In June 1995, the Competitiveness Advisory Group report was issued. Entitled " Enhancing European Competitiveness ", it strongly encouraged new schemes which will permit to shorten the way between supplier and user of information. The group proposed the creation of facilitators to meet this need: the "Knowledge Resource Centres".

On this basis, the Commission has launched several studies. Networking has been identified as a structuring mechanism which could guarantee access to resources for the economic actors of the European industry, make the flow of information and knowledge more operational, and offer an infrastructure including its added value services, thus ensuring synergy and continuity in activities undertaken by companies.

Following this investigation phase, the Commission has focused on the identification of a sequence of practical and operational steps which would structure its support actions as a catalyst of industrial transformation. As an operational contribution to the Commissions’ analysis of the industrial dimension of the Information Society, the Commission has decided to carry out an Initiative aimed at making managers of European industry aware of the industrial aspects of the information society and to facilitate their analysis in defining their company strategy in this new global environment, where competitiveness is at stake.

In a first phase, started in June 1997, the principles and modalities of the Initiative have been defined. A process of internal validation within the European Commission has been engaged.

In a second phase, an external validation has been conducted: the Initiative has been presented and tested towards intermediaries, practitioners and business community members through seminars in order to collect reactions and suggestions: France in March 1998, Scotland in June 1998, Bremen in September 1998.

This process of consultation, the commissioning of dedicated research and the holding of seminars have led to the conclusion by DGIII and DG XIII that there is an insufficient penetration of networks in the industrial sector, there are important territorial and sectoral disparities and great diversity in the quality of networks.

Following this, a reference document has been issued to better define the KRN profile as well as different steps for the implementation of the initiative.

In the framework of the PROMISE programme (Council decision adopting a multiannual Community programme to stimulate the establishment of the Information Society in Europe), the European Commission has decided to launch in August 1998 the Epsilon Initiative to address these barriers and promote SME integration in the emerging ‘Information Society Economy’. Thus, the present phase consists of the concrete implementation of Networks through the launching of 15 pilot projects in 8 Member States. It is coordinated and supported by an "Umbrella Structure". The tasks of the umbrella structure focus on the integration of the two initiatives and their individual projects to maximise the value-added of European funding and promote the development of a European dimension.

This initiative build upon the notion of ‘Knowledge Resource Centres’ and networks (‘KRNs’) to shorten the path between information supplier and user, promote education and learning and disseminate best practice. KRNs can be defined as a networking of ‘resource centres’, structured according to vertical (customer-supplier), horizontal (trade sector, professional body) and geographical or spatial patterns of integration.

The projects have two main objectives:

• Establishing EU wide co-ordination and dissemination schemes integrating SMEs from a particular sector at regional or local level by "Area Agents". These schemes will focus their activity on the translation of the information society concepts into the strategies and the day to day operation of the companies operating in the sector.
• Raising the awareness of industrial actors as far as the opportunities deriving from improved use of technology are concerned; and providing the methodological and technical tools which will allow the best integration of new technology in the different business functions and ensure so the optimal complementarity with the already developed ones.

In practical terms, the selected pilot sites focus on:

• the identification, detailed specification and planed implementation of concrete information society services and applications aimed at one or many of the following: helping companies from the sector to achieve critical mass for efficient market access; assisting the sector in the establishment of co-operative research and development facilities; making possible for companies and administrations to cut through red tape, streamline communications between companies and administrations, drawing down financial and administrative overheads.

• raising the awareness of business executives in the area of IT benefits and making them rethink the relationship between business performance and information technology; implementing methods and tools which will facilitate the use of new information technology by industrial managers as part of a process of business transformation and promoting the sharing of experiences and the cross-fertilisation of best practice through a knowledge and information-sharing network.

Background documents are available on the "Resources " Section.