Select Committee on European Union Written Evidence

Memorandum by Adhocracy Consulting Ltd (UK & AUS) and DIT Solutions (UK) Ltd on accelerating e-commerce in the EU and Britain


The submission covers several courses of action open to the EU and Britain to establish a strong presence and advantageous position in e-commerce, supported by a sound infrastructure. These are the real issues for accelerating EU-commerce activity.

  This paper identifies and addresses ways to accelerate e-commerce in the EU and Britain, the challenges governments face and the need to resolve . . . whether by intention, control, guidance or influence.

  This submission discusses some of the stumbling blocks like security, speed and software, plus the necessary work skills and competencies necessary for a successful e-future. It discusses possible unlawful activity, company ethics, governance for government, competition with other countries ie USA and Australia. The implications of e-commerce on taxation issues and international law. It also covers the necessity for Government-sponsored incentives to encourage SMEs and Startup companies, venture capital, to attract talented people and developing a strong e-culture.

  Although the Internet we see today is in its infancy it is not without design or structure. It is the biggest experimental project the world has ever seen. It is still a concept without limits and it's working. The Internet of tomorrow will be vastly different and will interact with our everyday lives many times a day, in many different ways. With so many minds from so many cultures committed to its development, no one company, organisation, individual or government can rightly claim ownership of the Internet . . . this is its strength and why it will continue to grow, develop and influence our lives. No one can accurately predict just how much it will affect our lives.

  Particularly challenging to government, is the rate at which technology is evolving. Just trying to keep up with the ethical, business and social issues and implications presented seem enough to think about. But these only represent some of the issues to be addressed. Despite a positive attitude many Governments display toward e-commerce, a majority of would be consumers still hold fears regarding e-commerce transactions and are questioning "why?". It is equally worrying, according to ECATT, in 1999 only 30 per cent of very small companies in Europe are online. They do not appear to have any understanding of how their businesses are about to be radically changed. In the USA it is the very small companies that are creating most of the innovative and successful business models on the Internet and are rapidly changing the pattern of competition . . . giving new meaning to competitiveness.

  History has shown that even the most liberated organisation needs some framework and guidance on conduct and behaviour. Because of the Internet, its infancy and its diversity, complexity and global reach . . . what style of Government intervention is necessary for such a transient concept? The argument this paper presents is: "Will the introduction of rigid policies and controls stifle the growth of e-commerce or should Government, by incentive, example and guidance, introduce enabling structures and mechanisms, rather than restrictions?"

  The objective of this paper is to attempt to determine the course of events necessary to accelerate eEurope, creating an information society for all.


INTRODUCTIONI(i), I(ii), I(iii)
What needs to be done to create confidence and to stimulate e-commerce
Does the European Commission's draft Action Plan "e-Europe: An Information Society for All" offer a realistic means of Promoting e-commerce in the EU?
10 Main Issues for Governments in regard to the Internet and future technology outlined in the e-Europe report with comment (eu/1) to (eu/11)
Will codes of conduct and co-regulation provide sufficient protection? Is there a case for intervention by national Governments and the EU?
Do the institutions of national governments, on the one hand, and the European Commission, The Council of Ministers and European Parliament, on the other, function with sufficient flexibility and coherence to promote the EU's objectives in the field of commerce?
Should existing EU institutions' internal structures be changed, or new ones created, to improve policy development and co-ordination?
How can structural change be brought about fast enough to accommodate to the growth of e-commerce?



I(i)  The Internet and e-commerce is democracy, entrepreneurial spirit and free speech in its purist form, and it is booming. In this paper we present responses to your questions and our understanding of the main issues outlined in the Government paper eEurope together with our ideas to accelerate e-commerce in Europe.

  I(ii)  Included intermittently are paragraphs on the "Australian Experience" with, to support our findings for your commission. We finish with a general summary covering "Realising this e-Future" and the contribution we consider Government can best make in bringing about turning this vision into reality.

  I(iii)  Joining in the spirit of e-Commerce and the Internet—even though the Internet we see today is still in its early infancy it is still a concept without limits. It is not without design or structure and it is working. The Internet of tomorrow will be vastly different and will interact many times a day, in many different ways with our everyday lives. With so many minds from so many cultures committed to its development, no one company, organisation, individual or government can rightly claim ownership of the Internet . . . this is its strength and why it will continue to grow, develop and influence our lives. We know it will, but no one can accurately predict just how much it will affect our lives. The Internet, although a new medium for communication, is already changing the lives of millions of people everywhere, forever. It is too important to be controlled by the few. This raises several questions of governance for Governments.

