1 Policy Barriers to Entry: Factors affecting e-commerce adoption and practice by Australian business Joanne Jacobs Brisbane Graduate School of Business Queensland University of Technology

2 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

3 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)

4 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)

5 Australia’s e-commerce climate (II)

6 Online purchasing (B2C markets)

7 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’

8 Adoption/diffusion (III)

9 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

10 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

11 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:

12 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

13 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

14 Contact details  Joanne Jacobs Lecturer, E-Commerce, E-Marketing & Communications Policy Brisbane Graduate School of Business Queensland University of Technology Ph: (+61 7) Fax: (+61 7) This paper is available online at