This report was carried out by the Lithuanian Free Market Institute, and aims to study the factors and impacts of the Information Society in Lithuania. The report reflects the research results, comments and opinions of the team of authors. It does not necessarily reflect the opinion of the European Commission. It is organised around 9 themes – economy, demography, government policies, industrial development and competitiveness, relevant economic activity, IST penetration rates, institutional capacity and regulatory background, education, and culture. The section on each of these themes concludes with a specific SWOT analysis. Finally, a general diagnosis is made of Lithuania’s potential for IS developments, followed by a brief section on possible scenarios for the future and policy recommendations.