  How can countries benefit and prosper from this evolution, or dare we say it . . . revolution? Can it be controlled? Can it be regulated? Can or should governments monitor transactions and introduce some degree of control? If so, what style of Government intervention is necessary for such a transient concept?

    "The worldwide web is the biggest experimental project the world has ever seen."—Peter Randall, Strategist. The Adhocracy Group Pty Ltd (AUS).

Question 1: What needs to be done to create confidence and to stimulate e-commerce?

  1(i)  The socio-economic environment of a country heavily determines the way in which commerce is conducted. Culture plays a big part in how goods and services are bought and sold. Confidence is part of this culture. The UK already has a mail order, credit card culture and electronic commerce, which, to some degree, is based on blind trust by the consumer. But then so is much of daily life. Is trust a real issue or is it just "newness"?

  1(ii)  Electronic commerce is booming. Researchers are predicting seemingly optimistic outcomes for the future. Already, many of these predictions have been exceeded. But how can this development be leveraged, with the right marketing and advertising, to give confidence in the use of e-commerce or is that too simplistic a view?

  1(iii)  The UK already has a stronghold in place in the Financial Services community where e-commerce is really having a major impact on how business is done. With this stronghold, it is possible to leverage the Financial Services' experience for substantial community and economic good.

  1(iv)  From a consumer's point of view, we are yet to see a headline read "e-commerce transaction secure, safe and product delivered, we guarantee it!" All we see is "e-commerce Credit Card rip off". The chance of credit card fraud (with 128 bit encryption) occurring as a result of an e-commerce transaction is the same as if a purchase was made in a store, by mail order or phone. It is surprising that these same people are reluctant to use their credit card for an Internet transaction, when regularly people unthinkingly, hand over their credit card to an unknown waiter in a restaurant, who then takes it away for 10 minutes, out of sight of the customer!

  1(v)  Two issues assumed foremost in the mind of the general public, which appear to stand in the way of, but do not represent a great barrier to increased e-commerce use are:

    (a)  a credit card number being used unlawfully; and

    (b)  paying for goods and services not received.

  1(vi)  Although these fears are mostly unsubstantiated, these two issues alone create unwillingness, stifle growth in, and do little to create a feeling of, consumer confidence. Emerging encryption technologies and education from governments or privately run campaigns/groups will eventually assist with resolving both issues.

  The Internet has an in-built ability to seek out, expose, then inform millions of people simultaneously world-wide of any unlawful activity or unacceptable behaviour, the power of which will frighten even the biggest organisations.

  1(vii)  Unlawful activity only works well when undetected

    —  Campaigns showing people using e-commerce and their credit card on the net will start to raise confidence. The public and business alike are seeking assurance. Familiarity is the key to public confidence. A framework is needed to encourage more companies to interact with e-commerce. Education on Internet security, explanations of encryption and why it is safe will also instil confidence. It is our belief that technology and the private sector, rather than government intervention, will resolve issues of security.

  1(viii)  Familiarity, ready availability, ease of use are three steps to creating confidence in a mass market.

    —  e-Commerce needs to be nurtured to grow strong and be of increasing value to humankind. Transaction has to be made easier, clearer and more technically accessible. From the public's point of view intellectual property and copyright laws are of little interest. From a Vendor's/Creator's point of view, intellectual property issues need to be resolved. Copyright laws should be tightened, delivery infrastructures secured and regulated. On the WWW there are many debates regarding whether or not copyright and intellectual property can be or should be maintained on such a wide scale. eg Should the copying of a book for profit be breaking copyright, plagiarism or fraud? Or should this be part of the public domain, with certain rights attached regarding to public use.

  1(ix)  The aim is to start an upward spiral. A spiral of confidence. As more people start to purchase online, confidence will grow with familiarity, leading to more people wanting to go online.

Question 2: Does the European Commission's draft Action Plan "eEurope: An Information Society for All" offer a realistic means of promoting e-commerce in the EU?

