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EU Funding Helps 'Microfirms' Take advantage of Broadband and Business Networking

March 23, 2005

Help for Microfirms - companies with less than 10 employees - to take advantage of the opportunities of broadband and business networking is now available thanks to a grant of 1.4 million euros from the EU's Framework Programme.

Many believe these Microfirms are the mainstay of the new economy as they now account for 93 per cent of Europe's 20 million-plus companies. However, they also suffer from a number of specific problems - considerable time pressures, higher unit costs and they usually have less access to advice, information and support. This is why they account for less than 20 per cent of total sales within their local economy.

So, with funding through the Information Society Technologies thematic area, the 'NEWTIME' project was tasked with helping them to learn more about the benefits of broadband and business networking.

"There is a huge variation in the way broadband is deployed in small-business communities across Europe", says project co-ordinator Professor Colin Gray, from the Open University. "For example, broadband is generally available in Denmark but is both rare and difficult to obtain in Sicily.

"So, we worked with a variety of business groups across Europe, including business associations, clusters, joint projects and supply chains. This enabled us to establish relationships both with formal entities - such as chambers of commerce - as well as informal groups working within the same business areas."

NEWTIME aimed to help the busy entrepreneurs and microfirm owners in at least three practical ways:
·Provide a source of reliable advice, support and training on business development and ICT applications.

·Offer clear business support strategies, using case studies to show the benefits of communications technologies in supporting business and local development.

·Supply clear information society guidelines, backed by case notes on working, practical examples on how to engage effectively and with minimum disruption in the emerging information society.

"These microfirms tend to be highly dynamic and are usually able to call on an established support network of other microfirms and individual professionals", added Colin Gray. "This enables them to react quickly to changing economic cycles. So, we trained mentors to visit these groups and help them explore the benefits of more powerful communications and then watched what happened when they stepped up their provision of connectivity.

The project partners also discovered considerable differences in the amount of time and effort required to deal with the service providers - a crucial factor for the managers of small businesses where time costs can be critical.

One case perfectly illustrates the type of obstacles small firms have to overcome - especially if they are based in remote, rural areas. In the most south-westerly town in Britain, St Just in Cornwall, the dominant carrier was unwilling to provide broadband because of insufficient interest - less than 350 potential subscribers. Public meetings, protests and petitions had no effect despite that fact that Cornwall's geographic location means that it is a long-established route for international fibre-optic cables connecting to countries such as the US, France and Spain.

So, a specialised local community activist group contacted a secondary carrier and they were able to connect to a 'break out point' on one of the international fibre-optic cables. They were also able to recoup 75 per cent of the cost under a UK government fund for implementing broadband for SMEs.

"With small firms contributing so much to our local and regional economies it is vital that they are able to fully exploit the opportunities offered by broadband communications", says Peter Walters, FP6UK's National Contact Point for Information Society Technologies. "By providing R&D funding to this type of project we are safeguarding our economic future.

"The Framework Programmes are the EU's main vehicle for support of leading edge, internationally collaborative R&D. The current Framework Programme (FP6) runs until 2006 and organisations wanting free information on how to access some of the EUR19bn available should log on to http://fp6uk.ost.gov.uk or call central telephone support on 0870 600 6080."


Glasgows