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

Australian business

Joanne JacobsBrisbane Graduate School of BusinessQueensland University of Technology

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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

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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)

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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)

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Australia’s e-commerce climate (II)

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Online purchasing (B2C markets)

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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’

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Adoption/diffusion (III)

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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

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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

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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/

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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

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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

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Contact details Joanne Jacobs

Lecturer, E-Commerce, E-Marketing & Communications PolicyBrisbane Graduate School of BusinessQueensland University of TechnologyPh: (+61 7) 3864 2065 Fax: (+61 7) 3864 1299Email: joanne@joannejacobs.net

This paper is available online at http://joannejacobs.net/pubs.htm