  2(i)  Predicting the future is never easy—the paper does not appear very clear on future intention, or pointing out a positive direction and falls short on implementation strategy. This may be due to the fact that life style and technology is evolving at such a rapid pace that governments are now faced with the task of keeping up-to-date with all the changes taking place. It's currently hard to pick trends, facts and figures to validate and substantiate. In any fast moving economy the issue then becomes implications of, rather than the new, technologies themselves. The drivers of this change is not the new technology, it is people. Technology is only feeding the momentum already created by committed and involved people who want it to succeed.

  2(ii)  By addressing the implications rather than trying to pick new technologies, the government will then be in a better position to evaluate the impact of the new technologies on society as a whole, how it will affect society and the effect it will have as a whole. It then becomes possible to leverage the changes taking place to everyone's advantage.

  2(iii)  The eEurope report provides a positive and enthusiastic view of promoting e-commerce in the EU. But is it asking the right questions?—the constant comparison to the USA, in our opinion, is not a good comparison. The lead already established by the USA means that the cost of entry into established .com markets is already proving to be very high, and in many cases prohibitive for many small enterprises and start ups. This has resulted in the increase in venture capital investment being made available. The USA encompasses a unique and totally different social culture to those of the countries in the EU. Americans have been brought up in a Marketing environment, a culture of consumerism and entrepreneurship. Theirs is the epitome of Adam's philosophy of economics at work, a classic picture of self-consuming society. Europeans have their own unique identity and culture, this should be nurtured and enhanced, not forced to change.

  2(iv)  Commercial gain and economic growth come in many forms—what e-Europe is hoping to achieve is to change this culture within three to four years and overtake the USA in e-commerce. It is our opinion this will be very hard to do. In strategic terms e-commerce is in the hands of early adopters and has yet to be embraced by the followers. Europe faces barriers that will take many years to change . . . those of language, culture, legal, social . . . they are all part of e-commerce and how it is transacted. Unless activity is targeted at specific socio-economic groups, ie those early adopters of new technologies, increased demand fore-commerce goods and services will not be common place. The EU should find its own direction and niche; the medium allows for this. Nobody, apart from Europe itself, is telling Europe it is going the wrong way about e-commerce.

  2(v)  Increasing consumption always starts from curiosity, followed by affirming evidence and ends with favourable social comment—in a Nielson report, it was stated that 80 per cent of Internet use is for information gathering; compared with 20 per cent usage for online purchasing. We believe that the future for e-Europe lies in the e-business to business (B2B) sector, development of convergent technologies and enabling software. B2B is reported to be the fastest growing and most profitable sector of the Internet, creating higher profitability and growth, short term performance and long term economic sustainability, and is expected to remain so into the future. The present stock market results currently support this assumption . . . particularly compared to the rather precarious nature of the seductive start-ups, where disillusionment will set in as soon as results are slow in coming. Patience for results is not a common trait of Western business investors.

  2(vi)  Information flow is the lifeblood of the Internet, information is the commodity of the e-commerce future—the EU will be in a position to capture and utilise the very essence of the Internet by creating a vibrant and incentive-based infrastructure, encouraging business minded entrepreneurs and so educating EU citizens in many business areas. In the short term we do not believe that it would be wise to compete with the USA as too many cultural changes have to take place. Although the World Wide Web (WWW) was first conceived by an Englishman and created in Europe, the USA was ready for the WWW, revolves around it and their culture has thrived and encompassed it.

  2(vii)  The e-Europe report points in the right direction, but we believe that it is a little ambitious and should be more pragmatic with its intentions. We have been asked to keep this report short, and as such this is not the medium to detail our ideas. However, listed below are the 10 main issues for governments in regard to the Internet and future technology outlined in the e-Europe report with comment:

(eu/1)  European youth into the digital age

  Three objectives for education as identified in eEurope

    —  (eu/1(i))  Mastering of the Internet and multimedia resources—technical skills are only a small part of the Internet and Internet literacy; we need to nurture business people who can utilise the benefits of the Internet. To master any skill requires years of in-depth experience and training. We need to encourage entrepreneurial skills, foster creativity, educate on business issues such as finance, raising funds, marketing, sales etc.

    —  (eu/1(ii))  Using these new resources to learn and acquire new skills—how can this be taught? The Internet is about creativity, building new ideas and services. This can only be brought about by encouraging entrepreneurial thinking.

