiveness and InnovationAgenda 2004-09: Jobs, Competitiveness and Innovation

SEE SEE WithWithin in the EUthe EU

0

5.000

10.000

15.000

20.000

25.000

Italy Spain Be lgium Austria CEE SEE Ire land Portugal EU 12 Russia

SEE Region is slightly larger than Ireland and Portugal Markets, but holds significantly more potential

IT Spending (US$M)

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SEESEE Invests MoreInvests More

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2000 2001 2002 2003 2004 2005 2006 2007 20081,12% 1,24% 1,33% 1,48% 1,55% 1,65% 1,74% 1,82% 1,89%

Investment driving factors: Infrastructure, privatization, EU

7,0%

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10,0%

12,0%

13,0%

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S & M

Bulgaria

Romania

Macedonia

Croatia

Slovenia

SEE Grows FasterSEE Grows Faster

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SEE Creates JobsSEE Creates Jobs

-

30.000

60.000

90.000

120.000

150.000

2004 2005 2006 2007 2008

General IT employment will increase by 35.000 new jobs to total over 148,073 in 2008. Over 50% of these jobs will be software or software

related employment

Other Services and ChannelsIT Hardware Other IT Professionals Total Software

Employees

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……But Less NetworkedBut Less Networked

COUNTRY SCORE

RANK

United States 2,02 1

Singapore 1,89 2

…. …… …..

Slovenia 0,34 35

Croatia -0,23 57

Romania -0,23 58

Bulgaria -0,31 64

Serbia & Montenegro -0,63 80

Macedonia -0,67 82

Moldova -0,78 94

Bosnia and Herzegovina -0,87 97

Albania -1,04 106

Key factors:Key factors:

InfrastructureInfrastructure

ReadinessReadiness

Use of ITUse of IT

Source: Source: INSEAD, INSEAD, Networking Networking Readiness IndexReadiness Index

Less Less DevelopeDevelopedd

And Less CompetitiveAnd Less CompetitiveGROWTH COMPETITIVENESSGROWTH COMPETITIVENESS

Finland 1.USA 2.Sweden 3.….. Estonia 20.Slovenia 32.Czech Rep. 38.Hungary 39.Slovakia 41.Poland 51.……….Bulgaria 58.Croatia 62.Romania 67.Serbia & Mont. 80.Macedonia 85.Bosnia & Herz. 95.Albania 100.

BUSINESS COMPETITIVENESSBUSINESS COMPETITIVENESS

USA 1.Finland 2.Germany 3.……Estonia 26.Czech Rep. 27.Slovenia 32.Hungary 34. Slovakia 39.Poland 42.………Croatia 63.Romania 67.Bulgaria 78.Macedonia 83.Serbia & Mont. 86.Bosnia & Herz. 94.Albania 112.

LEADERSLEADERS

NEW EU NEW EU MEMBERSMEMBERS

SEESEE

Source: Global Competitiveness Report 2005-2006, WEF

SEE Main Focus AreasSEE Main Focus Areas

e-Governmente-GovernmentPublic service, efficiency, Public service, efficiency, transparency, cost reductiontransparency, cost reduction

e-Businesse-BusinessCompetitiveness, SME, innovationCompetitiveness, SME, innovation

e-Inclusione-InclusionEducation, curricula, skillsEducation, curricula, skills

What we can do?What we can do?

SEE E-GOVERNANCE CENTERSEE E-GOVERNANCE CENTER

e-Government policy and institutional capacity e-Government policy and institutional capacity building support through shared expertise, best building support through shared expertise, best practices and standards in public servicespractices and standards in public services

Support for multilateral exchange of IT skills, Support for multilateral exchange of IT skills, competencies and solutionscompetencies and solutions for public administrationfor public administration

Replicate Tallin (Estonia)Replicate Tallin (Estonia) EGC to Bled (Slovenia)EGC to Bled (Slovenia)

e-Governmente-Government

BUSINESS-TECHNOLOGY CENTERSBUSINESS-TECHNOLOGY CENTERS IT entrepreneurship and innovative SMEs IT entrepreneurship and innovative SMEs support through local incubatorssupport through local incubators

Incubator as source of new IT ideas, Incubator as source of new IT ideas, business solutions knowledge base and best business solutions knowledge base and best practice share-pointpractice share-point

BTC Varaždin (Croatia) asBTC Varaždin (Croatia) as model to be replicated model to be replicated throughout the regionthroughout the region

e-Businesse-Business

Multi-stakeholder PartnershipsMulti-stakeholder Partnershipsfor SEEfor SEE

PrivatePrivateSectorSector

InternationalInternationalCommunityCommunity

AcademiaAcademia

GovernmentGovernment

The Global Information Technology Report 2005 – 2006The Global Information Technology Report 2005 – 2006 (World Economic Forum)(World Economic Forum)

European Information Technology Observatory 2006European Information Technology Observatory 2006

The Economic Impact of IT The Economic Impact of IT (IDC)(IDC)

Further ReadingFurther Reading

2005 GLOBAL PC SOFTWARE PIRACY

PIRACY RATES PIRACY LOSSESCountry 2005 2004 2003 2005 $M 2004 $M 2003 $M Bosnia 69% 70% 13$ 12$ Bulgaria 71% 71% 71% 41$ 33$ 26$ Croatia 57% 58% 59% 51$ 50$ 45$ Macedonia 70% 72% 9$ 8$ Romania 72% 74% 73% 111$ 62$ 49$ Serbia/Montenegro81% 81% 104$ 93$ Slovenia 50% 51% 52% 33$ 37$ 32$ TOTAL SEE 67% 68% 64% 362$ 295$ 152$