1

Measuring eBusiness:

Definitions, Indicators & Surveys

Andrew WyckoffOECD

UNCTAD Expert Meeting

Measuring Electronic Commerce8-10 September 2003

2

Overview

• Definitions

• Model Surveys

• Current / Future work

• “Lessons Learned”

3

Growth in Internet host computers and majore-commerce developments

1 0 0

1 0 0 0

1 0 0 0 0

1 0 0 0 0 0

1 0 0 0 0 0 0

1 0 0 0 0 0 00

1 0 0 0 0 0 0 00

1 9 6 9 : In te rn e t / A R P A n e t

1 9 8 9 : W W W H T M Lla n g u ag e in v e n te d a t

C E R N

1 9 9 1 : N S F l if ts re s tr ic t io n s o nc o m m e rc ia l u se o f In te rn e t

1 9 9 3 : M o sa ic b ro w se rin v e n te d a t U n iv . o f I l l in o is

is re le a se d to p u b lic

1 9 9 4 : N e tsc a p ere le a se s N a v ig a to r

b ro w se r

1 9 9 5: D e ll , C isc o a n dA m a z o n b e g in to

a g g re s s iv e ly u se In te rn e tfo r c o m m e rc ia l

tra n sa c tio n s

N u m b e r o f h o s ts( lo g sc a le )

Ja n-8 2

Ja n-8 3

Ja n-8 4

Ja n-8 5

Ja n-8 6

Ja n-8 7

Ja n-8 8

Ja n-8 9

Ja n-9 0

Ja n-9 1

Ja n-9 2

Ja n-9 3

Ja n-9 4

Ja n-9 5

Ja n-9 6

Ja n-9 7

Ja n-9 8*

4

Mainframe and PC price indices

0

100

200

300

400

500

600

1982 83 84 85 86 87 88 89 90 91 92 93 1994

Mainframes

PCs

5

OECD IS Ministerial Milestones

• GII / GIS:

“Information Highway” 1996

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OECD IS Ministerial Milestones

• GII / GIS

“Information Highway” 1996

• WPIIS

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GII / GIS

• Definitions • ICT sector

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Share of ICT value added in business sector value added, 1999

0

2

4

6

8

10

12

14

ICT services

ICT manufacturing

%

Source: OECD, STI Scoreboard, 2001

9

OECD IS Ministerial Milestones

• GII / GIS 1996

• E-commerce 1998

• Identify, assess and monitor GIS

• WPIIS

10

OECD IS Ministerial Milestones

• GII / GIS 1996

• E-commerce 1998

• Identify, assess and monitor GIS

• WPIIS

• methodology and apparatus for measuring

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E-Commerce

• Definition

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E-Commerce

• Definition • Broad & narrow, nested definition

Narrow = orders over the Internet (payment and delivery can be off line) (including EDI / XML over the Internet)

Broad = orders over “computer mediated networks” (payment and delivery can be off line) (EDI, Minitel, EDIFACT)

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E-commerce Definition

• The Debate in 1999 / 2000

• Issues today

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socio-economicinfrastructure

technology infrastructure

access

"potential" usage

transaction/businesssize

nature oftransaction/business

Time

Level ofelectroniccommerceactivity

Readiness

Intensity

Impact

efficiency gains

new products, services,business models

changes in product/sectoral value chains

contribution to wealth creation

employment, skill composition,work organisation

1.8% (UK) 5.20% (UK)

0.40% (Canada)

0.40% (Australia, 1999-2000)

0.90% (Denmark) 0.94% (UK) 5.95% (UK)

0.70% (Finland)

1.04% (UK) 1.2% (USA, 4rd Q 2001)

0.40% (Canada) 1.1% (USA, 4th Q 2000)

0.10% (France, 1999) 0.20% (Austria) 1.4% (UK)

Web commerce

Internet commerce

Electronic commerce

Business sector

Retail sector

Business sector (excluding financial sector)

BROADER

BROADER

Official estimates of Web, Internet and electronic commerce transactions. Percentage of total sales or revenues.