    —  (eu/1(iii)  Acquiring key skills such as collaborative working, creativity, multidisciplinary, adaptiveness, intercultural communication and problem solving—this is the key. This is where good business starts, with communication. Europe is culturally diverse, and an understanding of these cultures and how to communicate across them will be a great asset to an e-business person.

(eu/2)  Cheaper Internet Access

  For the Internet to saturate society, it must be as available as telephone and television. It must be easily accessed. Currently, for permanent Internet connections, costs are too high.

    —  (eu/2(i))  The Australian Experience—in Australia a cable modem from Telstra or Optus (the two primary telco's) offer a four megabit permanent connection to the Internet, for the home costs are $50 to $59 AU$ per month (approximately £20 to £25) with no call costs. This offers high speed, dedicated Internet connections that are affordable for the home.

    —  (eu/2(ii))  In comparison BT offer a 0.128 megabit (128K)/sec for £27 with additional twice the standard per minute call costs (4p to 8p/min). The per minute charge coupled with the low speed access hinders further penetration into mass consumerism.

(eu/3)  Accelerating e-commerce

  eEurope states that Europe has significant strengths for e-commerce.

    —  Europe has a similar sized economy to the USA.  The size of the economy is a good start, however the culture of that economy is more important. The USA has a consumer culture.

    —  Europe has the Euro . . .  USA has the Dollar . . . the accepted mental currency of the WWW. The Euro will not be a cash currently until 2002.

    —  Security of Encryption technologies.  USA has just allowed the rest of the world to have access to a powerful 128-bit encryption so we can all be as secure as they are!

    —  Electronic Banking.  Electronic Banking has been available in USA for a while now.

      (eu/3(i))  The significant points that e-Europe lists, as strengths cannot be relied upon. They are good points to form a base, however they do not leverage a competitive position.

      (eu/3(ii))  The USA currently owns much of the Internet e-commerce technology which is also created and driven by USA Corporations.

      (eu/3(iii))  The fastest way to accelerate e-commerce would be to provide business incentives and a fast, secure and reliable infrastructure with entrepreneurs who have the ability to create dynamic e-business.

(eu/4)  Fast Internet for researchers and students

  Researchers and Students alone do not create mass markets, mass-consumers do. Fast Internet access should be made available to everyone. Many of the new start up.coms appear to be started by University students, in particular with Marketing Degrees, low on capital but with a bold idea.

    (eu/4(i))  The Australian Experience—RMIT University in Melbourne, Australia is currently setting up an Internet based degree course where lectures and tutorials will be conducted on-line.

    (eu/4(ii))  A Government/University collaborative company, MIT (Melbourne IT Ltd), which listed in December 1999, and is set to open in the USA this year 2000, is administering governance and registration of Internet domain names. This now publicly listed company proved to be so successful and profitable. It adopted the and is now rated as joint second in size with of New York. Network Solutions, a USA organisation, is rated No. 1. At the time of writing, the Australian Government has announced the formation of an Institute of IT, following the success of the Institute of Sport.

(eu/5)  Smart cards for secure electronic access

  We have no experience in this area as it is not really Internet, or e-commerce.

  It is another way of paying or experiencing.

(eu/6)  Risk capital for high-tech SMEs

  Up until now the eEurope report has focused on the future of e-commerce. Risk capital focuses on today, on the ideas that are ready to take Europe forward now. Venture capital is one of the essential ingredients in the success of American e-commerce. Again the culture of America is more conducive to risk taking, in Europe it is the opposite. The low risk attitude needs to be changed in Europe, and changed quickly.

    (eu/6(i))  The government should leverage by incentives into e-commerce and maximise current schemes. The private sector must get excited about investment possibilities in SMEs. The returns can be enormous, they can also be terrible. The infrastructure must be in place to take an idea to market, quickly and without stifling creativity. There has to be absolute enthusiasm about the idea ofe-business, for it to be embraced.

    "Internet innovation today forges the markets of tomorrow."

    "It is a market place for free flow not freedom to do whatever we like"—Peter Randall, Strategist, The Adhocracy Group Pty Ltd (AUS).

    (eu/6(ii))  The barriers discouraging calculated risk-taking need to be removed, deregulation of vital industries such as telecommunication monopoly needs to be vastly speeded up, as in the Australian experience. It is inevitable, and simply a matter of when in the UK. Small to medium enterprises should be encouraged to become involved in the process. But the initiative has to start with the Government.

