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Policy Barriers to Entry: Factors affecting e-commerce adoption and practice by Australian business

Policy Barriers to Entry: Factors affecting e-commerce adoption and practice by Australian business

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Policy Barriers to Entry: Factors affecting e-commerce adoption and practice by Australian business

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  1. Policy Barriers to Entry: Factors affecting e-commerce adoption and practice by Australian business Joanne Jacobs Brisbane Graduate School of Business Queensland University of Technology 1

  2. Scope of the presentation • Perceived versus actual barriers to entry for e-commerce • Australia’s e-commerce climate • Adoption of e-commerce • Online purchasing (B2C markets) • Adoption/diffusion of innovative technologies • Distribution, disintermediation and communications policy • Brisbane City Council case studies • Policy renovation 2

  3. Perceived v actual barriers to entry for e-commerce • Perceived • Security fraudulent transactions • Cost, ROI • Impact on existing markets • Attracting new markets • Actual • Trade considerations • Cost, ROI for ICT investment • Network reliability and servicing • Security of data transfer (equal for document transfer and transactions) 3

  4. Australia’s e-commerce climate • While 91% of SMEs own or use computers, only 79% are internet connected • 41% of small businesses using the internet for procurement (grown from 26% since June 2001) • 61% of medium sized businesses using the internet for procurement (grown from 49% since June 2001)(Source: Yellow Pages 2002 E-Business Report) • HOWEVER … Alternative studies have found that only 5% of Australian businesses are buying and selling online (Source: Budde Telecommunications, reported in Newsbytes, May 2002) 4

  5. Australia’s e-commerce climate (II) 5

  6. Online purchasing (B2C markets) 6

  7. Adoption/diffusion of new technologies • Dependent on information technology policies that influence adoption • Legislation enabling access • Industry policies on pricing, rollout and infrastructure maintenance • Budde (cited in Hayes 2002) maintains that adoption will not go above 5 or 6 million unless broadband technologies claim a mass market • Hooper (2002) regards Australia’s HDTV policies as ‘perverse’ 7

  8. Adoption/diffusion (III) 8

  9. Adoption/diffusion (IV) • New technology adoption/diffusion is likely to follow the Rogers (1983) s-curve of adoption • Some ambivalence for adoption likely to be based on ignorance of of the services and functions of the innovation • However in business sector, e-commerce adoption is more significantly affected by issues related to security data carriage and network reliability. • Where ignorance of services can be addressed through education campaigns, issues for business participants can only be addressed through relevant policy renovation 9

  10. Distribution & disintermediation • E-commerce designed to rationalise intermediaries in the supply chain • However, through digitisation of intermediary functions, there is increased reliance on the operability and cost of network supply • Negroponte (1995) notes that for taxation purposes, western economies are driven by atoms rather than bits • This attitude may have acted to obfuscate the need for policy change to promote e-commerce data carriage and network reliability • Those who control the networks (in terms of rollout and pricing), control the means for e-commerce adoption and profitability 10

  11. Brisbane City Council case studies • Surveyed 20 SMEs initially and expanded the study to include 80 businesses in the Brisbane metropolitan area • Based on objectives of: • Gathering references sources to study how business adapted to use of ICTs in conducting business activities • Developing a descriptive database of e-commerce executive strategies, and entrepreneurial characteristics of e-business enterprises • Contribution to literature on e-commerce adoption and implementation • Stories at: http://www.ourbrisbane.com/business/stories/ 11

  12. Brisbane City Council case studies (II) • Highlights of the study are that: • Costs of implementation frequently underestimated, and network provision estimates liable to change with industry pricing changes based on downloads • ROI for technology implementation cannot be generalised due to insufficient data (commercial in-confidence information) • Beyond customer relationship management issues, the most common ‘challenge’ identified by participants was in establihsing and maintaining the most appropriate network services package for the specific needs of the e-commerce enterprise 12

  13. Recommended policy change • Enforceable standard service level agreements by network suppliers • Price caps on broadband service provision and clear monitoring of varying pricing based on downloads • Consideration of security issues in communications policy, and facilitation of industry policy on standards security measures among network providers • Acknowledgement of alternative vehicles for e-commerce • removal of inappropriate barriers to entry in digital television legislation • accelerated planning for wireless communication spectrum allocation 13

  14. Contact details • Joanne JacobsLecturer, E-Commerce, E-Marketing & Communications PolicyBrisbane Graduate School of BusinessQueensland University of TechnologyPh: (+61 7) 3864 2065 Fax: (+61 7) 3864 1299Email: joanne@joannejacobs.netThis paper is available online at http://joannejacobs.net/pubs.htm 14