e-commerce@its.best.uk - Fatal System Error
e-commerce@its.best.uk - Fatal System Error
e-commerce@its.best.uk - Fatal System Error
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1. EXECUTIVE SUMMARY1.1 Electronic commerce lies at the heart ofthe Government's vision for building amodern, knowledge-driven, economy in theUK. The Government's aim, set out in the1998 Competitiveness White Paper, is to"make the UK the <strong>best</strong> environment in theworld for e-commerce". This report providesthe culmination of a six-month study by theCabinet Office's Performance & InnovationUnit. It responds to a commission from thePrime Minister to identify the strategynecessary to achieve that goal.Key messages1.2 The report sets out three key prioritiesfor the UK:to overcome business inertia - UKbusiness is not yet fully switched on toe-commerce. The <strong>best</strong> UK companiesare world class, but many are laggingbehind. Small businesses especiallyneed to wake up to the challenges;to ensure that Government's ownactions drive the take-up ofe-commerce. Sustained progress mustbe made on electronic service deliveryand electronic procurement;andto ensure better co-ordination betweenGovernment and industry to gainmaximum benefit from existing andproposed programmes.E-Commerce isimportant...1.3 E-commerce is of increasing importanceto the UK economy. It enables revolutionarychange in two ways: 'process' e-commerce -managing the vital flows of informationwithin industry supply chains - and'transaction' e-commerce, selling productsand services within industry (andGovernment) or to consumers. It can result inreduced costs and the transformation ofGovernment, companies and markets as wellas bringing new opportunities andcapabilities to citizens.1.4 UK e-commerce transactions this year(1999) are expected to be worth around£2.8bn. 1 They have the potential to growtenfold over the next three years, reachingaround 4% of total UK Gross DomesticProduct (GDP) by 2002. Their contribution,however, is likely to be disproportionatelygreater than this relatively small percentagewould suggest. E-commerce tends to putdownward pressure on inflation and increaseseconomic growth. Figures published by theUS Department of Commerce 2 suggest thatin the years 1995 to 1998 the Informationand Communications Technologies (ICT)industries - key enablers of e-commerce -were responsible for 35% of US realeconomic growth, whilst representing only8% of US GDP. In 1996 and 1997, thesesame industries are believed to have loweredUS inflation by 0.7%.1.5 The overall impact of e-commerce onemployment is less clear. It will undoubtedlyremove jobs, particularly in intermediaryorganisations whose perceived 'added value'is undermined. At the same time it will createjobs, in new industries such as 'informationbrokering' and old industries such asdistribution and logistics. If the UK fails tocapitalise on the opportunities that e-commerce presents, then jobs and prosperitywill be eroded by e-commerce competitionfrom overseas.1Source: IDC research report 1998. Data is only available for part of the e-commerce scope defined in Chapter three. This marketfigure excludes purely telephone based services such as tele-banking2Source: Emerging Digital Economy II, US Department of Commerce, June 1999E-<strong>commerce@its</strong>.<strong>best</strong>.<strong>uk</strong>1