Internet usage and electronic business development in Kosova

Author:Mihane Berisha-Namani, PhD/Myrvete Badivuku-Pantina, PhD
Position:Assistant Professor/Associate Professor, University of Pristina, Faculty of Economics

Worldwide, more and more companies are using the Internet as a medium for the development of business through electronic means. Internet usage has changed the business process in many companies, whereas electronic business has been accepted as a new form for the realization of digital business transactions, without use of hard copy documents and direct contacts in the business process. While... (see full summary)


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1. Introduction

The growth, integration and sophistication of Communication and Information technology (CIT) is changing the society and the economy, and is impacting that, on the one hand, many industries undergo changes, and on the other hand, new business forms and models are created based on the Internet, as well as the use of information systems and computer newtworks1. New communication and information technologies have changed the traditional business manner, by reflecting the manner of their development, and simultaneously by bringing it closer to the needs, desires and demands of the consumers.

Worldwide, more and more companies are using the Internet not only for communication and provision of information, and for the realization of business with consumers, such business which from the consumer aspect is known as electronic business model B2C (business to costumers), but also for the development of business electronically with other enterprises, by actualizing a business trend known as electronic business between two enterprises or B2B (business to business).

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Taking into account the exponential growth of the number of Internet users, and the great impact of Internet usage in all fields of life, but also in the development of contemporaneous business, and noting that, despite the fact that an increase of the Internet users has also been noted in Kosovo during these last years, but we lack data and research on the usage of such technology in the function of business development, efforts have been made to provide data regarding the Internet usage in such paper, with special emphasis in Kosovo, its role, importance, opportunities and advantages it offers for a successful development of electronic business and increase of work efficiency of business systems.

2. Internet - its Background and its Usage for Business Purposes

Internet is a general term which is used informally to describe a union of related computer networks. As a term, it was introduced for the first time in the 80's of the last century, whereas in the 90's the Internet started to be used by all. The foregoing project was ARPANet (Advanced Research Project Agency Network), which was funded by the Ministry of Defence of the USA (1968), the purpose of which was to find new ways for telecommunication system management, which would have decentralized governance and would enable distribution of information included in the computer. The USA universities joined such network in the 70's, whereas in the 80's the Academic Institutions of Europe. A turnabout on the Internet development and usage is marked in the 90's, when the Internet usage extended from the military and academic institutions to commercial usage. By the establishment of different presenting formats together with their transfer through the Internet, World Wide Web (WWW) was born and necessary preconditions for the Internet impact in the development of business activities were created [Z. Panian, 2005]. Such impact started to to be noticed especially in 1993 when the enterprises started to bring to the Internet the electronic industry through electronic brochures (e-brochure).

The Internet2 created a new space for communication, distribution of data and information and business development, by enabling the introduction of new information finding forms and cooperation between individulas. Although at the beginning nobody knew what such new medium offers, very soon it became one of the main communication and contemporaneous business development medium. The Internet provided the users with the opportunity to have access from around the world, and enabled the exceeding of time and space limitations for communication and business development between business entities, by impacting in the creation of an informative business environment for the enterprises and the introduction of new business forms and models, which were previously unknown.

Under the impact of the communication and information technology, the world economy is experiencing rapid technical, technological and organizational changes. Such changes are, first of all, a result of Internet expansion, which made possible that production, consumption and circulation exceed national borders and increase the ependency level between states. While previous technologies, such as electricity, the telephone technology, vehicle industry etc. required decades to reach the critical usage level, the Internet reached this only within several years. [V. Milicevic, 2002:24]. Currently, millions of people use the Internet through wireless modem equipment, through laptops or mobile telephones for everything: to purchase books, for games, to download music and films [Susanne Hutnner, 2007], but also to carry out business transactions electronically.

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Much estimation on the number of Internet users exist in the world. Acording to Internet World Statistics3 the world Internet users estimate is 1.319.872.109 for year-end 2007, the penetration was 20.0%, based on the world population estimate of 6.606.971.659 persons. World average of Internet users was 20.0%, while in Europe penetrartion was 43.4%.


Based on the same source, the European countries and the countries of the Balkans are characterized by a rapid growth dynamics of the number of Internet users. In 2007 there were 43.4% Internet users in Europe. There is an evident distinction between the Balkan states with regard to Internet usage. Slovenia has made substantial progress in this regard with 62.2% users, followed by Montenegro (38.8%), Croatia (37.5%) and Rumania (31.4%). Albania had the lowest percentage of Internet users with 13.1%. By September 2006, statistics gathered for Serbia as a whole showed 14.3% of the people to be Internet users4.

Very little data are available on Internet access and usage in Kosovo. Since 1999 in Kosovo there has been a rapid expansion of communications technologies and the growing interest in computer and Internet usage. While, in October 1999, just 0.45% of the population in Kosovo was Internet users,5 research carried out by Index Kosova in 2006 show that in Kosovo there were 6.3% computer users, but only 3.5% were Internet users.6 According to UNDP "Human Development Report 2006", although the number of young people with their own computer is till low, most young people know how to use one and some 75% of young people report using the Internet7. These figures accounts for increased awareness on computer and Internet usage in Kosovo, but the figures remain well below the level of the countries in the Balkan region. The main Internet services providers in Kosovo, is IPKONet providing services such as Internet access, data transport and inter-office telephony8.

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3. Electronic Business and its Models

Taking into consideration the increase of the number of Internet users and the many opportunities it provides, its natural to expect that, from the economic aspect, the Internet has become very important. In particular, the opportunities that the Internet provides for the development of business electronically are very important.

Today, it has become a habbit to name the business development through the Internet usage electronic business. By using the expression electronic business, the aim is to show a rapid application of informatics and their products in business during these last 15 years, under which conditions the manner of business development is changing, and many traditional businesses are being transformed into new business forms and models, based on Informatics systems an the Internet. Electronic business was enabled by the Internet development as international network of computer networks and medium for...

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