Is E-Commerce Destined to Divide Us?

European Business Forum, Summer 2000 | Go to article overview

Is E-Commerce Destined to Divide Us?


Dot com millionaires. New business models. Productivity revolutions. The dramatic changes attributed to the internet are daily catalogued by the business and popular media, yet the longer term social and economic implications are in many ways unclear. In this issue EBF sets out to explore two, inter-related questions. Will the new economy narrow or widen the gap between rich and poor nations, and between the different regions of Europe? And what should governments and supra-national institutions do to encourage a thriving e-commerce culture among their citizens? We asked nine experts to tackle different aspects of these dilemmas and their answers provide a stimulating mix of optimism, gloom, and passionate pleading.

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We kick off with the celebrated management writer C. K. Prahalad best known for his ground-breaking work on core competencies with Gary Hamel. In this essay for EBF he draws on his experience of India and China to paint an optimistic picture of economic democratisation. Giles Alston, a European expert living in the US directs our attention to the emerging countries of Eastern Europe. He emphasises that widespread opportunity is indeed being created by the internet--but that it needs to be actively seized. Next comes Riccardo Petrella, a professor at the Catholic University of Louvain and advisor to the European Commission, who provocatively warns that a new system of global social apartheid will coalesce if we do not take action now. By contrast Renato Soru, founder and chief executive of Tiscali, one of Italy's rising young corporate stars, provides an upbeat contribution on the impact of previously deprived areas in the 'South'. Peter Hagstrom, from the Stockholm School of Economics, turns the spotlight towards Governments and national cultures with his thesis that 'seemingly innocuous Lilliputians' (Value Added Tax, phone charges, and payment security) are tying Europe down. The thesis finds an echo both in the contributions from Lutz Bohm and Alexander Scholz, Oracle consultants, who highlight the challenge faced by Germany in encouraging entrepreneurship whilst at the same time maintaining its famed social consensus, and the more philosophical approach of Henri de Maublanc, a French entrepreneur and leader of a prominent association of new technology companies (ACSEL). The French, he observes, are better at reflection than at exchanging information (the great opportunity of the internet) and effecting change. In between these articles Moira Siddons of PricewaterhouseCoopers gives a fascinating account of the confusing and contradictory national frameworks for taxing and regulating share options. She warns us that without remedial action talent may defect to the US.

Let's focus on the digital dividend

Conventional mental models may be an impediment to the diffusion of internet benefits to poorer countries.

One issue--the potential for a digital divide--seems to have mobilised politicians, academics, non-governmental organisations, and managers with surprising speed. The emerging consensus is that in the new economy, where access to knowledge is critical for economic success, the increasing importance of the internet will further accentuate the differences between the "haves" and "have-nots". The poor in developed countries (e.g. the United States) and poor countries (e.g. India, Bangladesh) will face an insurmountable structural disadvantage. This conclusion is based on three implicit assumptions:

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1. the poor cannot afford to buy the computers needed to be connected.

2. the infrastructure of these countries is so poor that a significant portion of the population cannot be connected, and

3. low levels of literacy will ensure that they do not derive the benefits of the new economy, even if they are connected.

Traditional notions of investment capacity and educational attainments dominate this debate. …

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