Transcript How to Build a Successful eCommerce Strategy

Building National and Regional
ICT Brands
How to Build a Successful eCommerce Strategy –
Lessons from Ireland
Presentation by:
Adrian Devitt
Forfás
02 December 2002
Role of Forfás

Advisory Board for Industrial and Enterprise Development and
Science, Technology and Innovation
Advises Minister for Enterprise, Trade and Employment on the
development of state policies to stimulate enterprise and
employment

Comprehensive view of Industrial Policy

Images of Ireland
OLD
 “Poorest of the Rich” – The Economist (1986)
 Characterised by high levels of unemployment
and outward migration
NEW
 The Celtic Tiger
 Silicon Isle
 Fiber Hub of Europe
Where Ireland has come from.
Irish GDP per Capita as a % of EU Average for 1960-99 (EU = 100)
140
120
100
80
60
1960
1973
Ireland
1986
UK
1999
How to Build a Successful eCommerce Strategy
– Lessons from Ireland

Acceptance of the Importance of the ICT Sector to Future
Economic Development

Establish where you are now:
 eBusiness
 eGovernment
 Information Society

Going Forward
 Develop Sectoral Strategies
 Promote a Positive eBusiness Environment
Acceptance of the Importance
of the ICT Sector to Future
Economic Development
Knowledge Economy Driving Growth in
Ireland - Now






GDP growth 9.3% p.a. over 1995-2001
Advanced/knowledge-intensive sectors:
 Contributed 45% of annual growth
 Account for 25% of GDP
 Contribute c. 65% of exports
Almost a third of the PC’s sold in Europe come from Ireland
ICT Trade Surplus 9% of GDP
Growing proportion of software distributed digitally
Development as world e-Business centre further evolution of
development process
The Future of ICT…
eCommerce Continues to Grow


IT and communications sectors of the world economy are
forecasted to grow at annual rates of 30-40% p.a. over the next
decade, or ten times the rate of the rest of the economy.
In spite of the downturn, B2C ecommerce continues to grow at a
39% CAGR and B2B ecommerce continues to grow at a 47%
CAGR.
B2B Growth
($ in Billions)
B2C Growth
($ in Billions)
$3,000.0
$500.0
$2,500.0
$400.0
$2,000.0
$300.0
$1,500.0
$200.0
$1,000.0
$500.0
$100.0
$0.0
$0.0
2000
2001
2002
2003P
2004P
Source: eMarketer aggregation from IDC, Forrester and Jupiter
2000
2001
2002
2003P
2004P
The Future of ICT…
U.S. Bandwidth Demand Growth %
100
90
80
70
60
50
40
30
20
10
0
90
79
70
62
50
30
33
35
40
55
42
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06
Source: BCG McKinsey/JP Morgan
Importance of ICT Leadership
Going Forward

Potential to accelerate economic development by:
1. Developing business service activities for next generation
Internet infrastructure, applications and services
2. Spawning ground for software and services companies
producing media and broadband products and services
3. Enhancing attractiveness as R&D center
4. Enhancing opportunity for regional development
5. Creating an Internet literate population
6. Creating an image of Ireland as world economic and technology
leader
Importance of ICT Leadership cont’d

Potential to accelerate business development:
 Innovation: Active e-commerce users on average report twice
the proportion of new products and of improved products in
sales
 Market Introductions: Use of e-commerce related to doubling
of sales of products new to market
 Market Share & Access to New Customers: Innovators with
successful new product launches twice as likely to be ecommerce users
 Skills: e-Commerce users associated with 20% or more
employees at degree level, compared with less than 10% for
non-ecommerce users
Source: Electronic Commerce and Business Change, ONS UK,
June 2002
Importance of ICT Leadership cont’d

Vast Improvement in Citizen Services






Health Care
Education and Training
Enhanced Family Life through Workplace Flexibility
Enhanced Delivery of Government Services
Lifeline for those with Disabilities
Better dissemination of Culture and Entertainment
Establish where you are now:
Three mutually reinforcing pillars,
1. eBusiness
2. eGovernment
3. Information Society
1. eBusiness
Ireland - Existing Centre for ICT Industry

300+ major electronics companies

80,000+ employed: equipment/software/services

1/3 of all exports

Ireland: world’s largest exporter of software products
 40% of Europe's PC packaged software market
 60% of Europe's business application software
ICT Companies Based in Ireland
EMC
Andersen
Novell
AOL
HP
eTrade
Siebel
Intel
Sun
Dell
Microsoft
Trintech
Baltimore
Bid.Com
Enba
Informix
EDS
IBM
Doubleclick
Iona Technologies
Smartforce
ICL
Viking
Ericsson
Nortel
Accenture
HP
eBusiness Enterprise Creation



