The advance of IT is a powerful force of economic developments. The developing countries perceive IT as an opening to achieve access to knowledge and services. The internet is one of the IT parts that bring value added for organizations as well as for whole economy. Even though internet was created as a medium to distribute information, it became an instrument for the organisations to promote and sell their services and products around the world. It was initiated an exploratory research in order to determine the state of IT within the Romanian organizations and its impact for the Romanian economy, making an allowance for the fact of considering as starting point the idea that between IT and economical development is a positive relation, and that IT development requires and generates high skilled educated labour,. Mainly, the targeted companies were SMEs.Competitiveness, development, IT, management, SME

Camelia Ioana Ucenic

Laura Bacali

English

Research Papers in Economics

6th International DAAAM Baltic Conference 
"INDUSTRIAL ENGINEERING” 
24-26 April 2008, Tallinn, Estonia 
 
THE IMPACT OF IT ADVANCE OF SMES’ FOR THE ROMANIAN ECONOMY 
 
Ucenic C.I., Bacali L. 
 
The advance of IT is a powerful force of 
economic developments. The developing 
countries perceive IT as an opening to 
achieve access to knowledge and services. 
The internet is one of the IT parts that 
bring value added for organizations as 
well as for whole economy. Even though 
internet was created as a medium to 
distribute information, it became an 
instrument for the organisations to 
promote and sell their services and 
products around the world.  
It was initiated an exploratory research in 
order to determine the state of IT within 
the Romanian organizations and its impact 
for the Romanian economy, making an 
allowance for the fact of considering as 
starting point the idea that between IT and 
economical development is a positive 
relation, and that IT development requires 
and generates high skilled educated 
labour,. Mainly, the targeted companies 
were SMEs. 
Key words: Competitiveness, development, 
IT, management, SME 
 
1. INTRODUCTION  
 
One of the powerful forces of economic 
development is the advance of IT. The 
developing countries perceive IT as an 
opening to achieve access to knowledge 
and services. The internet is one of the IT 
parts that bring value added for 
organizations as well as for whole 
economy. [
1] 
Even though it was created as a medium to 
distribute information, it became an 
instrument for the organisations to promote 
and sell their services and products around 
the world. Even conventional technologies 
are undergoing considerable 
transformations due to information 
technology applied in manufacturing 
process, product developing and e-
commerce. 
 It was initiated an exploratory research in 
order to determine the state of IT within 
the Romanian organizations and its impact 
for the Romanian economy. It was made an 
allowance for the fact of considering as 
starting point the idea that between IT and 
economical development is a positive 
relation, and that IT development requires 
and generates high skilled educated labour. 
Targeted companies were SMEs. 
 
2. FRAMEWORK OF ROMANIAN 
ECONOMIC DEVELOPMENT 
 
The Romanian economy was in transition 
after the events from December 1989. Its 
economic development has been 
constrained by the centralized economy 
inherited from the former communist 
regime.  
The government had played a fundamental 
role in the creation of a framework for the 
structural and systemic changes needed to 
promote economic reforms. A set of 
economic reforms was issued.  The major 
accent was on the privatization and 
restructuring of the economic system.  
The government made great efforts for the 
approach of a market economy. 
Unfortunately, only few reforms had 
effective results. This fact created a 
downward spiral of events that led to 
economic backup by 1997.  
Legal reform had a slow pace also. 
Business units from the private sector were 
in very different conditions and did not 
exist a unique set of recommendations 
applies to all. The reform of large state companies took 
place very slow, generating the increase of 
losses. Energy-intensive companies 
continued to function uneconomically, 
while the government falsely held the price 
of energy low, in this manner moving 
economic troubles to upstream industries. 
Labor-intensive industries created demands 
for subsidies and direct credits from the 
State budget.  
In spite of this contradictory development, 
all measures and restructuring underlined 
their target to increase the pace of reforms 
and to assure EU accession in 2007.  
Although it is a country with a large 
population in Balkans, Romania shared the 
same institutional problems of the 
Southeast Europe region. Despite the fact 
that the country ranked at a good position 
in the human resources, the infrastructure 
and the investment indicators, it had an 
unsatisfactory economic and financial 
performance ranking.  
Competitiveness also requires the ability to 
cooperate as a cluster. It depends on the 
capability to form strong alliances and 
partnerships. At the industry level, business 
associations can participate in efforts 
representing business sector before 
government.  
The Romanian companies with a long 
tradition and exportable products and 
services have to exploit the new 
opportunities from European markets. The 
organizations that do not have tradable 
products and services for international 
markets and which supply only the national 
market, can investigate the trends in 
bordering countries with greater 
experience. 
 
