The Internet economy is alive and well. That's one of the findings of a study released this week, which examines how companies and consumers around the world are using high technology. The report is based on interviews with thousands of managers, business executives and consumers in 27 countries. The focus is on the state of electronic commerce.
"Actually, it's quite good, it turns out," said John Gantz, chief research officer and senior vice president of IDC, a Framingham, Massachusetts-based research organization that conducted the eWorld 2001 Survey. "You may not think so considering what is happening to the dot com stocks. But, the amount of goods and services that will be sold over the Internet this year will more than double and, in fact, within the next four years, it will grow by a factor of ten, up into the trillions of dollars worldwide."
Mr. Gantz says that half of businesses worldwide have their own Web sites. This means that approximately 50% of all businesses can compete globally. These traditional so called "brick and mortar" companies are now investing heavily in high technology.
"As we learned from our eWorld 2001 study, we learned that it is actually the brick and mortar companies that are doing the heavy lifting in the e-commerce revolution," he said. "Dot coms represent probably less than four or five percent of the total online Internet economy. Therefore, what's going on is that companies expect to increase their online revenues next year from four percent to seven percent of their total revenues. It sounds like a small percentage. But, if you add it up worldwide, that's five trillion bucks."
John Gantz predicts that the use of the Internet to conduct business will grow around the world. "The United States will grow considerably but, actually more growth will happen outside the U.S. in terms of Internet use as a percentage of their economy," he said. "Europe is catching up. Asia Pacific and emerging economies like Latin America will grow faster but they just don't account for that much of the economy, with the exception of Japan."
John Gantz and his colleagues say a revolution is taking place in how consumers use the worldwide web. Within a few years, they predict many will connect with wireless cell phones and other devices, rather than from the traditional personal computer.
"By the year 2005, 60% of the Internet users will be mobile users," he said. "Not all the time, but maybe some of the time. Our survey found very little activity going on right now in terms of supporting mobile users. Less than 10% of the sites could support mobile users. The U.S. is going to lag behind the rest of the world. By the year 2005, in the U.S., 35% of users will be mobile, but outside the U.S. 70-75% will be mobile. So, there's all this discussion of the mobile web, the new mobile web. People use it differently. The U.S. is falling behind or, as we say, we are stuck in the mud."
While Americans may lag behind in mobile access to the web, John Gantz says that in the years ahead English will still be the number one language on the net. "However, we think most sites will be multi-lingual," he said. "We find from the eWorld study that sites in non-English speaking countries, where English isn't the native language, are rushing to add English to their sites. At the same time almost 20% of U.S. sites support some other languages. In the U.S., the number one second language is Spanish, followed by Chinese."
The survey also looked at the question of web crime, finding that over 95% of American companies have had a security problem of some kind in the last year alone. In fact, the number one concern of information technology professionals is no longer performance related, but rather security of websites.
"We found in our survey sort of two things," said Mr. Gantz. "One is that consumers are not so worried anymore about doing business on the web. It is just so convenient and they've been educated that it is just as nasty to do it over the phone as it is to do it over the web. That's from a survey of more than 60,000 consumers around the world. What we did learn from eWorld's 2001 study of the businesses is that there is possibly a gap in terms of investment in security measures."
The eCommerce study forecasts that over the next four years more than $5 trillion will be invested in developing more efficient modes of conducting business on the Internet.