Feature

Europe's hub could make the world spin

Executives believe Europe's superior mobile technology will let it overtake US e-businesses. Hazel Ward reports

Europe is well positioned to become the global hub for e-commerce. But unless European business leaders wake up to the potential of mobile commerce, they risk losing their strategic lead over the US market, an industry analyst has warned.

According to a survey published last week by Andersen Consulting, confidence is growing among European business executives that Europe has the potential to become the hub of a global network economy.

The study, entitled Connecting the Dots?, examined the attitudes towards European e-commerce held by more than 600 senior board-level executives across Europe, South Africa and the US.

Although the results make it clear that the US still holds a significant lead over Europe in terms of the acceptance of e-commerce, European players consider Europe to have the potential to take a lead, with some 60% of respondents indicating they believed Europe has the technology to take a lead in the global e-commerce scene.

According to Rosemary O'Mahony, managing technology partner at Andersen Consulting, Europe has "pockets of excellence", particularly in the fields of mobile telephony and digital TV, which puts the continent in a strong position to take a global lead.

"Europe today has about 18 months' lead over the US in technological terms, especially with the open GSM standard, digital infrastructure and the huge penetration of mobile phones," she said.

However, the survey found that only 58% of European business leaders are open to the opportunities presented by mobile commerce, compared with 78% in the US, and unless business leaders wake up to the potential of mobile commerce, Europe could jeopardise its lead, said O'Mahony.

"Europe is positioned very well to be a global hub for e-commerce but there is a growing interest in mobile commerce in the US. This should give the red flag to Europe that while we have the technological edge, we should not get complacent and believe that to be a permanent advantage," she warned.

According to the report, another advantage held by European businesses is that they appear to have a greater understanding of the complexities of international e-commerce than their US counterparts.

However, while O'Mahony conceded that European businesses seem to be more sensitive to the need to act locally, this could lead to complacency. "Businesses should be cautious in believing that the sheer complexity of the European market will be an insurmountable barrier for the US," she said, pointing to the success that companies such as Yahoo have had in penetrating the European market.

Also highlighted in the report was the increasing number of "old economy" firms entering the e-commerce arena. Until recently, it was the dotcom start-ups which were most active in the e-commerce arena but with the convergence of the "old" and "new" economies, more and more bricks-and-mortar companies have begun to take an active role in the e-commerce sphere.

Although online activity has, until now, largely focused on the business-to-consumer market, a recent surge in business-to-business activity has seen many old economy companies begin trading electronically. Evidence of this can be seen in the proliferation of online trading exchanges, such as Chemconnect, the chemicals and plastics industry exchange, which have enabled companies to trade with each other over the Internet.

Survey results showed that 47% of the respondents were using the Internet for online procurement, up from only a few per cent in 1998.


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This was first published in September 2000

 

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