    (eu/6(iii))  The Australian Experience—The Venture Capital market in Australia is similar to that in the UK . . . in need of a little assistance! Venture Capital in the USA is an explosive market with many new start-up companies being registered everyday enabling SMEs to emerge at an astonishing rate. It is important to realise many of these start-ups are based on business naivety rather than good business design and will result in many new companies failing.

(eu/7)  e-Participation for the disabled

  Design for all or Universal Designs must be integrated into any e-commerce strategy, as the Internet and all of its benefits must be available to everyone.

(eu/8)  Healthcare online

  By electronically linking hospitals, laboratories, pharmacies, doctors, primary care centres, homes and patients would encourage the sharing of knowledge, minimise administration, and reduce operating costs.

    (eu/8(i))  Doctors and researchers across the EU could communicate freely and quickly, sharing information and knowledge, improving the quality and accessibility of health across the EU.

    (eu/8(ii))  The more everyday interaction the public has with the Internet, the faster it will become an accepted medium.

(eu/9)  Intelligent transport

  Intelligent transport has been a goal of governments worldwide since the early 80s. Reducing greenhouse emissions has become a high agenda item for most governments in the last few years. The Internet provides a backbone for communicating between, and linking systems and offices around the EU.

    (eu/9(i))  Every automobile on the roads could relay their position and speed back to a central computer that processes the information and produces real-time traffic flow advice. This advice could then be relayed back to the automobiles.

    (eu/9(ii))  How technology is implemented into this area will depend greatly upon new technology in the coming years.

    (eu/9(iii))  The Australian Experience—as in the UK; the USA and Australia have introduced smart signs on their major roads. In Australia, (Victoria) these smart signs can even be accessed online.

(eu/10)  Government Online

  The advent of e-commerce means that what has served business and consumers well in the past may not work well in the Internet future. This is where EU government can lead the way by joining in the spirit ofe-commerce and teaming up for research on a massive scale with other countries, organisations and individuals to compare points-of-view and find solutions to common problems by exploring options. By giving citizens access to better government information the public can stay better informed and up-to-date with governance issues and the challenges governments face in today's environment.

    (eu/10(i))  Online Tax systems, reports, health systems, visas . . . all government public facing departments could add value by going on-line and making the act of information gathering easy.

    (eu/10(ii))  As a point of interest, every house in Singapore is reputed to have access to high-speed connection. Singapore, however, monitors the content coming into the country by the WWW.

  (eu/11)  The UK government currently has a very strong Web presence, What is needed now is to incorporate applications and services that can be used to save time, ie, electronic tax registration, change of name and address details for certain departments, etc.

    (eu/11(i))  The Australian Experience—the Australian Government has taken a strong lead in this area. State governments provide online information. Here are some examples:

    —  the Federal Government web site at;

    —  up-to-date information regarding Victoria at;

    —  tender applications, real-time traffic reports, online update for driver's licence information at;

    —  online geographic information, maps, electricity, water, sewerage etc at;

    —  the NSW government web site at;

    —  for a full list (300+) of all Australian government web sites visit alphal.htm/

  Some of this information is sold on from the government, through private organisations, creating a secondary income for the government and creating value-adding services to its citizens, eg GI Connections.

Question 3:  Will codes of conduct and co-regulation provide sufficient protection? Is there a case for intervention by national governments and the EU?

  3(I)  Policy disables growth. Mechanism enables growth. Codes of conduct and co-regulation will be hard, if not impossible to police and as such will only apply to companies that would not require regulating.e-Commerce exists in cyberspace, a place that is not tangible, and difficult to police.

  3(ii)  You cannot control where a company is operating from, when it is in cyberspace. The creation of the .eu top level domain will provide some means of controlling and enforcing codes of conduct. New tools will need to be created to help police what can be policed; technology will play a crucial part in government policy making.

  3(iii)  Governments must find a way of becoming dynamic and fast responding if they are to govern an information society. Eg. Three years to implement telecommunications reform as detailed in e-Europe is too slow. In three years we will have completely different mediums of delivering the Internet.

  3(iv)  International Laws, encompassing flexibility for fast change, need to be drafted and agreed upon by every major country. Even then there will be countries that will not agree and a hole in the system will remain open. Currently we cannot control drug trafficking and software piracy. No matter how much money governments allocate to combating these offences, people still seem to find ways around them.