Ireland was the best represented of the European case study
countries in the Deloitte & Touche Technology Fast 500 in
2001, with 10 listings per 1m population (i.e. 38) compared
with 2.5 for the second-ranked UK;
Ireland was the best represented of the European case study
countries in the Tornado 100 listing of European and Israeli
top high-tech companies, with 1.3 listings per 1 million
population compared with 1.0 listings for the second-ranked
Sweden;
Ireland has more NASDAQ listings per head of population
than the other case study countries (excluding the US).
Source: Forfas Research
eBusiness Foreign Direct Investment (FDI)
eBusiness Adoption by Ireland-based
“Existing” Enterprise”
2000
All Respondents/
All Respondents with > 1 PC
% of
Enterprise
2001
2002
% of Enterprise
% of Enterprise
Networked PCs
69%
72%
74%
Internet Access
69%
81%
84%
Own Website
34%
45%
55%
Narrowband Connection
69%
53%
40%
ISDN Connection
21%
38%
47%
Dedicated Leased Line
8%
6%
9%
Cable
0%
1%
1%
All Respondents with Internet
Access
Source: Enterprise Ireland
2. eGovernment
Key Government Initiatives
 The Revenue Online Service (ROS) which allows for the online
filing and payment (via direct debit mandate) of taxes, and online
access to personal account details and historical returns;
 The launch of the integrated portal for business access to
Government services (i.e., BASIS) in May 2001;
 Introduction of an eTender website;
 Agreement on an eProcurement Strategy, and planned rollout.
3. Information Society
e-Business development
Going
Forward
Environment Support Levels
Enterprise Development Levels
Security &
Trust
Legal &
Regulatory
Taxation &
Finance
ICT adoption
& use
Investment in
e-Business
Research &
Development
Growth
in numbers of
e-Businesses
Numbers
employed
E-business
Development
National
Infrastructure
E-Business
Market Size
E-Government
Support
Services
Skills
Education
National
Strategy
Number of
e-Commerce
transcations
Electronic
Business
Processes
E-Business
Export growth
Enterprise Development Levels
Develop Sectoral Strategies
 Existing Sectors
 New Emerging Sectors
Existing Sectors

Current Status
Sector
1.
2.
3.
4.
5.
6.
7.
8.
9.
Website
Pharmaceuticals
Engineering
Electronics
Consumer Food
Consumer Products
InfoComms
Finance/ Healthcare/ Software
Digital Media/ eCommerce/ Training
Total
68%
55%
76%
44%
61%
94%
95%
89%
67%
% of Sales
Achieved Over
Internet
2.3%
0.2%
0.3%
0.3%
0.2%
1.5%
5.6%
0.4%
0.7%
eBusiness evolution and
business benefit
Key Technology Trends
and Strategies Going Forward
Supplier
Integration
Web
page
INFORM
Intranet
/
Webmail
INTERACT
Full supply
chain
integration
Order
taking,
making
and
tracking
eBusiness
functionality
implemented
TRANSACT
INTEGRATE
New Emerging Sectors

For Example – Digital Content

A Strategy for the Digital Content Strategy in Ireland – Forfas –
November 2002. (www.forfas.ie)

Five Key Niches for Ireland
 e-Learning
 Games
 Wireless Services
 Digital Libraries
 Non-Media Applications
Promote a Positive eBusiness
Environment
Key Pillars of Success

Strong Enterprise Sector (Indigenous and Overseas)

National eCommerce Strategy

National Partnership

Skilled Labour Force

Competitive Regulatory Framework

High Specification R&D Programmes

Telecommunications
National eCommerce Strategy

Single Published Overarching Vision and Strategy (New
Connections)

Lead from the Top (eMinister) (Ms. Mary Hanafin, TD)

Dedicated Executive Agency - Information Society
Department (Information Society Commission)

Commitment to Investment (Information Society Fund)

Clear and transparent Schedule for implementation (Web
Based)

National and International benchmarking of progress (Forfas,
eEurope)
National Partnership

Five national partnership agreements between social
partners since 1987
 Wage restraint but also consensus on a wide range of
economic and social policy areas  National Competitiveness Council (NCC)
 Information Society
 Irish Council for Science, Technology & Innovation
(ICSTI)
 Expert group on Future Skills Needs (EGFSN)
 Advisory Committee on Telecommunications

Partnership with representative bodies and within public
administration to address business needs
Labour Force: High Skills and Flexibility

