Globalization of E-Commerce:
Growth and Impacts in the United States of America
Introduction
The United States (US) is the economic and commercial epicenter of the world. Throughout history, the US has set the benchmark for the establishment of new modes of conducting commerce, and the implementation of innovative business models. Their subsequent success or failure as evidenced by the performance of the economy has also served to dictate the pace of economies worldwide. The advent of Ecommerce has been no exception to that rule. Currently, the US, said to have ‘the most wired population on earth’ (Cahners In Stat, 2001) and to be ‘the best country to initiate Ecommerce’ (Forrester Research, 2000), sets the pace in the global realm of Ecommerce. From the inception of the Internet as a tool for communication and the advent of Ecommerce, the US citizens and their government have been at the forefront of this revolution. They have been passionate in the development of the infrastructure, building and implementing the business models, educating their communities and embracing the wave of societal change that the digital age has brought. By all measures this phenomenon is still in its very early stages, yet the transformation that it has brought to the US is profound and will likely be permanent. The Internet and Ecommerce have become integrated into most citizens’ daily lives as they have grown to depend on it for many forms of information, communication and commerce. The Internet has become a permanent part of the US society. The questions now center on where the US goes from here, what the future looks like for Ecommerce in the US, and how the US can best leverage the powers of the Digital Economy to promote growth and prosperity.
Although, there seems to be no question that Ecommerce is expected to play a vital role in the future growth of the majority of businesses in the US, there are significant barriers present that have limited its diffusion to date. Most significantly, the US economy’s current downturn is slowing the trend toward the adaptation of Digital Age Ecommerce models. Online consumer spending growth is falling short of projections of a year ago. The death of many dotcoms has caused an air of skepticism on the part of investors and consumers. Furthermore, the lack of common protocols and platforms such as EBXML has caused B2B Ebusiness exchanges and marketplaces to fall far short of achieving widespread implementation, with resulting momentum loss in the B2B sector. These barriers are compounded by the US’s laggard position in the wireless communication sector. The position is exemplified by a recent announcement by the FCC that the release of 3G wireless spectrum capabilities will not be available until 2004. 3G is expected to be the new standard in wireless communication and commerce. This development puts the US well behind many Asian and European countries that are currently in the process of rolling out these capabilities and are firmly entrenched in the use of wireless technologies as Figure 0 shows.
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MCGANN, KING AND LYYTINEN/GLOBALIZATION OF E-COMMERCE
Dec 00
Jun 01
Dec 01
Total
455.1
550.1
646.5
Arab States
10.4
13.9
17.3
Asia Pacific
133.7
180.4
226.1
Africa
10.8
13.3
16.6
East Central Asia
2.2
3.2
4.1
Europe
281.3
317.1
354.3
Russia
2.3
3.6
5.7
India
3.1
4.1
5.4
North America
9.6
11.6
13.5
South America
1.7
2.8
3.5
Figure 0 – Wireless Subscribers Regional Breakdown
All figures are in Millions. Source: EMC World Cellular Database.
Although these barriers are significant in the short term, projections for the future of US Ecommerce diffusion are positive. Taking into consideration its strong demographic traits, growing level of online consumer spending, robust IT/Telecom infrastructure, relatively strong economy and businesses’ intent to adopt sizeable long-term Ebusiness strategies, the US is positioned best to maintain and expand its leadership in global Ecommerce.
This paper will use the following list of drivers and inhibitors as the basis for analysis of US Ecommerce in the context of an overview of the US National Environment; its inherent characteristics and their propensity to promote Ecommerce; the Governmental Policies that serve to enable the diffusion of Ecommerce; the level of Ecommerce Readiness that the US has attained through its infrastructure and societal characteristics; the resulting level of Ecommerce Diffusion and finally the Social and Economic Impacts that Ecommerce has had to date and is expected have in the future.
US Ecommerce Drivers
1. Demographics such as high gross domestic product and large population
2. Favorable long-term economic environment for growth in a free economy
3. Telecom infrastructure that makes the US the most wired country in the world
4. Digital Divide narrowing
5. Highest Internet user population on the world
6. Ubiquitous availability of broadband access for both consumers and businesses
7. Governmental support of the emphasis on Ecommerce growth and the Internet as a learning tool in schools
8. B2B and B2C revenue expected increase significantly over the next 5 years
9. Expanding of infrastructure expected taking place to support the advent of new B2B business models
10. Wide use of credit cards for consumer purchases