  3(v)  Governments can be prepared. They can control how companies that are registered in their country conduct business. However, a feature of cybershops is that they can be anywhere in the world and still conduct international operations.

  3(vi)  Governments can advise on protocols and governance. They can offer incentives and deterrents, they can police what is in their control, but in the end, unfortunately, we do not believe that governments can intervene, without banning internet access all together, and that would not be good to e-commerce! Codes of conduct and co-regulation may however, help with increasing confidence in e-commerce.

  3(vii)  Some issues that will arise with a legislated/policed market place are:

    —  inherited bureaucracy mires EU Governments, making them slow to react to create relevant, timely legislation/policies;

    —  laws that are currently in place for international and domestic trade are still providing a strong protection for consumers, depending on which country the trade is taking place. Some countries offer no consumer protection;

    —  media ownership laws will have to be updated to include Internet exposure. e-Shamming is starting to creep up on the Internet. This is a practice where a company creates many diverse web sites that offer favourable comments about their product. These web sites may appear to be offering personal recommendations of a product or favourable reviews and give out a false or deliberately misleading message.

Question 4:  Do the institutions of national governments, on the one hand, and the European Commission, the Council of Ministers and European Parliament, on the other, function with sufficient flexibility and coherence to promote the EU's objectives in the field of e-commerce?

  4(i)  The writers do not have experience with any of these Organisations. Addressing the question of flexibility, our answer is "probably not!" However, it is doubtful if there is a public or private company in the world at the moment, that can change fast enough to keep up with the Internet, nor probably in the future. Internet directive strategies of today, often obsolete after only eight to 10 weeks, need to be highly flexible in implementation and execution with a fixed intention in mind. They need to accept and adapt to rapid change and quick decision making.

Question 5:  Should existing EU institutions' internal structures be changed, or new ones created, to improve policy development and co-ordination?

  5(i)  The definitive role of the government puts them in a position from which it is very difficult to manage the Internet and e-commerce, but in a strong position to influence and guide. Decisions made by governing bodies affect so many people that each decision has to be carefully debated over time, every consequence worked through and then, when all that has been done, a decision announced. The terms "institutions" and "structure" denote strong foundation, slow moving, slow to accept change and stable. This is why we call the new branches . . . Agencies.

  5(ii)  The Internet and e-commerce is evolving and changing faster than any market, or medium ever experienced before. The knowledge sharing and work pooling that the Internet is providing is driving its own growth. New technological advancements change the direction of the Internet and e-commerce almost daily.

  5(iii)  New, highly dynamic, highly flexible, flat structured agencies are required. Agencies that will keep up with, and be able to understand the latest changes and their implications. The individuals who make up these agencies need to be business-, technical- and government- minded and they must be ready for change.

  5(iv)  These agencies should be designed to be dynamic, to have decision-making processes similar to those found in highly dynamic and fluid American companies, those companies that prosper from the Internet and can change strategy and policy as fast as the Internet evolves.

  These agencies must have regular dialogue with business, web strategists, IT professionals, technologists and Venture/Risk Managers.

    "Change is the only constant factor in Internet e-commerce."—Andrew Bienert e-consultant, DIT Solutions (UK).

  The question is: "Are governments prepared to relinquish control and trust the decisions made by these agencies?"

Question 6:  How can structural change be brought about fast enough to accommodate to the growth ofe-commerce.

  This was discussed in question 5.


  (7)  The Australian Experience appears to have evolved through awareness and general understanding of computer technology, started by the R J Hawke Administration in the 1980s. Much of the e-commerce in Australia has been created around doing established things in a different way and is not yet creating many new innovations. There is still a lot of work to be done.

    "E-business is not moving existing transactions onto the Internet. It is the creation of new business on this new medium"—Christopher Lockhead, CEO, Scient (USA).

  7(i)  Australian Government Departments/Schools/Universities have taken e-commerce to heart, mainly due to the self-funding policies of Government encouraging these Institutions to raise their own revenue by being entrepreneurial in selling their services.

  7(ii)  Comparing the EU to the USA and Australia is a hard comparison. The United States and Australia have had a marketing culture for a long time. European countries market and sell their products via other means. The United States are driven by marketing and entrepreneurial spirit. This culture has been instilled in Americans for many years—it is part of "Capitalism—The Great American Dream". The majority of EU countries have a history of a "socialist" culture.