Schools IT2000
 There are at least 56,000 computers in Irish schools

Third Level
 Creation of 5,500 additional software places in the Universities

Expert Group on Future Skills Needs (€165 in further ICT Education)

Rank highly for the “fit” between its educational system with its high
output of third-level graduates in computer science and engineering
– and the needs of a competitive economy. (Source: The IMD World
Competitiveness Report)
Competitive Regulatory Framework

eCommerce Act 2000 enabling digital signatures

Copyright and Related Rights Act, 2000

Broadcasting Act, 2001

Communications Regulation Act 2002

Pro-competitive approach adopted by regulators
High Specification R&D Programmes

NDP allocation – Government has made provision for the sum
of around €2.5 billion in the National Development Plan (20002006)

Science Foundation Ireland (SFI) – government established
€635m fund over the seven-year period for investment in worldclass research in niche technology deemed capable of driving
economic competitiveness in the longer term
 ICT
 Biotechnology

Media Lab Europe - Digital Hub
Telecommunications
1. Enhanced International Connectivity

Forfas and others recommended a significant upgrade of
international connectivity

Agreed partnership with Global Crossing in 1999

Direct landing provides 160 Stms plus additional capacity and dark
fibre available

Pan-European, pan-America and Asia-pacific connectivity

Two dedicated telehouses & 16 internet data centres

360 networks completed link to Canada in 2001
Global Crossing
Ireland and Pan-European Network
Average Costs (US$/PPP)
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
M1020
64 k
2M
Greece (16)
Portugal (15)
Spain (14)
OECD Average
Austria (12)
Italy (11)
UK (13)
Belgium (10)
Iceland (9)
France (7)
Switzerland (8)
Sweden (6)
Netherlands (5)
Norway (4)
Luxembourg (3)
Denmark (2)
Ireland (1)
International Leased Line Price Basket
August 2002
OECD International Leased Line Basket - August '02
15
10
5
2. National Connectivity

€190m of co-financing funding allocated under National
Development Plan 2000- 2006

Objective:
“…to facilitate the benefits of the emerging new digital economy
being evenly spread across the Region and to contribute to
economic and social cohesion in the Information Society”

Local access infrastructure a priority

Deliver through Regional Assemblies and multiple partnerships

Two-thirds of co-funded targeted at Objective 1 Border, Midlands
and West Region (€140 million)
National Fibre Optic Network
Buncrana
Lifford
Letterkenny
Ballyshannon
Sligo
Dundalk
Drogheda
Lanesboro
Galway
Dublin
Shannon
Portlaoise
Roscrea
Arklow
Limerick
Wexford
Ballinesker
Waterford
Kilmore Quay
Cork
Towns Served
Options
Regional Broadband Plan

Objective – to deliver broadband of 5mBits to homes and
substantially greater to Business.

19 Town in Phase I

Key Parts of the Initiative:
 Building of Fibre Metro Loop around each center
 Provision of Co-Location space
 Infrastructure on an open access basis

Over the next 12-18 month 50,000km of networks will be
added to the National Stock as part of Phase I
Gweedore
Letterkenny
Buncrana,
Ballyshannon,
Donegal
Manorhamilton
Sligo
Ballina
Westport,
Monaghan
Carrickmacross
Carrick-on-Shannon
Claremorris
Roscommon
Castlebar
Longford
Navan
Cavan
Mullingar
Ballinasloe, Tuam,
Athlone
Loughrea, Gort
Galway
Birr, Edenderry
Ardee
Tullamore
Portarlington
Dun Laoghaire/Rathdown
Limerick
Thurles, Nenagh,
Roscrea
Clonmel
Carrick-on-Suir,
Tipperary, Cashel
Tralee, Killarney,
Listowel
Cork
Dublin City, Dublin South, Fingal,
Portlaoise
Carlow
Ennis, Shannon
Dundalk, Drogheda,
Kilkenny
Waterford
Dungarvan
Youghal, Fermoy,
Charleville, Mallow
Phase One Town in bold
Naas, Newbridge,
Kildare, Athy
Arklow, Wicklow
Enniscorthy,
New Ross, Gorey
Wexford
Conclusion: How to Build an eCommerce Strategy

The Future will be Different;
 International competition intensifying
 Recognize the Importance of ICT

Build partnerships – many factors necessary for Success;

Key Learning Points in Ireland
 Develop policies to the Three key pillars – eBusiness,
eGovernment, and the Information Society
 There is no single policy solution, however most successful
policy actions are simple ones
 In leading countries, Government show a willingness to
intervene, e.g., Telecommunications
 eBusiness complacency does not exist in the leading countries.