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e-Commerce: its effect on business and government
ANote by the Director (Ditchley 2000/12)
In association with Andersen Consulting
1-3 December 2000
Over the first weekend of December we looked at the effect of
e-commerce on business and
Government and whether and how it might be regulated. We asked
whether we were living
through a real revolution or just another technological
development. We concluded that never
had any technology been diffused so rapidly on a global scale
with such profound effects and
with relatively modest capital costs. It was a real revolution
akin to the industrial revolution
whose ultimate effects we could only guess at.
In looking at the influence of e-commerce on business we thought
that the main winners so far
had been the high-tech companies which had provided its
infrastructure, and the main benefit an
extraordinary reduction in the cost of electronic data
transmission. It was, however, much harder
to identify the effects of all this at a macro level in the
economy. B2B exchanges were expected to
rise in five years to some 6 tril lion dollars. But, it was
pointed out, the cost of the goods involved
formed a major part of the exchange. Perhaps a stock market was
a better analogy where
enormous volumes of transactions took place with only modest
profit for the enablers.
Nevertheless it was claimed that, between 1994 and 1998, the
information and communications
industries had lowered US and UK inflation by 0.5% a year and
would increase sustainable
growth by 0.5% a year over the next decade.
In looking at the relative weight of B2B exchanges over B2C, we
found that B2Bs lead was
unsurprising. Business transactions had traditionally been
characterised by the need to
exchange large volumes of data for which the internet and IT
systems were ideally suited. Its
transparency offered competitive advantages to many suppliers
and allowed for buyers toaggregate their purchasing power. This
was, however, a basic approach. As buyers and
suppliers, particularly of sophisticated products, became more
integrated and interdependent so
open market bidding would decline. In contrast B2C was a complex
area where local cultural
factors played a greater part, as did confidence and trust in
the system two themes which ran
through the conference.
Would e-commerce prove a globalising influence? We noted its
characteristics of speed, not just
for businesses but also for Governments whose failure, for
example, to cut red-tape could
materially affect advances in e-business in their countries. The
cost was modest and the
technology was easy to operate, factors which had assisted the
spread of e-technology and
commerce. But we also noted, on the downside, that speed brought
with it the possibility of rapid
global contagion as the Love-Bug had demonstrated. It raised
problems of exclusion both
between developed and developing countries as well as within
developed countries and it greatly
facilitated certain sorts of crime.
The other key issues were payments, security and language. The
latter seemed to pose the
least difficulty in that English was already well established as
the language of most common
use. And for those who wished, automatic translation would soon
be available. Payments and
security were currently much greater problems. In both these
areas the potential gains were so
great that we felt the market would produce better solutions
than Government intervention.
We looked at the role of Governments and the desirability or
otherwise of national strategies. We
identified education as perhaps the single most important issue
in ensuring that society
generally was able to benefit from the e-revolution and that
some sectors of society were not
excluded (children would in future be e-literate or illiterate).
Sweden was quoted as an example
of a country which had, as a matter of Government policy,
decided to make Pcs available widely to
its citizens of all ages. We attached, however, equal importance
to the training of teachers and
the provision of good soft-ware programmes which would allow the
hardware to be used
effectively. We saw a role for business in helping schools where
children were capable of
learning quickly net skills appeared to be intuitive. At the
other end of the spectrum we were
told that certain cities were already in fierce competition for
elite talent, and that Government
policies on taxation and emigration could determine the
outcome.
Some of us suggested that Governments should regard themselves
as businesses. The
rovision of overnment services on the net could roduce ma or
benefits for the ublic in terms
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Andersen Consulting for their help and support for this
conference.
This report reflects the Directors personal impressions of the
conference. No participant is in
any way committed to its content or expression.
PARTICIPANTS
Chairman : Ms Mary ATolan
Managing Partner for Growth and Strategy, Andersen
Consulting.
CANADA
Dr Charles Freedman
Deputy Governor, Bank of Canada.
Mr Martin J Lippert
Vice-Chairman, Royal Bank of Canada.
Dr Peter J Nicholson
Chief Strategy Officer, BCE Inc.
EUROPEAN COMMUNITY
Mr Michael Niebel
Adviser on e-commerce issues, DG INFSO Directorate C, European
Commission.
FRANCE
M Francis Lorentz
Director General LaSer, Galeries Lafayette.
M Christian Menanteau
Director General and Editor, La Tribune.
M Jean-Marc Nol
Managing Director, Trusted Shops GmbH.
GERMANY
Dr Karl Wilhelm Pohl
Founder and partner, Pohl & Merrem Solicitors.
Mr Patrik Zeigherman
Member of the Executive Board, net.IPO AG.
IRISH REPUBLIC
Ms Vivienne Jupp
Partner Government Market Unit, Andersen Consulting.Mr Brendan
Tuohy
Secretary General, Department of Public Enterprise.
UNITED KINGDOM
Mr Robert Ayling
Senior International Adviser, Dorsey & Whitney LLP.
Mr Alastair Ballantyne
Executive Director, Morgan Stanley Dean Witter.
Mr Ian Blair QPM
Deputy Commissioner, Metropolitan Police.
Mr Jonathan Cornthwaite
Partner and Head of e-commerce law, Wedlake Bell,
Solicitors.
Dr Amelia Fletcher
Frontier Economics.Mr Mike Gannaway
Director of Marketing & Communications, Andersen
Consulting.
Dr DeAnne Julius
Member, Monetary Policy Committee, Bank of England.
Dr Raymond Knott
Market Infrastructure Division, Bank of England.
Mr William Macintyre CB
Director, Communications & Industries Directorate,
Department of Trade and Industry.
Miss Judith Mayhew
Special Adviser to the Chairman, Clifford Chance, Limited
Liability Partnership.
Mr Hugh Morris
Partner Communications & High Tech, Andersen Consulting.
Mr Rommel Pereira
Head of Chasedotcom, EAME.
Dr David H Sambar
Chairman, British American Capital Inc.
Mr Peter Settle
Client Director, Strategic Partnerships, I-Solutions, Electronic
Data Systems.
Mr John Spencer
Head of E-Business Strategy, HM Customs & Excise.
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Mr Ian Taylor MBE MP
Member of Parliament (Conservative), Esher and Walton.
Mr Chris Yapp
ICL; Director, Internet Society of England.
UNITED STATES OF AMERICA
Ambassador David L Aaron
Senior International Advisor, Dorsey & Whitney LLP.
Mr Gary Bengier
Chief Financial Officer, eBay Inc.
Dr Michael S Greve
Director, Federation Project, American Enterprise Institute for
Public Policy Research.Ms Candace Johnson
Founder and President of Board of Directors, Europe Online
Networks SA.
Mr Sarwar AKashmeri
Co-founder, Publisher and CEO, EbizChronicle.com, Inc.
Mr George M Newcombe
Head, Palo Alto, Californian Office, Simpson Thacher &
Bartlett.
Mr Paul S Raines
Vice President Internet Security, New York Federal Reserve
Bank.
Mr Randall Rothenberg
Editor-in-Chief, Strategy & Business, New York.
Mr Fred L Smith Jr
President and Chief Executive Officer, Competitive Enterprise
Institute.
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