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Statistics of the Internet: what is going on in Europe? Angele Kedaitiene, Associate professor Vilnius University, Faculty of Economics, Department of Marketing Sauletekio al. 9, 2 build, 819 room

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Graph 5. Web penetration-web commerce concentration map, 2003

Source: own design based on the Eurostat, 2003

Jerry Wind, Vijay Mahajan and Robert Grunert in their 2002 article in European Business Forum suggest that many Internet business plans are based on the enthusiasm for the potential of the technology. However, opportunities created exclusively by a new technology seem to be shaped by the following factors:

  • Customization. New technologies create the opportunity for customisation of product and service offerings and marketing messages, but sometimes consumers still want off-the-shelf offerings and mass messages. The challenge for companies is to strike the right balance between offering standardization and customization.

  • Community. Although the Internet creates opportunities for the development of virtual communities that offer greater anonymity and geographic reach, consumers still want to remain part of physical communities. The challenge for firms is to work across physical and virtual communities, and to balance the social and economic purposes of communities.

  • While new online channels are created, consumers want to combine these with existing channels to interact with companies anytime, anywhere. The challenge for companies is to create a seamless consumer experience across channels.

  • Choice tools. The technology creates opportunities for placing powerful tools for searching and decision-making in the hands of consumers. But sometimes, consumers still want human experts. The challenge is to offer the right tools to consumers and provide complementary expert support.

According to Jerry Wind, Vijay Mahajan and Robert Grunert, the power of the Internet was not revealed through a stand-alone, online world. Instead, it was demonstrated that integration of physical and technology-mediated experience into a coherent package in ways that make sense for the consumer could cause a greater effectiveness of online/technology-based offerings. The same bookstore could help find physical books on the shelves, but could also connect shoppers to the entire online collection through the same interface they use through their home computers. So, the technology should be built around the consumer, not visa-versa. The technology itself is only a part of the picture. The consumer should accept it and technology should find its place in the minds of consumers. A business model that deploys new technology may look good on paper, but if it does not create true value for consumers, it will not create value for the firm.

Apart from these general considerations of web-commerce obstacles, some applied research on barriers for web shopping been found. This sort of research is valuable and could serve as a help to web-business managers. In recent study on e-commerce, Gorm Kunoe (The Norwegian School of Management, 2002) defined the barrier as a relatively well-considered negative reaction of a complex nature to an e-commerce offer. Employing this definition, the barriers are more than temporary negative reactions to a single purchase offers. As a result of the Norwegian research, the following barriers were identified and verified, listed according to their importance:

  • Patience - the highest ranked barrier. Patience is related to the psychological state the user of a web site is moving into when s/he spends time waiting for a web page to open, and when s/he spends time navigating the web site. The research showed that a large majority of Internet users do not want to wait. Thus, the functionality of the website should be examined very closely in order to meet customer demand for easy and logical access.

  • Trust is the second ranked barrier. The insufficient safety of shopping on the Internet and using credit cards for e-commerce transactions could be the barrier to e-commerce.

  • Motivation was ranked in third place. In this case, motivation has a particular definition and means that the buyers want to see the products, they want to test and try them, and they are not sure about the quality they get. Furthermore, the security guarantee and money back guarantee are linked to the motivation factor and they are important for the web-buyers.

  • The “Internet maturity” factor could also serve as a barrier for web-commerce. Internet maturity has some connection with the patience factor and could be expressed at a level of irritation when web sites are difficult to navigate. Also, it relates to the speed with which people leave the site when it is found to be difficult to navigate. Thus, functionality of commercial websites is an important factor to increase the effectiveness of e-commerce.

  1. Discussion: what are the drivers of Internet development?

This paper did not aim to study the factors of the Web development. However, let’s end with the future. What are the drivers behind this technology, what are the observable, measurable, non-observable factors fostering the development of the Internet? They are numerous, both quantitative and qualitative.

