Although companies report benefits from using the Internet, it has been difficult historically to capture these impacts in economic models, particularly at the macroeconomic level. Many efforts have been made during the last decade to go beyond the Solow paradox,3 using macroeconomic or microeconomic approaches to better understand the role of ICTs in the economy.
Figure 4.21. Perceived benefits of conducting business over the Internet
1. Percentage of businesses reporting perceived benefits of conducting business over the Internet.
2. Percentage of businesses with 10 or more employees that have enacted sales over the Internet or the web during the reference period.
Source:Based on data from Statistics Canada and the Korean National Information Society Agency (NIA).
1 2 http://dx.doi.org/10.1787/888932694082
%
%
2001 2007 2006 2009
0 10 20 30 40 0 10 20 30 40 50 60 70
No benefits Reduced time to market Lower costs Reaching new customer Better co-ordination with suppliers, customers or partners
Customize services for loyal customers Keep pace with competitors Launch of new product/service Improve quality of customer service Increase customers and sales Overcome of market geographical limit Reach new customers Time saving/faster business processes Reduce business or transaction costs
Canada1 Korea2
The increasing availability of large micro-data sets and the possibility of linking them together have enabled numerous econometric analyses, highlighting the role of ICT as a general-purpose technology tied to productivity, growth and innovation. Recent research provides evidence of the strength of these links and relevant examples, based on micro-data from surveys. The Eurostat ICT impact project (Eurostat, 2008), for example, reveals that ICT usage is positively related to firm performance.
A recent analysis of inter and intra-firm diffusion of electronic commerce (both B2B and B2C) also reveals key ways in which e-commerce impacts are manifest. In particular:
large firms are more likely to adopt e-commerce than small firms, but do not necessarily use it more intensively; human capital plays an important role for the diffusion of e-commerce; innovative activities (products and process) of the company matter for both inter and intra-firm diffusion; and companies use e-commerce as a strategic tool to compete in their markets (Vicente and Lopez, 2009). Another recent work uses micro-data from both ICT business use and innovation surveys and applies the same model and assumptions to nine OECD countries. The study controlled for other determinants of innovation (e.g.R&D, firm size and skills) as well as for endogeneity, and found that ICT, and more specifically Internet use, may be acting as an enabler of innovation (Spiezia, 2011).
ICT intensity, measured by number of web facilities,4increases the probability of innovation both in manufacturing and services industries, and more significantly in the former than in the latter (Figure 4.22). In Spain and Italy, companies in the manufacturing sectors with three web facilities are 81% and 66% respectively more likely to innovate than companies with no web facilities.
Figure 4.22. Internet use intensity and innovation frequency, selected OECD countries
Increase in the probability to innovate as compared to firms with no web facilities
Notes:ICT intensity is measured as the number of web facilities used by a company. The indicator varies between 0 (the firm uses no web facilities) and 3 (the firm uses all web facilities). The number of web facilities is computed from (Yes/No) answers to the following question Did the website of your enterprise provide the following facilities during January 2006? (your enterprise as provider of Internet services): a) Marketing the enterprise’s products; b) Facilitating access to produce catalogues and price lists; c) Providing after-sales support. (Eurostat model for a Community Survey on ICT usage and e-commerce in Enterprises 2006).
Source:Spiezia (2011).
1 2 http://dx.doi.org/10.1787/888932694101 90
% 90
0 10 20 30 40 50 60 70 80
0 10 20 30 40 50
60 60
70 80
%
Web 1 Web 2 Web 3
Number of web facilities:
Canada Italy Norway Spain United
Kingdom
Italy Norway Spain Switzerland United Kingdom
Manufacturing Services
Conclusion
Information and communication technologies have developed and spread at a rapid pace during the last 15 years, and the digital landscape has evolved. Economic actors and businesses, in particular, have taken advantage of the opportunities provided by the Internet to change the ways they interact with each other and to improve efficiency. Many businesses have also entered into a restructuring process by which they modify internal and external business processes around the Internet, and where innovation is one of the key components.