3. INTERNET 
 
In three years the Net evolved into a very 
large communication and trading centre 
with more than 90 million people. It was 
one of the technologies with the fastest 
development. It took more than 30 years 
for the radio to reach 60 million people and 
for television 15 years. 
The companies have the opportunity to 
create completely new businesses and to 
exploit markets that never could have 
reached before. The Net deconstructs the 
fundamental nature of business 
transactions. The traditional roles of 
manufacturers, suppliers and distributors 
changed because the links in the supply 
chain are wired. It became easier to deal 
with multiple suppliers in real time and 
compare products, qualities, prices, 
services. Many theoretical benefits have 
been identified such as promotion of 
information flow, market transparency, and 
price discovery, facilitation of industry 
coordination and reduction or elimination 
of transaction costs. [
6] 
Internet is an almost pure manifestation of 
marketing principals and practices. In this 
environment is possible: 
- organizations with different sizes to 
compete in more equal terms; 
- allows to a firm to open direct 
channels of communication with its 
customers; 
- the success of a site is not always 
directly proportional with the amount 
of money spent on design it, in 
comparison with the success of 
advertising campaigns. [
13] 
In internet the firms of all sizes are more 
equal in the competition for consumers 
because the pages that comprise company’s 
site can be available to the same segment 
of consumers as another firm’s site, 
without significant additional expenditure. 
New approaches to sale and market are 
evolving. It is important to discover what 
type of person use this way, which is the 
current profile of a typical internet user. [
7] 
Internet represents a significant new 
opportunity for a company to distribute its 
products and services direct to consumers. 
The web pages are used for major tasks as 
attracting new customers via marketing and 
advertising, developing new information 
based products, serving the existing clients 
via customer service and support function, 
developing new markets and distribution. According with [
8], the use of the new 
technology will serve for the provider for 
lowering costs and increase productivity, 
improving the way the service is delivered, 
customizing the service, collecting data on 
customer needs and build relationship with 
customers. 
The important point is how should a 
company markets its products to 
consumers via internet. [
3]. It appears to be 
a lack of established methodologies for 
successful internet marketing. Different 
researchers suggested some general criteria 
in order to evaluate web site effectiveness. 
Some of these are: number of hits and time 
spent, number of visitors, interactivity and 
feedback, regular updating. 
The internet nature is interactive, spaceless 
and timeless. Consequently, the services 
and products are marketed differently than 
the conventional way. In many cases 
internet was not only another medium, it 
became the main medium for an 
organization’s operation. There are some 
companies which perform their business 
only by internet [
9] 
The marketing on the internet is termed as 
“cyber-marketing”.  Cyber-marketing was 
defined as the set of actions, tools and 
techniques implemented by an organization 
to promote the growth of its commercial 
activities using the internet. [
5] In addition, 
internet facilitated electronic commerce – 
“ecommerce” with business values such as 
direct savings, new sales channel, and time 
to market, customer service, customer 
relations and brand image [
2]. 
The growth of internet users and web sites 
generated an increase of internet providers, 
intensifying competition and decreased 
prices. [
10] 
 
4.  INTERNET, E-COMMERCE AND 
M-COMMERCE IN ROMANIA 
 
After 1989, Romania began to evolve 
toward a market economy. Many changes 
and positive evolutions could be observed 
in different areas. One of the most 
important steps was realized in the 
information and media development, as an 
explosive opening to the world, and 
corresponding IT shortcuts. The growth of 
internet started to be visible after 1995. 
Unfortunate the rhythm of the growth is 
not big enough comparing with other 
European countries.  
The number of internet users is very small 
comparing with that one from Western 
Europe. It is one of the lowest numbers 
counted in Central and Eastern European 
countries. Romania has 23 millions 
inhabitants.  
0
1000000
2000000
3000000
4000000
5000000
6000000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Fig.1 Evolution of the number of internet 
users (Source: [
12]) 
 
The costs of internet access are still higher 
for Romanians. The costs are usually 
combined with the phone line fees and are 
prohibited for an average family. 
Telecommunication costs are between the 
biggest in Eastern Europe. Until the end of 
2002 the market was a monopoly. 
Nowadays the regulations which protected 
the monopoly expired and the market is 
open for competition. [
4] 
 
