Download the full study reports:
(May 2004, pdf, 1.0 MB)
Qualitative report : Key issues, case studies, conclusions
(Aug. 2004, pdf, 1.3 MB)
Crafts cover a very wide range of activities that do not constitute a marked-off sector in official statistics. The definition applied by the e-Business [email protected] for Craft & Trade (C&T) comprises firms with less than 50 employees from five selected industries: the textile industries, electrical machinery and electronics, transport equipment, wood and furniture, and construction.
C&T is a huge sector in terms of number of companies, employment and value added. Most crafts are rooted in the local economy, and can be considered as the motor of employment in the past decade. Only a small percentage of C&T firms is engaged in international trade.
Among the five selected industries, construction had the highest share of craft employment in the total employment of this sector, with a 73% EU average. In the wood and furniture sectors this relative share was 58%, in the textile industries 51%, and in electronics and electrical machinery only 18%. Productivity, measured as value added at factor cost per person employed, was much lower in crafts than in medium-sized and large enterprises (MLEs): in the construction sector, for example, crafts only reached 71% of MLE productivity (2001 data - Source: Eurostat/DIW).
The e-Business [email protected] cross-sector studies show that small firms in general have taken the first step to go digital and most of them have computers, access to the internet and use the world wide web and e-mail. However, they are still far from digitally integrating their business processes: the “e-” part of these processes tends to be a front-end, customer-facing activity.
In craft firms, computers are mainly used for administration,
and only to a very limited extent in selling or purchasing processes with
preference to the latter. In fact, trading transactions rely very much on personal, long-standing relationships with customers and suppliers.
Furthermore, many craft firms lack not only the critical size but also the investment power needed for adopting e-business. Consequently, in comparison with small companies from other sectors studied by the e-Business [email protected], crafts are lagging behind in the adoption of informa- tion and communication technology (ICT).
The main results of the 2003 e-Business [email protected] survey indicated that:
e-Business Adoption in the C&T sector (2003)
|Website||Sell online||Buy online|
Country data weighted by employment. Size-band data in % of enterprises. EU5 = DE, ES, FR, IT, UK. Micro = 1-9, small = 10-49 employees.
The heterogeneity of the C&T sector implies that e-business developments differ largely across its sub-sectors: In industries which are more familiar with ICT, such as electrical machinery and electronics, the level of e-business usage is high, while in crafts like textile manufacturing and building cleaners this level is low.
As reported by craft firms themselves (2003 e-Business [email protected] survey), the most important reason for not engaging in e-business is that the “company is too small to benefit” (75% of non-users). In comparison, 'only' about 30-45% (depending on the sector) felt that the required technology was either "too expensive" or "too complicated".
Furthermore, just a small fraction (about 4%) of craft firms reported that they had made recruit-ment efforts for people with special IT skills in the twelve months before the survey - across the other sectors studied by the e-Business [email protected] this percentage was, on average, twice as high (9%).
For many craft firms, the critical challenge in the area of e-business is to find the right balance between keeping themselves technologically up-to-date and not overinvesting in complex ICT systems. Comprehensive and highly sophistica-ted use of ICT and e-business may not be economic in many craft firms. However, the non-application of e-business, even in rudimentary forms of web-presence and correspondence with customers and suppliers, may put the C&T sector at a serious disadvantage in the medium term.
Another challenge may stem from the fact that many crafts are part of the supply chain of large enterprises. It is, thus, reasonable to expect that they would feel knock-on effects from the e-business initiatives of their sector's “giants”: Smaller firms would have to adapt to their larger counterparts’ standards - or risk to be out of business.
Since crafts are generally rooted in the local and regional economy, support to their e-business initiatives should also take place at the local and regional level. In this sense, craft chambers or chambers of commerce could take a leading role in promoting the introduction and extension of e-business practices in C&T.
Policy could also seek to further encourage the links between research and craft firms. Specialised research, education and knowledge transfer are needed to assist craft firms in keeping their role as "employment motors" in the knowledge economy. Networks of excellence between public research institutions, craft asso-ciations and craft firms, could act as catalysts in this process.
Last but not least, the construction industry –being the largest employer in Europe- deserves particular attention in e-business policy making. By intervening in areas like shared standards, e-learning, B2A (business-to-administration) appli-cations and legal aspects policy could accelerate the uptake of ICT in construction crafts.