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The review of the processes of the development of Lithuanian knowledge society

Saule Jokubauskiene,
Information Society Development Committee under the jurisdiction of the Government of the Lithuanian Republic
the manager of the Department of EU Affairs and the Distribution of Information.
The review for „Infobalt“ publication



Information and communication technologies (hereafter – ICT) are the powerful factor of economic growth and creation of work places. In our modern world the objective to develop knowledge society, to create global  economy based on knowledge is one of the most important purposes of the policy of information and knowledge society as well as the factor determining the development of the economy of the most developed countries.

One of the priorities of „i2010 – for the encouragement of growth and employment of European information society“[1] is an integrated European information society which would encourage the growth of economy and the creation of work places as well as give preference to better public services and  life quality. 

Technological advance in information society has been especially marked recently; ICT is entering the stage of general adaptation which is radically changing the character of our work, life and communication. Large amount of information becomes available in new different formats and can be delivered independent of place, time as well as applied in accordance with the needs of individuals. In terms of technology digital convergence of communication networks, public information means, services and equipment are in progress.

The main purpose of Lisbon strategy is within 10 years to make the European Union (hereafter EU) into „the most competitive and dynamic economy in the world growing on the ground of knowledge“ quickening technological advance, creating knowledge society, fulfilling necessary economic reforms and reducing social disjuncture. So, the stimulated development of ICT sector and the continuing implementation of the purposes of Lisbon strategy reduce the retardation of the level of economic development of the country from the average of the EU member states.

Economy growth factors are labor power, capital, knowledge and enterprise. The level of the development of all these factors and their usage in economic activity determines the main condition of the long-term balanced development of the economy of the country – the competitiveness of the national economy internationally.

ICT becomes widely used by more and more people. However, at the moment more than a half of EU inhabitants do not use ICT or do not have an access to it.

E. inclusion is an essential factor which helps to seek economic and social advance of the initiative „ i2010 – for the encouragement of growth and employment of European informationsociety“ as well as to implement Lisbon agenda. E. Inclusion is an activity which aim is to create inclusive information society, i.e. information society for everybody[2]. The purpose is to enable all wishful people to take part in information society despite personal and social obstacles.  E. inclusion is necessary seeking social justice and warranting the equality in knowledge society. Because of economic reasons it is also necessary to use the potential of information society comprehensively seeking for higher productivity and reduced social and economic disjuncture. When inclusive information society is eventually created ICT sector will have plenty of market opportunities.

Knowledge economy and e-business 

In knowledge economy ICT usage is very important. Innovativeness in information society depends on suitable infrastructure and ability of inhabitants to use ICT. Internet access and computer competence indexes allow drawing conclusions about the ability of country inhabitants and business companies to use new possibilities.

According to the data of Eurostat in 2007 in Lithuania the intensity of ICT scientific researches and development was 0,9 percent, and this is 6 times less than the average of the EU member states (6,1 percent). The retardation from the average of the EU member states is determined by the fact that an innovation system is fragmentary and insufficiently developed; there is a lack of collaboration between business sector and scientific research organizations; there is inappropriate usage of knowledge and available human potential for the creation of innovations: application, intellectual property. ICT researches should be oriented towards the growing interaction of different technologies. This will encourage the creation of innovations in ICT sector and technological convergence. For the successful usage of the results of ICT research not only innovative technologies, but also innovative business models are necessary. 

In comparison with 2007 in 2008 Lithuanian companies used computers and the Internet more intensively. In accordance with the data of Statistics Department at the beginning of 2008 94,8 percent of the companies of  manufacturing industry and service sector having 10 and more employees used computers (in comparison with 2007 – 90,5 %). At the beginning of 2008 92,7 percent of the companies of  manufacturing industry and service sector used the Internet (in comparison, in 2007 – 88,4%). Small companies having less than 50 employees used computers less (93,4%). Middle-sized companies (from 50 to 250 employees) and big companies (more than 500 employees) used computers at work more actively - respectively 99,5 and 100 percent. In 2008 all big companies, 99,1 percent of middle-sized companies and 91 percent of small companies  used the Internet.