5. THE STATE OF ROMANIAN SMEs’ 
 
The figures that are presented bellow 
regarding the state of Romanian SMEs’ in 
2006 as well as other information about 
entrepreneurship are based on the Annually 
Report regarding the State of SMEs’, 
published in 2007 by the Ministry for 
SMEs, Minister for Development and 
Phare Program for Technical Assistance in 
Developing SMEs’ – “Being Competitive”.  The year 2006 registered the biggest 
number of active SME, with an increase of 
11.2% in comparison with 2000. The total 
number of active SMEs was 463504 – 
88.62% micro-enterprises, 9.37% small 
enterprises and 2.01 % medium enterprises. 
(Source: [
15]) 
The big percentage of micro-enterprises is 
due to the fact that they are the first step of 
an entrepreneur, but is also the result of a 
set of institutional, legal and fiscal factors. 
For example, the tax is only 1.5%-2% from 
the turn-over, while for the other firms is 
16%. The structure of Romanian SMEs’ is 
services 77.47%, industry and energy 
12.27%, construction 7.5%, agriculture 
2.77%. 
Romania is behind other countries from 
East and center of Europe from the point of 
view of two main indices: the weight of 
research and development in PIB (ex. 0.4% 
in Romania, 0.5% in Bulgaria) and the 
penetration rate of internet in households 
(ex. 30% in Romania, 17% in Bulgaria). In 
the same time, there are great differences 
regarding the access at ITC and its usage in 
the Romanian companies.  
The gap between the usage of ITC between 
the Romanian SMEs’ and Romanian big 
companies is bigger than the gap between 
Romanian big companies and the European 
ones.  
 
6. METHOD AND RESULTS  
 
An Exploratory research was carried out in 
order to evaluate the state of IT in 
Romanian SMEs’. The survey had more 
than 40 questions. There are presented only 
some of them. The aim of exploratory 
research is to offer information for the set-
up of an international project proposal in 
the FP7, in order to improve the level and 
results of IT implementation in SMEs’. 
  
Q1. Do you consider that IT is a condition 
for the market competitiveness of your 
organization? 
 
Fig. 2. IT as condition for competitiveness 
 
Q2. Do you appreciate that the 
organization invested in information 
technology? 
 
Fig. 3 Opinion about investment in IT 
 
In spite of the fact that more than 60% 
considered IT as a condition for 
competitiveness, only 18% of the firms 
have great investment in it. 
 
Q3. How many persons are exclusively 
employed in IT in your organization?  
 
Fig.4 Number of persons employed in IT 
 
The great percentage of the companies 
which do not have any person employed 
exclusively in IT is a weak point for 
Romanian organizations. These activities 
are supported by persons that have other 
tasks and are not so interested in the IT 
development. 
 Q4. Are developed electronic marketing 
activities in your organization? 
 
Fig.5 The development of e-activities 
 
The e-activities are not developed in a 
quarter of Romanian firms, only two thirds 
of them having a constant activity in this 
field. More than a quarter from the 
interviewed persons could not tell anything 
about the types of e-activities from their 
companies. The most common electronic 
activity is market research.  
 
Q5. Which are those activities? 
 
Fig.6 The types of developed e-activities  
 
Q6. Does your organization use ICT in the 
process approach for reaching a maximum 
productivity (if the case)?  
 
Fig.7 ITC for increasing productivity 
 
The lack of knowledge about using ITC in 
order to increase productivity is proved by 
the big percentage of those who did not 
answer at the question – 64%.  Only 10% 
are using it. The same situation can be 
observed about re-engineering, 64% do not 
use ITC and 18% do not answer. 
 
Q7. Did your organization use ICT for the 
re-engineering process (if the case)?  
 
Fig 8 Using ITC for re-engineering 
 
Q8. Is it concerned your organization about 
developing a sustainable development 
attitude?  
 
Fig. 9 ITC& sustainable development 
 
The fact that more than a half of 
organizations are interested in sustainable 
development is a very good aspect. A 
quarter of firms uses ITC in order to assure 
sustainability.  
 
