Turkish economy, despite the recent global and national crisis it has gone though, is still amongst the top twenty developed economies in the world. Much of this success is owed to the Turkish small and medium enterprises (SMEs), which constitute 99.5% of the enterprises and 61.1% of employment in manufacturing sector. In opposition to that, value added by SMEs in the manufacturing sector is limited to 27.3%.

Although the ratios of SMEs in total number of enterprises in manufacturing sector is quite similar in various countries, Turkish SMEs significantly underperform in their stake in investment, export, loan pie, as shown below.

Chart 1. Comparison of SMEs in Various Countries (source: KOSGEB)

However, because of both globalization and recent economic crisis in Turkey, SMEs should both increase their operational efficiency and expand to new markets. An important number of SMEs understand this fact and struggle to overcome their problems of finance, managerial issues, foreign trade and technology. In order to realize this, enterprises need to change their way of doing business, especially employing new information technologies.

At this point, the survey conducted on PC-literate SMEs by ProCon GFK on behalf of Microsoft Turkey in 2000, brings up several points to consider on IT penetration of SMEs;

• The PC penetration is higher in the newly established companies. Maximum PC penetration is in finance and foreign trade sectors.
• 78% of SMEs having PCs have internet access and 84% of them connect through dial-up modems. 56% of SMEs consider getting an internet access in the upcoming year.
• 40% of SMEs have web sites. 94% of SME web sites are used as brochure and 32% are used to deliver service and customer support.
• Only 2% of SMEs use e-commerce presently and 23% plan to use it next year.

The important potential of SMEs explained above has been recognized by many IT companies and financial service providers. However, much of their efforts in reaching this segment has failed, due to the fact that their promotions and campaigns were merely focused on hardware financing, rather than considering customers' expectations.

With an alternative rationale of developing something directly effective to business, Koç Group and Microsoft Turkey have joined efforts to create an e-business platform, a one-stop-shop for content and services serving the needs and expectations of SMEs in Turkey. And thus, Kobiline was established as the first initiative as a whole of content and services in Turkey.

The platform is taken as an evolving model according to the feedback of the target segment and thus divided into various phases. The vision of the first phase, which was launched on June 6th, 2001, was to increase awareness among SMEs about doing business more efficiently and effectively online. In less than one year, as more than twenty thousand SMEs and entrepreneurs joined the platform, Kobiline also became a commercial hub where SMEs products and services are traded globally.