US Increases E-commerce Lead Over Europe 14/09/00 For the third consecutive year, the United States is leading the global e-commerce race in absolute terms, according to a recently released survey by Andersen Consulting. The annual study titled "Connecting the dots?" included interviews with senior executives in the U.S. and Europe to monitor the progress of e-commerce. The study shows in 1999, the US generated 67% of global B2B e-commerce revenues and 76% of global B2C e-commerce revenues compared to Europe with its 14% share of B2B and B2C revenues. Despite this lead, the survey reveals a significant decline in the number of US firms aiming for international expansion in their e-commerce initiatives. The study shows that almost twice as many European as US organisations are using e-commerce for geographic expansion. The multiplicity of languages, differences in regulation and infrastructure have made it more difficult for American companies to prosper in the European marketplace. But, the survey points to much subtler differences in culture and varying stages of development within European e-economies as an even more significant barrier. The study shows of the 60 US executives surveyed, only one-third said it is important to adapt their websites to reflect regional language and culture differences. The finding underscores an attitude of indifference by US companies to the complexity of the European market. The study also highlights that until recently, dot-coms were seen as the most active in e-commerce, but the dot-corps are now taking at least as big a role. Significantly, the report finds that the key driver of e-commerce initiatives is fear of competition. 75% of established European businesses say they are trying to keep up with competitors, and seeking to secure a strategic position in their industry. Furthermore, almost 80% of businesses report plans for exploiting further e-commerce opportunities, and 72% report that they have developed an e-commerce strategy. The survey also shows that around 72% of European firms now use e-commerce for sales and marketing, up from 53% last year; 47% of companies said they are using e-procurement, compared with only a few percent in 1998. There is continued usage across logistics, financial accounting, product development, human resources and payments, according to the study. According to Rosemary O'Mahony, Andersen Consulting's Managing Partner - Technology for Europe, Middle East, Africa and India, "Established businesses have ceased to be intimidated by e-commerce or star-struck by its pioneers. Certainly the last year has proven the advantages of strong brands, deep pockets, and managerial expertise". Some concerns remain, however, for established companies. The survey shows US firms as well as European dot-coms taking a much more entrepreneurial approach to e-commerce than many established European businesses. The study identifies clear advantages or "pockets of excellence" in Europe. Firms are very well positioned to reinforce their competitive edge with emerging technologies such as mobile telephony and digital TV. These technologies have begun to challenge the dominance of the PC as the medium for e-commerce. In this area, Europe (and Japan) lead the way but unless they can capitalise on that lead, Europeans could once again find that the business value of a technological advantage is lost to more dynamic competitors. The study identifies two substantially negative factors for the continued growth of e-commerce in Europe. These are an increasingly evident shortage of key skills, and a legal and business climate less favourable to entrepreneurs than that of the United States. "We're no longer talking about eBusiness so much as the 'e' inside business," said Vernon Ellis, International Chairman, Andersen Consulting and sponsor of the study. "It is vitally important that the continent's leading players, from business to government, understand that getting the 'e' right is not only a matter of utilising the power of information technologies but it's essential that this is linked to revitalised entrepreneurial spirit."