Lithuanian society has a lack of trust in electronic space; it is still perceived as the source of information rather than a place for business operations.

The inhabitants of Lithuania negligibly use the possibilities provided by electronic commerce. At the beginning of 2008 only 4,1 percent of all Lithuanian inhabitants or 7, 1 percent of Internet users bought or ordered goods and services for personal advantage on the Internet.

The comparison of the usage of ICT by companies with the EU member states

It should be noted that Lithuanian companies use ICT less in comparison with the average of the EU member states. In the EU (the average of 27 member states) 93 percent of companies had an access to the Internet, whereas in Lithuania – 89 percent[3]. This index has changed in favor of Lithuania recently. During the appropriate period the number of Lithuanian companies having an access to the Internet increased by 9,9 percent, whereas in the EU member states  – 5,7 percent. 

Source: Eurostat

However, in some indexes of using ICT in business Lithuania lags behind other EU member states. There are few companies in Lithuania having their own Internet websites. In accordance with the data of Eurostat in 2007 48 percent of Lithuanian companies had their own Internet websites, whereas the average of the EU was 63 percent. It shows that companies invest in the development of ICT insufficiently; they look less for the ways of presentation of information about them and new ways of business development.  The main methods of the solution of this problem are the creation and development of electronic business solutions in companies, the encouragement of the motivation of companies to use ICT providing the conditions for the rendering of public electronic services.

Source: Eurostat

The usage of electronic public and administrative services

According to the data of the research ordered by the Information Society Development Committee under the jurisdiction of the Government of the Lithuanian Republic[4] 19,8 percent of Lithuanian inhabitants at the age of 15–74 have applied to public administration institutions per Internet just for once (i.e. visited their Internet websites), 5,5 percent of Lithuanian inhabitants have used electronic public administration services not lower than of the third level. The offering of public services depends on the usage of ICT by government institutions. 

Source: Information Society Development Committee under the jurisdiction of the Government of the Lithuanian Republic

The majority of Lithuanian inhabitants (67,5 percent) visiting Internet websites of public administration institutions look for general information about the institution and its activity; 36,5 percent of inhabitants look for information about public electronic services rendered by the institution; 36 percent of inhabitants look for juridical administrative information; 27, 8 percent of inhabitants give filled in forms or other information necessary for the reception of public electronic service. 

The most relevant electronic services for Lithuanian inhabitants who use the Internet are the following: related to the declaring of income-tax (40,3 percent), job search (31,8 percent), public health service (23,6 percent).

According to the majority of inhabitants the rendering of public and administrative services over the Internet allows to arrange affairs with public administration institutions in more comfortable place (for example, at home or at work), in more comfortable time and to get service quicker than using other means.

In 2007 the Information Society Development Committee under the jurisdiction of the Government of the Lithuanian Republic fulfilled the research of basic public administration services available over the Internet. During the research there were researched 20 basic public services 12 of which are intended for the citizens and 8 for business. During the fulfillment of the research five levels of the transfer of public services into electronic space were evaluated (there were four levels previously). The fifth level of the transfer of public services into electronic space exists when public electronic services are rendered automatically using past registration or data about a service user, thus refusing repeated data input.

During the research it was determined that a general index of the basic public and administrative services available over the Internet in Lithuania is 63,1 percent (for the citizens an average is 51,2 percent, for business – 75 percent). Most developed public electronic services in Lithuania are related to the declaring of income, VAT, corporation tax, job search. Aforesaid services are transferred into electronic space hundred-per-cent.

The development of communications infrastructure

Developing knowledge economy one of the most important tasks is the creation of save communications infrastructure. According to the data of the „Preparing for the digital future of Europe. The review of the middle of i2010 period“ (COM(2008) 199 final) the price of broadband communication in Lithuania in comparison with the EU countries is one of the highest (Lithuania is on the third place according to the price of  broadband communication) and amounts EUR 42 for 1 Mb, whereas the EU average is EUR 33 for 1 Mb.

In accordance with the data of Communications Regulation Service the number of subscribers using broadband communication technologies in the II quarter of 2008 worked out 546,2 thousand and has increased 2,9 percent within the last quarter, and  26,6 percent within a year. The permeability of broadband communication (the number of subscribers for a 100 of inhabitants) in the II quarter of 2008 amounted 16,3 percent.

Source: Communications Regulation Service

The permeability of broadband communication (the number of subscribers for a 100 of inhabitants) including the subscribers who connected with a help of mobile network was 18,7 percent at the end of the  quarter II of 2008.  

The total number of subscribers who connected to the Internet with a help of mobile network, using a computer and paid for Internet services according to payment plans intended for the use of the Internet on a computer (for example, Omni Connect, Vodafone Mobile Connect) was 80,2 thousand on the 30th of April, 2008;  within quarter I it increased 11,6 percent.

According to the data of broadband communication report prepared by the company „Point Topic‘s World“ on the 30th of April, 2007, the permeability of broadband communication changed from 8,9 up to 37,1 connections for a  100 of inhabitants. The biggest permeability of broadband communication in Europe is in Denmark, the Netherlands, Norway, Switzerland, meanwhile the smallest is in Slovakia, Poland, and Romania. According to the data of the company „Point Topic‘s World“ the permeability of broadband communication has mostly increased in Malta (5,8 percent), Greece (5,5 percent), the least -  in Portugal (0,4 percent), the Netherlands (0,4 percent).

Source: Communications Regulation Service of the Lithuanian Republic (on the ground of broadband communication statistics prepared by the company „Point Topic‘s World“)

Following information technologies report of World Economy Forum Lithuania has raised from the 39th to the 33rd place in ICT field[5].

The index used in the report determines the readiness of the countries to use ICT, considering three dimensions: general business, regulation and infrastructure environments ICT; the readiness of inhabitants, business and authority to use ICT; real ICT usage. In this year report special attention is given to innovations.

Lithuania as well as in 2006-2007 has the highest number of mobile telephone users – the second place in the world. According to e. participation index Lithuania is on the 19th place (in 2005 – 68th). E. participation index shows the quality and usefulness of information and services rendered by the government and intended for the involvement of the citizen into public policy. According to e. authority readiness index Lithuania is on the 28th place (in 2005 – 40th). This index including internet websites, telecommunications infrastructure and human resources reveals the readiness of the governments for the possibilities rendered by ICT.

The best ratings of the report fall at Denmark which takes the first place, Sweden (2nd) and Switzerland (3rd). The neighbor Latvia takes 44th place, Estonia is on the 20th place.

Meanwhile in the 13th report of the advance of telecommunications in the market  published by the European Commission  it states that Denmark, Finland, the Netherlands and Sweden  have the lead in the world according to the implementation of broadband communication: at the end of 2007 the extent of the penetration of broadband communication in these countries exceeded 30%[6].

In July of 2007 in above mentioned EU countries, UK, Belgium, Luxemburg and France the penetration of broadband communication was higher than in the USA (22,1%). In the telecommunication market report of the Commission it is stated that 8 EU member states overtake the USA according to the penetration of broadband communication.

In 2007 the EU built 19 millions of new broadband communication lines. That is to say, every day more than 50 000 households connected to the broadband communication network. Income in broadband communication sector worked out 62 billions EUR, whereas the total extent of penetration in Europe amounted 20%.

