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Towards a taxonomy for regulatory issues in a digital business ecosystem in the EU

Journal of Information Technology

Abstract

This article addresses the role of trust and regulation where small and medium-sized enterprises (SMEs) in the European Union (EU) make use of e-business in a digital business ecosystem (DBE). We argue that in order for digital business to develop among entrepreneurs in the EU and within different industry sectors and geographical locations, trust and regulation are of critical importance. The article assesses the importance of this argument and focuses on the interplay of regulatory and trust-based issues that need to be accommodated before one can expect SMEs to engage in e-business supported within a DBE environment. It then presents a taxonomy that addresses key regulatory issues and fosters trust. The article proposes the taxonomy as the vehicle for the simplification of a bewildering array of laws, standards, norms and expectations, as well as for the elimination of regulatory overlap and conflict. The contribution of the taxonomy is demonstrated in the last section of the article, where it is empirically tested and applied to SMEs which participated in the EU-funded DBE project.

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Notes

  1. The DBE Project was a 3-year, €14 million pan-European project, involving 120 researchers and specialists from 20 organisations, supported by the European Commission's 6th Framework Programme for research and development in information society technologies. See the project website: http://www.digital-ecosystem.org/.

  2. A knowledge base of regulatory issues refers to the baseline understanding of the policy and regulatory domain within which the DBE is being conceptualised, created and implemented. This foundation is intended to provide fundamental perspectives on a range of issues that have been identified in the literature as essential factors for establishing trust relationships in e-business settings, and specifically for small and medium-sized enterprises (SMEs) in the EU.

  3. The notion of ‘knowledge’ is proposed instead of that of ‘information’, as the aim is not to create an online database or information repository of regulatory issues of importance for SMEs participating in the DBE. Rather, the aim is to reflect on and represent matters of concern to SMEs through providing a regulatory framework which will be a ‘living’, evolving and adjustable object over time. Hence, we aim at problematising issues of regulation by providing a reflective framework of them.

  4. We draw the working definition of taxonomy from an approach adopted by the ALIVE project on legal issues for virtual organisations (IST 2000-25459): ‘[A] taxonomy should be regarded as a quest, setting out the boundaries of the main research subject and providing a preliminary framework of guidelines for an in-depth analysis of the [regulatory] issues related to the [project]. The taxonomy… initiates further research by… pointing out the most problematic legal questions, clarifying and illustrating the significance of certain [regulatory] issues. The taxonomy does not present [regulatory or legal] solutions to these issues’ (Schoubroeck et al., 2001a).

  5. For the full interview guide, see Appendix C.

  6. Nemein deals with Java-based enterprise information systems integration and it is located in Finland. Company website: http://www.nemein.com.

  7. Integratum deals with Java-based enterprise information systems integration and it is located in Finland. Company website: http://www.integratum.fi/.

  8. Barrabes deals with consultancy and e-commerce in the tourist sector and it is located in the region of Aragon in Spain. Company website: http://www.barrabes.biz/.

  9. Gabilos deals with management software in the tourist sector and it is located in the region of Aragon in Spain. Company website: http://www.gabilos.com.

  10. Openscape deals with web design and consultancy and it is located in West Midlands, in the UK. Company website: http://www.Openscape.co.uk.

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Acknowledgements

The authors wish to thank the Media Lab at the Department of Media and Communications and the Information Systems and Innovation Group, both at the London School of Economics for their support in the research work completed by the authors within the framework of the Digital Business Ecosystem (DBE) Project in FP-6 EU, project task WP32-B11. The authors are particularly grateful to Paolo Dini, Gordon Gow and Robin Mansell for their continuous support and guidance over the course of the research.

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Correspondence to Panayiota Tsatsou.

Appendices

Appendix A

See Table A1.

Appendix B

Background on interviewed SME drivers

West Midlands: Pollard, Openscape, and Redenet

The three interviewees in the West Midlands were selected on the basis of their long engagement with the DBE. At least two of them, Pollard and Openscape, were generally concerned about the present and future of the DBE. Moreover, the interviewees in the West Midlands represent a spectrum of business domains, covering the areas of online accounting, e-commerce and web design and consultancy. Hence, they give to the task the opportunity to identify regulatory issues of concern at various levels of engagement and in different business domains, allowing the articulation of arguments regarding the sector-specific dimension of the aspired Knowledge Base of Regulatory Issues.