7. ADDITIONAL DATA ABOUT 
AUTHORS 
 
a. Camelia Ioana UCENIC 
Doctor in Industrial Engineering 
Associate Professor 
Full Address:  
Technical University Cluj Napoca 
Faculty of Machine Building 
Department of Management and Industrial 
Systems 
Muncii Boulevard 103-105 
Cluj Napoca, County Cluj 
www.utcluj.ro  
E-mail: cameliaucenic@yahoo.com 
Phone: +40-740-585074 
 b. Laura BACALI 
Doctor in Industrial Engineering 
Professor 
Faculty of Machine Building 
Department of Management and Industrial 
Systems 
Muncii Boulevard 103-105 
Cluj Napoca, County Cluj 
www.utcluj.ro  
E-mail: laurabacali@gmail.com 
 
8. CONCLUSION 
 
The Romanian SMEs’ understood the 
necessity of ITC development and 
implementation in order to assure business 
sustainable development. Entrepreneurs are 
conscious about the poor state of it in 
comparison with other European 
companies. 
The results of this empirical research 
demonstrate once more time the gap 
between Romanian SMEs’ and European 
ones. It is necessary to invest more in ITC 
as well as in the human resource employed 
in this field.  
The development of e-activities represents 
a priority for our firms. They have to use 
this way in order to increase their market 
access and to diminish the negative effects 
of budget constrains and less funds. [
11] 
The re-engineering and the increase of 
productivity are domains where ITC has to 
be more implemented.   
Further research has to be done in order to 
provide reliable information for long run 
strategies for sustainable development. The 
researchers and entrepreneur have to 
concentrate for it. 
The main goal of this empirical research 
was to offer the basis for a comparison and 
a common approach about ITC between 
researchers, entrepreneurs and their 
colleagues from European countries.  
 
9. ACKNOWLEDGEMENT 
 
The authors are grateful for financial 
support from the Mary Curie Transfer of 
Knowledge of the European Communities 
6
th Framework Program under contract 
MTKD-CT-014288 and Romanian 
Program PN II – Partnership.  
 
10. REFERENCES 
 
1. Bako M. The APC European Internet 
Rights Project, 2001 
2. Bernolak, I. Effective measurement and 
successful elements of company 
productivity: the basis of competitiveness 
and world prosperity, International Journal 
of Production Economics, 203-213 
3. Dahlman C.– Technology, Development 
and the role of the World Bank, Human 
Capital Development and Operations 
Policy, HCO working papers, 2002 
4. Jalobeanu M. – The internet presence in 
Romania, Western University “Vasile 
Goldis”, Romania 
5. Kagan A. The Electronic Information 
Gap,  Social Responsibilities Discussion 
Group Paper, Amsterdam, 1998 
6. Kobrin S.J. Economic Governance in an 
Electronically Networked Global Economy 
– Globalization and International 
Business, Oxford University Press 1997 
7. Kobrin S.J.Development After 
Industrialization: Poor Countries in an 
Electronically Integrated Global Economy, 
London, MacMillian 1999 
8. Leroux N., Dominant factors impacting 
the development of B2B e-commerce in 
agriculture, IAMA Symposium, 2001 
9. Porter, M. - Strategy and the Internet, 
Harvard Business Review. 79(2): 63-78., 
2001 
10. Schniederjans M.J., Cao Q. E-
commerce Operations Management, World 
Scientific Publishing Co. Pte. Ltd, 2002 
11. Ucenic C., New Management and 
Marketing Patterns Concerning the 
Investigation of Business Environment 
Evolution, Cluj Napoca, 2007  
12. *** - www.emarketer.com (03.2008) 
13. *** - www.imt.gr (01.2008) 
14. *** - www.internetworldstat.com 
15. *** - www.insse.ro (03.2008) 
 

Development and the role of the World Bank, Human Capital Development and Operations Policy, HCO working papers,

Dominant factors impacting the development of B2B e-commerce in agriculture, IAMA Symposium,

Ecommerce Operations Management, World Scientific Publishing Co.

Economic Governance in an Electronically Networked Global Economy – Globalization and International Business,

Effective measurement and successful elements of company productivity: the basis of competitiveness and world prosperity,

Kobrin S.J.Development After Industrialization: Poor Countries in an Electronically Integrated Global

New Management and Marketing Patterns Concerning the Investigation of Business Environment Evolution, Cluj Napoca,

THE IMPACT OF IT ADVANCE OF SMES� FOR THE ROMANIAN ECONOMY

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics