1. 1 EBIP Synthesis Report Overview Graham Vickery, OECD EBIP Workshop 29-30 October 2001, Rome

2. 2 Aims of the workshop Explore the rapidly evolving adoption and use of e-commerce and the Internet Discuss implications of e-commerce for firm strategies Examine impacts on sectoral dynamics and market structure Draw out e-commerce policy issues Contribute to follow-up work

3. 3 EBIP project: participation Launched late 1999 OECD Working Part on the Information Economy TNO supported by the Netherlands Ministry of Economic Affairs and Telematica Instituut IPTS (Seville) National teams from the Netherlands, France, Canada, Italy, Korea, Mexico, Norway, (Portugal), Spain, Sweden, and the United Kingdom

4. 4 Method and goals Common analytical framework and interview procedure with established firms operating mainly in B2B e-commerce Firm case studies undertaken late 2000/early 2001. Detailed responses from 179+ firms 30 reports covering 14 sectors in 10 countries Cross-country Synthesis Report Need for policy-makers to understand the e- commerce environment of participants

5. 5 EBIP summary results E-commerce is part of a much larger business and economic evolution partly driven by ICTs Successful e-commerce applications usually part of broader strategies to respond to business challenges But for many firms e-commerce represents a major innovation in the ways of doing business

6. 6 Is e-commerce having significant impacts on business? E-commerce strategies led more by commercial than by technological considerations. The ‘commerce’ factor outweighs the ‘e’ factor Many markets may be more open and efficient with advantages for producers and consumers E-commerce may provide new avenues for firms to create new dominant positions or perpetuate existing ones Current strategies and practices will evolve considerably, and monitoring e-commerce impacts is only beginning

7. 7 Why do firms undertake e-commerce? Motivations to apply e-commerce are high where ICT investment is already high and risk relatively low. Most firms want to: Reduce costs Increase transaction speed and reliability Improve management capabilities Develop or improve collaboration capabilities Create interdependencies Better manage customer relations Create more added value

8. 8 What activities are going on-line? Firms cautious about putting strategic activities and transactions on the Web. When they do they protect their transactions and advantages Advertising catalogues, information services are overwhelmingly on the WWW Transactions (ordering, billing, payment, finance) are on EDI, EDI over Internet, Extranets Migration from EDI to Web-based systems, for example in ordering, only partial Most e-commerce innovations were still being planned or developed when interviewed

9. 9 What kinds of innovations are taking place due to e-commerce? Product innovations are more common among firms with intangible assets Process innovations are more frequently implemented by large firms Expansion and segmentation (organisational innovations) are more common for firms with intangible assets, and small firms are involved in and seem to benefit from expansion strategies

10. 10 What are some quantifiable impacts? Vast majority of firms considered e-commerce facilitates the management of business relationships For almost half of firms, e-commerce tools reduced the cost of reaching new customers and suppliers A greater mix of direct and intermediated sales help customers bypass traditional intermediaries and facilitate new ones

11. 11 Quantifiable impacts continued Most firms who replied claim the level of employment was unaffected - composition often changed to include more high skilled workers Many firms reported positive effects on turnover and profitability E-commerce developments reinforce existing trends. Established incumbents and their business models will survive and e-commerce may not alter established market power. “Second mover” advantages appear important Very few firms saw e-commerce destabilising existing relations and small firms may not be advantaged

12. 12 Quantifiable impacts continued Successful firms have coherent overall strategy with e-commerce and IT skills development embedded in this strategy The impacts of e-commerce within firms are difficult to quantify. - problems isolating effects coming solely from e- commerce - most firms are still in the implementation stage

13. 13 Some policy directions Firms saw three policy areas as important: - competence factors: general education, specific IT and e- business skills - cost factors, including technology - confidence factors including international clarification, enforcement and cross-border inter-operability of existing legal frameworks rather than creating new ones Additional OECD analysis suggests areas for policy action: - skills/competences - infrastructure (pricing, broadband) - market structure/competition