Finland: Nemein and Integratum

The Drivers in Finland constitute a rather different usage scenario from the one in the West Midlands. More specifically, both Drivers in Finland belong to the same business sector, developing activities in Java-based enterprise information systems integration, while they constitute active contributors towards the technical implementation of the DBE platform. More specifically, they both have undertaken the following integration projects within the DBE:

  • Nemein work and position within the DBE:

    • Integrating the Open PSA project management system into the DBE framework.

    • Enabling companies to share project information and expense reports automatically with their partners and contractors.

  • Integratum work and position within the DBE:

    • Integrating CentraView OSS CRM system to DBE Framework and implement a service that allows users to import and export CentraView

    • Contact data.

    • Importing and exporting contact data using XML files.

Hence, the Drivers in Finland allow the task to proceed to a comparative analysis of the initial identification of sector-specific and local implementation regulatory issues, reflecting on the generic level taxonomy.

Aragon: Barrabes and Gabilos

The Spanish Drivers constitute centralised business networks, where ITA (Regional Catalyst) is at the epicentre controlling them. In Aragon, all engaged Drivers belong to one sector, the tourist sector, and carry out diverse programmes that cover the management of the SMEs and, in particular, the management of rural tourism, the management of hotels, accounting, turnover, payrolls, boards of repayment, accounting general plan, and so on.

Although both interviewed Drivers belong to the same business sector, their business activities vary, with Barrabes being a regional influencer and a famous example of a successful IT SME in the area developing activities in e-commerce and consultancy in the tourist sector, while Gabilos develop management software for other SMEs in the same sector. More specifically:

  • Barrabes:

    • E-commerce industry.

    • Consultancy, dedicated to help Spanish companies develop their businesses around the world.

    • Communication link between IT developers and tourism businesses.

  • Gabilos:

    • Software programs that cover the management of the SMEs, such as management of rural tourism, management of hotels, accounting, turnover, payrolls, boards of repayment, accounting general plan, etc.

Hence, the interviews in Aragon allow the task to approach regulatory issues in accordance with the views of Drivers attempting to boost business within the DBE platform, offering thus a different perspective of sector-specific and local implementation issues while reflecting, validating and/or updating the generic level taxonomy with the issues.

Appendix C

Interview topic guide

A. Background questions: company profile and current business situation

  • Core business activities

  • History of activities in a digital collaborative environment

  • Current opportunities and challenges that the company is facing

  • Business collaboration across Europe: level, types of collaborative activities and regions where collaboration takes place

B. Regulatory concerns and legal issues raised by theory

  • Privacy & Consumer protection at the level of Tryst types X, Y and Z, and across varying Operational Perspectives (within diverse DBE relationships, for different DBE actors and with different software life cycles)

  • E-signatures and authentication at the level of Tryst types X, Y and Z, and across varying Operational Perspectives (within diverse DBE relationships, for different DBE actors and with different software life cycles)

  • Jurisdiction and consumer protection at the level of Tryst types X, Y and Z, and across varying Operational Perspectives (within diverse DBE relationships, for different DBE actors and with different software life cycles)

C. Regulatory concerns and legal issues raised by current business practices

  • Open discussion where other legal issues might be raised by the interviewees, such as business competition, conduct and liability rules, intellectual property vs freedom of knowledge, confidentiality/sharing of information, copyright, exploitation rights, digital right management, etc.

D. Underlying factors influencing Drivers’ concerns

  • What are the main factors affecting the company in how it deals with the above regulatory issues?

  • What is the role that the particular business sector plays in this respect?

  • Whether and to what extent the local factor influences accordingly

E. Challenges for the DBE

  • How do the interviewees anticipate that the DBE might deal with the above regulatory concerns?

  • Proposals, suggestions and further remarks from the interviewees regarding the regulatory provisions of the DBE

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Tsatsou, P., Elaluf-Calderwood, S. & Liebenau, J. Towards a taxonomy for regulatory issues in a digital business ecosystem in the EU. J Inf Technol 25, 288–307 (2010). https://doi.org/10.1057/jit.2009.22

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