 „The aim of European regulation model is to increase competition in telecommunication market what helps to benefit, – stated responsible for telecommunications member of the EU Commission Viviane Reding. – However, there are still unresolved problems in this field. Firstly, in the sector of the access to fixed-line telephone network competition is not high: 86,5% of clients get this service using the infrastructure of historical operators. Secondly, although there are no borders for telecommunication technologies the main EU telecommunication companies get just 30% of all their income from their activity in foreign markets. It shows that we have not created a common market which would be attractive to companies to work and render services in Europe. So, we should make shift to reduce regulation differences in Europe.  Only when Europe opens a common market for companies it will become competitive, and consumers will be able to choose more different services at acceptable price.“

The assistance of structural funds for the development of information society

When in 2004 Lithuania became the member state of the EU it gained possibility to use financial assistance provided by structural funds of the EU. One of the fields of this financial assistance is the development of information society.

The main purpose of BPD 3.3 means is to provide necessary conditions for the development of information society which encourages the development and growth of economy as well as the switch to knowledge society the members of which have an opportunity to use modern means of information and telecommunication technologies in all fields of their lives. 

Information society development under the jurisdiction of the Government of the Lithuanian Republic, implementing the means BPD 3.3 „The development of information technologies services and infrastructure“, bankrolled from the structural funds of the EU 42 projects according to 3 fields of activity: electronic authority and electronic services, electronic infrastructure and the preparation of projects documentation. Common value of agreements (i.e. financing from the structural funds of the EU and the contribution of project executors) works out LTL 258 million. Projects according to BPD 3.3 means could be implemented only by public sector institutions.

After the implementation of 14 projects of electronic authority and electronic services the purpose is to allow all inhabitants and business companies of the country to use information technologies communicating with authority institutions and to get their services and information over the Internet. The value of these projects works out 53 percent from the total value of the agreements of BPD 3.3 means.

5 electronic infrastructure projects will contribute to the even development of electronic communication in the country, to the development of broadband data transfer network, to the warrant of the access to the Internet in villages, to the guaranteeing of the safety of the electronic infrastructure of public sector on purpose to solve actual problems of digital disjuncture and safety of information technologies in Lithuania. The value of these projects works out 46 percent from the total value of the agreements of BPD 3.3 means.

In 2007 23 projects intended for the preparation of projects documentation were completed. There was prepared facility study for the projects planned to implement with a help of 2007-2013 EU structural funds. The total value of these projects works 1 percent from the value of the agreements of BPD 3.3 means.


Basing on the review of „ Preparing for the digital future of Europe. The review of the middle of i2010 period“[7] it is possible to state that digital convergence is realty and that the Internet is a substantial remedy of economy and our daily life.  Broadband communication becomes a standard mean of communication. The content of the Internet is expeditiously developed.

When society ages it is necessary to give more attention to the improvement of seniors’ skills and their competence. Analysts also encourage increasing investment to scientific researches and development, to encourage the integration of high schools, research companies and institutions   to European and global research networks.  It is also offered to prepare for negative economic and social results of a senescent society.

In summary it is possible to state that the extent of using computers and the Internet in Lithuania is increasing.  Comparing the indicator of people permanently using the Internet in Lithuania and the EU it is possible to mark the reduction of differences. The main ICT users are youth and city dwellers. The indicators of the usage of computers and the Internet by Lithuanian companies lag behind the EU. It should be noted that the number of subscribers using broadband communication technologies is increasing. In Lithuania more information and services are rendered with a help of mobile networks and mobile phones. At the moment few public services are rendered on a high possible interactive level. Such a situation could be influenced by a low level of using public electronic services by the citizens and companies.

The assistance of the EU structural funds for the development of information society is significant. Investment into the development of information society will influence the growing number of Lithuanian citizens using ICT, reduce digital disjuncture, encourages economy which will base on new technologies. Underlying fields to which special attention will be given are electronic infrastructures, the development of electronic content and public electronic services.

[1] COM(2005) 229

[2] COM(2007) 694

[3] Lithuanian information society development in 2007-2008 report

[4] Data source: the research of “The evaluation of electronic authority indexes” fulfilled by the Information Society Development Committee under the jurisdiction of the Government of the Lithuanian Republic under the order of „TNS Gallup“



[7] COM (2008) 199


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