Memorandum by Adhocracy Consulting Ltd
(UK & AUS) and DIT Solutions (UK) Ltd on accelerating e-commerce
in the EU and Britain
SUMMARY
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.
INDEX
| INTRODUCTION | I(i), I(ii), I(iii)
|
QUESTION 1
What needs to be done to create confidence and to stimulate e-commerce
| 1(i)-1(ix) |
QUESTION 2
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?
| 2(i)-2(vii) |
| 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) |
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)-3(vii) |
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 commerce?
| 4(i) |
QUESTION 5
Should existing EU institutions' internal structures be changed, or new ones created, to improve policy development and co-ordination?
| 5(i)-5(iv) |
QUESTION 6
How can structural change be brought about fast enough to accommodate to the growth of e-commerce?
| 6 |
| COMMENTS | 7-7(viii) |
| RECOMMENDATIONS | 8-8(ii) |
ACCELERATING E-COMMERCE IN THE EU AND BRITAIN
INTRODUCTION
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 e.com.au, 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 e.com
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 Dot.com
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 .com.au and is now rated as joint second in size with Register.com
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, http://www.open.gov.uk/. 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 http://www.fed.gov.au/;
— up-to-date information regarding Victoria at http://www.vic.gov.au/;
— tender applications, real-time traffic reports, online
update for driver's licence information at http://www.vicroads.vic.gov.au/;
— online geographic information, maps, electricity,
water, sewerage etc at http://www.giconnections.vic.gov.au/;
— the NSW government web site at http://www.nsw.gov.au/;
— for a full list (300+) of all Australian government
web sites visit http://www.fed.gov.au/sitelists/web 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.
COMMENTS
(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?
RECOMMENDATIONS:
— 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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