This chapter has highlighted the widespread use of ICTs and Internet access among companies in OECD countries. Broadband access has dramatically increased with large companies now almost universally connected and small companies not far behind. In Europe, nearly half of all employed persons are connected to the Internet at work.
Companies are at different levels of e-business development. Many companies use the Internet for basic communication, but relatively fewer have integrated it into a full supply chain management system. One core reason is that large companies have the technology and skills to maintain complex systems, but smaller companies may not. For all the various steps previously mentioned, generally the more integrated the business process and information sharing, the lower the share of companies involved as compared to large companies.
Companies also increasingly interact electronically with public authorities. In 2010, on average, two companies out of three used the Internet to return completed forms to public authorities in the OECD area. Many governments are working to make as many administrative procedures as possible available on the Internet. In 2010, firms in the OECD area undertook nearly half of these procedures electronically.
E-commerce continues to grow and represents an increasing share of total business revenue. Although this share is still small in many countries, it is growing generally, as does the share of businesses selling and purchasing over the Internet.
As government policy makers work to improve business adoption of Internet technologies and services, they have put an emphasis on policies that expand network connectivity, improve skills and foster security. Chapter 8 focuses on policy priorities emerging from the 2012 OECD ICT policy questionnaire and provides specific information on policies related to each of these areas.
Notes
1. Data from the EU Community Survey covers EU countries plus Iceland, Norway and Turkey. For countries covered by Eurostat, the reference period corresponds to January of the survey year. For countries covered by the OECD ICT questionnaire, the reference period is that of the year surveyed.
For countries covered by Eurostat: Economic activities for 2011 and 2010 data correspond to the classification NACE Revision 2. The sectors covered are: manufacturing, electricity, gas and steam, water supply, construction, wholesale and retail trades, repair of motor vehicles and motorcycles, transportation and storage, accommodation and food service activities, information and communication, real estate, professional, scientific and technical activities, administrative and support activities, and repair of computers and communication equipment. Financial intermediation and insurance are excluded for the figures referring to the total economic activities.
For countries covered by the OECD ICT questionnaire: The reference period is that of the year surveyed. Economic activities for 2010 data correspond to the classification ISIC revision 3.1 with the exception of New Zealand, which used ISIC Rev. 4. All sectors are covered, including agriculture and forestry, fishing, mining and quarrying, and finance and Insurance.
For countries covered by Eurostat: Enterprises with 10 or more persons employed.
For countries covered by the OECD ICT questionnaire: Enterprises with 10 or more employees.
2. Data on e-commerce refer to the calendar year prior to the survey year. For Australia: Data are based on ANSZIC06. The following are excluded: general government, rest of the world, agriculture, forestry and fishing, public administration and safety, education and training, financial asset investing and superannuation funds, religious services and civic, professional and other interest group services, private households employing staff. For Canada: Data are based on NAICS 2007. The following are excluded: agriculture, fishing, hunting and trapping, and public administration and defence, compulsory social security, education, health and social work, other community, repair and personal service activities. For Israel: The following are excluded:
agriculture, fishing, hunting and trapping, and public administration and defence, compulsory social security, education, health and social work, other community, repair and personal service activities. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. For Japan: The following are excluded: public administration and defence, compulsory social security, education, health and social work, other community, repair and personal service activities. Businesses with 100 and more employees. For Switzerland: Agriculture, fishing, hunting and trapping is excluded.
3. The Solow paradox refers to the difficulty of measuring the productivity gains from computerisation in the 1980s. It was a time when the introduction of personal computers was helping drive business transformation but economists struggled empirically to link computers to productivity gains. Robert Solow famously stated that “You can see the computer age everywhere but in the productivity statistics”.
4. Web facilities are facilities provided by the website of the company (as provider of Internet services). They include:i)marketing the company’s products;ii)facilitating access to produce catalogues and price lists; andiii)providing after-sales support.
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