  7(iii)  The Internet is predominantly an American English language communications medium. The USA and Australia speak English as a first language. European countries do not.

  7(iv)  The success of Internet companies in the USA is mostly due to the fact that USA technology corporations predominantly nurture and drive it. The Internet fits into their society so well. A strong culture for mail order already existed in the USA and, combined with a common language audience, these then became strong ingredients in the drive of the Internet in the USA.

  7(v)  Pioneering efforts are being made by many USA institutions (major Universities and Finance), Management Consulting Organisations (eg PricewaterhouseCoopers) and Manufacturers (IBM and Hewlett Packard) alike in an effort to shift management thinking towards e-commerce. All these Organisations realise that e-commerce must constantly move forward or it will stagnate and fade into obscurity. It is, however, important to ensure that lofty ideals do not become seductively oversold and get in the way of pragmatic growth and development.

  7(vi)  e-Commerce represents a rare window of opportunity. We are experiencing natural organic growth of a vision, ideas and technology where potentially anyone can be connected to everything and it is already changing the way we learn, work, and how work gets done. It is the most powerful enabler of economic growth and social development ever devised. Therefore, any recommendations on e-commerce should avoid the growth of independent controls by individuals or governments. In saying this, the need for protocols on how things should be done is equally as important for e-commerce or the alternative become one of a future that is unreliable, unstable and out of control.

  7(vii)  Governments must be made aware of the cashless cyber society and the implications on the Taxation system. Products that can now be transferred digitally around the world (software and information) are difficult to track and therefore make it difficult to tax.

  7(viii)  This leaves us with four questions:

    —  Who should exercise power over the web and what protocols should be adopted?

    —  What tools are needed to assist in exercising power over the web?

    —  Should e-Europe even be considering competing with the USA at this time or should it be looking towards developing business enabling technologies, (as in confidentiality, security of transactions, protection of sensitive documents, authentication of merchants etc) application software and new business models as a means of creating a very strong presence on the WWW?

    —  What will determine the course of events?


    —  Attract talented IT and Marketing professionals, and encourage talented entrepreneurs and individuals. Every developed nation is going to be running programmes to attract talent. 30 per cent students in Australian universities are studying business-related subjects.

    —  Promote e-commerce via mass media.

    —  Educate society at all levels via common media, school, television, print, radio . . . We cannot allow the gap to widen between the knowledge have's and the knowledge have-nots.

    —  Encourage entrepreneurs to proceed with ideas.

    —  Create an upward spiral in e-commerce, business, Risk Capital/Venture Capital.

    —  Incentives for information brokering (the selling of information) and become a smart country/region.

    —  Set up online applications, both government and private systems.

    —  Monitor laws and build relationships with other countries regarding Internet laws.

    —  Ultimately, identify the true benefits to Europe and not just try and compete with the United States.

  8.  e-Commerce should not be seen in isolation from the Worldwide Web (WWW). For government it is not simply a tool of reference or research for information. It is an enabler of future development of society for the whole of humanity and not just for a fortunate few. As in any interactive society governance should have a strong presence.

  8(i)  This paper has tried to inform on the awareness of change needed to accelerate e-commerce, e-business and e-services in the EU and UK. Recent tax reforms, specifically IR35, are having an astoundingly negative effect in attracting world class e-business skills and talented people into the UK. Coupled with the lack of Venture/Risk Capital, IR35 is:

    —  dramatically reducing the attractiveness of the UK to e-commerce skilled personnel, those exact personnel needed for the UK IT industry. They are transient, highly trained, independent workers who go to the country offering the best work facilities and opportunities for professional development;

    —  increasing the attractiveness of the USA and some European countries for these highly skilled professionals.

  We must avoid a "brain-drain" to the USA.

  8(ii)  Even the most liberated organisation needs guidance on conduct and behaviour. Real change takes time and given time natural structures will evolve.

  Until it is decided what the Internet should be, what will make it work and what will cause it to fail . . . all we have to work with is rhetoric and there are no issues to be resolved.

    "We must leverage our Intellectual Property into Intellectual Capital"—Steven Randall,e-Consultant, Adhocracy Consulting (UK).

26 February 2000

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