0.40% (Italy)

(Sweden)13.30%

2.00% (Sweden)

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Private v. Public data

0

1

2

3

4

5

6

7

8

Denmark Finland United Kingdom

%

20002000 2000

2001 20012001

2002

2003

Official data Private source in December 1999

2002

2003

2003

2002

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• Definitions

• Methodologies

• ICT sector

• Business Use

E-Commerce

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OECD Model Survey of ICT Usage in the Business Sector

• General Information about ICT systems – Devices, networks and use

• Use of the Internet– Type of connection & speed, type of use

• E-commerce– Internet sales & purchases– Other computer mediated networks

• Barriers– Skills, cost, security,

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Business Access and Use of the Internet

0

20

40

60

80

100

%Businesses using the Internet

Businesses receiving orders over the Internet

Businesses ordering over the Internet

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Internet penetration by size class.

Percentage of businesses using the Internet

0

10

20

30

40

50

60

70

80

90

100

%

2000

1999

50-249 employees10-19 employees 250-999 employees

2001

5-9 employees

Source: OECD, STI Scoreboard, 2001

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Internet penetration by industry Percentage of businesses using the Internet, 2000

0

10

20

30

40

50

60

70

80

90

100

%United Kingdom Denmark Canada Australia

Source: OECD, STI Scoreboard, 2001

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OECD IS Ministerial Milestones

• GII / GIS 1996

• E-commerce 1998

• New Economy 1999

• Identify, assess and monitor GIS

• WPIIS

• methodology and apparatus for measuring

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24

ICT investment as a Share of GFCF

0

5

10

15

20

25

30

% of non-res GFCF

1980

1990

2001*

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Contribution of ICT investment to GDP (growth accounting)

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

90-95

95-2001*

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OECD IS Ministerial Milestones• GII / GIS 1996

• E-commerce 1998

• New Economy 1999

• Seizing the Benefits of ICT 2003

• Identify, assess and monitor GIS

• WPIIS• methodology and

apparatus for measuring

• Identifies role of skills, org. change

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High-skilled workers and ICT

Sweden

France

United States

Greece

Italy

GermanyDenmark

Belgium

Netherlands

United Kingdom

Austria

Spain

Finland

Luxembourg*

0

1

2

3

4

5

6

0 1 2 3 4

Share of high-skilled ICT workers in total occupations

ICT

inve

stm

ent (

%G

DP

)

Correlation = 0.68T-statistic = 3.04

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The sophistication of e-activity increases with experience in ICT use: UK

0

5

10

15

20

25

30

35

40

pre 1995 1995 1996 1997 1998 1999 2000

Year that company first started using ICT

Cu

rre

nt

lev

el o

f E

-ac

tiv

ity

Buy using E-commerceSell using E-commerce Buy & sell using E-commerce

Source: Clayton & Waldron, 2002

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Policy implications

• The business environment matters……in particular, the level and nature of competition.

• Investing in ICT is much more than hardware. It involves a constellation of complimentary investments.

• ICT is both a source and a tool for more innovation.

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Current / Future Work on eBusiness

• Addition of an eBusiness module to the model survey on Business Use of ICT

• Improved measurement of ICT investment by businesses (esp. software)

• Non-technical innovation (Organisational Change)

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Narrow e-comm

Broad e-comm

Business ICT Use

Business ICT Access

eBusiness Processes

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eBusiness processes identified as of common interest.

• Customer acquisition & retention• E-commerce• Finance, budget and account management• Human resource management• Product design & development• Order fulfilment and order tracking• Logistics (inbound & outbound) and inventory

control• Product service and support• Knowledge management

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Lessons

• be aware of the technology

• Stay close to the policy issues

• Be pragmatic (creatively use existing data resources and do easy things first)

• Proceed in a flexible (modular) way

• Feedback: stay open to revisions, breaks in series.

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Leverage scarce resources by partnering…

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A few ideas for applying the OECD model to non-OECD countries…

• Use available data sources

• Add a few “core” questions to existing business surveys

• Undertake a small survey of known performers

• Combine with other work (BR, LFS)