Let’s start with the activity where the Internet is considered to belong –the knowledge economy. A knowledge economy is a networked economy in which information and communication technologies are a key part. Access to electronic communication networks and information technologies is a decisive factor in economic growth, the development of a knowledge-based economy, social inclusion and cohesiveness. On the other hand, development of information technologies is dependant on the overall level of economy - GDP growth and GDP intensity (per capita). The richer the society, the greater and the speeder innovations are. This mutual dependency between grown and technology which makes it difficult to discern which the dominant driving factor is.

The World Economic Forum, in its Global Information Technology Report 2001/02, ranks 75 countries on theirs readiness for a “networked world”. The ranking is driven by current network use and by enabling factors likely to influence future development of an information society. The enabling factors consist of network access (information infrastructure, hardware, software, support), network policy (ICT policy, business and economic environment), networked society (networked learning, ICT opportunities, social capital), and networked economy (e-commerce, e-government, general infrastructure). The United States, Iceland and Finland are the lead the network readiness index. In terms of ‘potential’ (enabling factors sub index), Finland is ranked highest followed by Sweden being the third. Estonia was ranked as the leader among the new Member States (21-24 rank).

Looking at other factors that determine Internet growth, one can see a clear relationship between GDP growth, GDP per capita and Internet penetration. This relationship, with a few slight exceptions, is linear and showing direct interdependence – the greater the GDP per capita, the greater the ratio of penetration of the Internet. Ratio of GDP growth and ratio of Internet penetration does not fit into the clear relationship.

Apart of economic indicators, the development of the Internet is affected by the attitudes of the population towards media in general. Societies with high ratios of TV and newspaper penetration have greater Internet penetration also. Thus, the Internet is not a substitute for the traditional media. Usage of the media most likely supplementing each other makes it targeted and professional.

Graph 4. Proportion of active population using a computer for professional purposes, in %, in 2002
Source: Eurostat, 2004
Recently, Internet has matured as a medium. It is the indispensable professional tool and has other social roles. In fact, numerous professional roles becoming impossible to complete without the Internet. In these situations, development of the Internet gaining another mode and speed – it is becoming somehow self-driven. In 2003, in EU-15 in average 10-20% of Internet users where using Internet for work – many of these indicated a use of the net at home for work, displaying the growth and importance of Teleworking. More than half of EU-15 employees see the Internet as a day-to-day technology that is now necessary for completing their work (graph 4). In these circumstances we talk that Internet may affect the value system of society as it penetrates the level of the underlying assumptions. We have the background to state, that because of the Internet, societies are gaining similar features and gaining connection through the values of the Virtual society of which many of their members are becoming a part.

Thus, development of the Internet is affected by the numerous listed and unlisted factors acting at a range of levels. We must start to research the power of the Internet in fostering its own development and development of the nations.


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1 The Internet technology was primarily invented in the USA military services. Around 1989, according to one sources, or some years later according to others, this technology was transferred to the public sector. The primary function of the Internet was to help scientists to exchange information.

2 Originally, cyberculture and research on the social effects of the Internet are not the sameness. Burnett and Marshall (2003) define cyberculture as an emerging area of study that focuses on the transformation of identity in an increasinglly virtual world. Silver’s (2000) understanding of cyberculture is broader. Concerning the stages of Web development and research in the societies, Silver’s definition of the stages is accurate.

3 The terms Internet, Web and Net are used interchangeably.

44 Issues of design and participation come together in the relatively new field participatory design, an approach that has been pioneered in Scandinavia. Participatory design considers the final users of the product as playing the critical role in design testing.

5 In the research, initiated by the National Telecommunications and Information Administration (USA) and called “Falling through the Net: defining the digital divide” (1999) the concern has been expressed, that the Internet is the privilege of the rich and divides the society into the information haves and have-nots. The conclusion has been made on necessity of the Government efforts to make the Internet accessible to the less financially advanced part of the society as well.

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