Europe embraces e-commerce
Associated Press
RAF CASERT Associated Press Writer
March 21, 2000
BRUSSELS, Belgium (AP) Slowly, the European Union is waking up to the multibillion-dollar e-trade sweepstakes.
Lagging behind the United States in many new technology sectors from e-commerce to Internet applications Europe does hold a coveted trump: it leads in the mobile telephone industryand hopes that will pay off handsomely in the burgeoning wireless Internet market. To reach such potential, Europe is busy catching the e-buzz.
Politicians are exhorting businesses to get aboard the e-commerce bandwagon, essentially the electronic vending of anything shoes, stocks, vacations, pension plans, mortgages, you name it.
E-businesses want politicians to cut tax and labor red tape so they can keep up with those free market Americans, who already own 20 percent of Europe's e-trade market through such companies as Amazon.com.
To help close the gap, the 15 European heads of government will convene Thursday for a two-day summit in Lisbon, Portugal, to discuss how to better embrace information technology, which analysts say promises jobs by the millions and solid economic growth over the next 20 years. ``Europe is not yet realizing the full potential of the Internet,' says Erkki Liikanen, the EU information society commissioner.
The gap is wide. Enter 100 European homes and you will find that 88 are not hooked to the Internet. In the United States, roughly half of all homes are online.
In a pre-summit letter, summit host and Portuguese Prime Minister Antonio Guterres, told his colleagues, ``Europe is lagging behind significantly (but) we have the conditions to define a new strategic goal for the next 10 years: to make the European Union the world's most dynamic and competitive economic area.'
To achieve that goal, the EU will need to build on the strengths highlighted by its Seville, Spain,-based Institute for Prospective Technological Studies, which found Europe to be strong in the mobile telephone industry, consumer electronics and on-board computing for autos.
The new technologies require new skills, new jobs and changes in social legislation that promise tough choices. Some EU nations cling to cushy social security systems that make for unresponsive labor markets. As a result, joblessness ranges from just about nothing in the Netherlands, Denmark and Luxembourg to double-digit unemployment in France and Spain. The labor markets will need to be increasingly streamlined.
And, the European Commission says, governments must do more to give tax breaks and other incentives to Internet and other companies that foster greater use of new technologies. The commission also says Europeans must become much more Internet-savvy and recommends that all schools be online by 2001.
The Lisbon summit will address these and other issues.
One obstacle is an aging population. By 2010, workers in Western Europe in the 55-65 age group will outnumber those aged between 16 and 25 years old.The Seville institute's report makes clear, however, it is swim-or-sink time if Europe is to keep up with the United States.
The stakes are huge. By 2010, half of all EU jobs will be in industries that either produce or use information technology, according to EU Employment Commissioner Anna Diamantopoulou.
But today, she says, ``Net access is not only much lower than in the United States, it is concentrated among higher income groups, among men, and in northern Europe.' Change is in the air, though. Dot-com companies are making inroads in the EU, and some are already reaping a bonanza.
``Our greatest expectations have been met and exceeded,' said Jean Zurstrassen of VMS-Keytrade.com, a Belgian online broker that went public in December. ``And this is only the beginning.' Zurstrassen's company had 4,500 clients at the start of 2000. He expects 15,000 by year-end. Compared to the traditional industries, e-business moves lightning fast in Europe. ``One year in e-commerce means about seven years in the rest of the economy,' said Peter Ploegaerts, business manager of Azur, a year-old Belgian online shopping company that is taking on such American goliaths as Amazon.com.
In 1999, the business-to-business, or B2B, side of global e-trade was worth an estimated $145 billion, with Europe accounting for 20 percent.
The independent information technology research firm Gartner Group sees Europe's B2B e-trade which cuts production, inventory, distribution and procurement costs reaching $2.3 trillion by 2004, or a third of worldwide e-business. The information industry's labor shortage is already acute, however. Germany and Britain two EU nations that have progressed furthest down the e-highway are lacking 60,000 and 20,000 e-workers respectively. |
