MANAGEMENT PERSPECTIVE

Subject: November 2001 ECMgt.com: New Dimensions for Growth and Evolution
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November 1, 2001 *4,300 subscribers* Volume 3, Issue 11
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New Dimensions for Growth and Evolution
Management Perspective
by Mitchell Levy, Author, E-Volve-or-Die.com

As today's leaders make decisions about tomorrow's growth, there are many factors at work in this new environment that will make a huge impact. Technologies such as wireless and portable computing will provide more ways to access the Internet, and will require companies to provide content accordingly. The world marketplace means greater demand for products and services, and companies need to figure out how to build businesses across geographic boundaries. We are faced with the prospect of much more growth over the next few years. Whether it happens slowly or quickly, we all need to be armed with the lessons we have learned so far to be better prepared to meet all the challenges of the brave new world.

Our Changing World:
In the wake of the recent events, businesses recognize the enormity of change and challenge we are facing. We are observing that the world is getting smaller, and the critical importance of understanding the economic, geopolitical, and historical components of building an integrated world economy. While external forces seem to be wrenching us all at once, we see continued opportunities for growth and prosperity, especially in an uncertain world. In this issue, we will review why we are optimistic.

Networked economies are all about integration; technical, legal, and logistic; and connecting the components of increasingly complex value chains. Pulling together the continents of North America, Europe, Asia, and the rapidly emerging networked economies of Latin America, Indonesia, and the Middle East will be a challenge. With shrinking IT budgets and growing needs for integration, we will have to do more with less. But motivation is high, and a review of our growing world shows that the continued growth of e-business is assured.

Asia: After two decades of weakening economic and political control, China is emerging as a leader in the East. Output has quadrupled over 20 years, and China now has the world's second largest GDP, 4.5 trillion dollars, almost half that of the United States. In 2003 China will have an estimated 300,000,000 users of mobile email enabled devices. One fourth of China's population, equal in total number to the US populace, is less than 14 years old, and by 2010 will become participants in the global economy. Wireless networks and mobile devices, including digital payments with smart cards; will be significant in consumer retail markets. Opportunities for business development and infrastructure to support an estimated 10 trillion dollar economy in 2010 are staggering.

Europe: While many countries in Europe have mirrored the United States in Internet user patterns, businesses have been much slower to adopt the integrated supply and value chain technologies prevalent in the US. Two populations of technology adoption clearly exist, with a 5 trillion-dollar economy in the European Union needing tighter integration. Network and process infrastructure demands have outpaced financial investment, and as the global economy recovers, Europe will be a strong market for technology growth and expansion. Currency, language, and legal and access issues are being addressed, and the juxtaposition of Europe to both Asian and American markets is a key strategic driver.

India - The fifth largest world economy, India has grown to a population of over one billion, with a third of the populace under 14 years of age. India's problems with poverty and illiteracy are widely known, but half the country is literate and has access to the new economy. India's GDP of 2.2 trillion dollars does not accurately reflect their position in the global economy; there are more programmers in India than in the U.S., a number that will grow three-fold over the next 10 years. As an educated youth force with technical aptitude matures, India will represent the world's largest pool of outsourced IT labor. In an era of distributed computing and opportunities for networked knowledge workers, India can become a tier one economy by 2010.

Africa - The opportunity of Africa, the largest continent in the world, remains elusive as decades of famine, civil unrest, the ending of the cold war and geopolitics affect over 800 million people. Africa represents 13% of the world's population but only 2% of GDP. Networked health care will be critical, e-learning and access to global media are essential.

North America - Including Canada and the United States, North America represents one third of global GDP. Over 80% of US small business are anticipated to have Internet transaction strategies by 2005, which translates to an additional 5 million connections to large suppliers engaged in B2B commerce. The economic impact of 3 trillion dollars in goods and services moving through integrated systems soon will launch a second wave of IT growth. The "tech wreck" of 2000-2001 is but a minor glitch in the global B2B rush as the world's most technology driven economy will lead in process-driven growth as well.

Central and South America - The second largest continent represents only 4% of world GDP, but it's full of small businesses with infrastructure and e-business needs. Like U.S. small business, Latin America will accelerate as wireless business networking and process integration becomes affordable. International trade represents a significant percentage of GDP in Brazil- the ninth largest economy- and significant manufacturing infrastructure resides in Latin America for large multi-national firms.

The Middle East - Nations with small populations never the less represent large economies in terms of energy, agriculture, and populations of skilled and talented engineers. Recent events would suggest that conflict is counter to business, but a better paradigm is to recognize that business always strengthens and fosters stronger and longer-lasting relations. The impetus to diversify from energy will lead many of the region nations to more rapidly adopt technologies of e-business integration and with it more stable global trade.

There is a strong correlation between Internet user adoption and per-capita GDP, which is really a reflection of technology penetration. An increasingly connected world in which one-third of the globe is networked puts demands on business infrastructure. What percentage of business will be online? Much of B2B growth will be driven by the end-user pull of over a billion new Web-enabled consumers. Given the above, strong e-business growth is anticipated for China, India, South Korea, Russia, parts of Europe and the Middle East. To make this happen, there are key drivers in technology and process infrastructure.

Trends and Dimensions for Growth:
Portable computing, mobile data, instant messaging and mobile commerce will push Internet devices to amazing numbers in just a few short years. Wireless computing may grow by 630% to 1.7 billion devices by 2005 (Accenture) - with no distinction between e-commerce and m-commerce. Portable devices will be the predominant mode of connection by 2003, when there will be 300 million mobile devices in China (eMarketer)

Global and multi-lingual content is rapidly changing the complexion of the Internet. Today 20% of Web content is non-English; a number that will grow to over 50% by 2005 as the number of Internet users increases to over a billion, with most of the growth occurring in Europe and Asia. This is a sign of success for global e-business, but it creates demands for document repurposing, publishing formats built on XML, and delivery to multiple device types.

The world marketplace place for commerce is rapidly growing. Over twenty five percent of global GDP results from international trade, estimated to be roughly 10 trillion dollars. This number will grow even more in developing economies, especially China and India, and swell as technology firms require global markets to support economic development.

Growth over the next few years will continue to be exponential. Over 80% of small business will have Internet connections by 2005, and America is bell-weather for the rest of the world. As big B2B matures in the enterprise and SME markets, continuity of process to small B2B and eventual touch points to B2C is needed to "wire the world".

Building business processes across geographical boundaries will be a major challenge and foundation and infrastructure will need to be developed to support flexible process. Multi-lingual formats, multi-currency payments, letters of credit, duty and export controls add complexity that domestic B2B initiatives have not had to grapple with.

Business documents need to be standardized - which means a fresh look at EDI, process integration across the supply and value chain, and merging accounting, purchasing, and logistical application formats across B2B. The elusive goal of Enterprise Application Integration (EAI) grows even more complex when we add the dimension of geography.

Marketplace and procurement portals will rebuild, after learning the lessons of process integration, buyer-supplier visibility, and most of all - liquidity. Marketplace failures will become lessons learned as more effective business models are designed and deployed

Secure email, new messaging and document formats, and digital signatures will merge as a front line for all business document based process, creating a more streamlined front end for purchasing and other Web enabled EDI activities.

The issues of computer viruses has reached epidemic proportions, causes billions of dollars in damage and lost productivity, and is totally unacceptable. Legislation must be written and enforced that addresses the intentional and malevolent nature of these crimes.

What lessons have we learned?
Over-building in 1999 - 2000 hurt a lot of companies. Exodus and Excite@Home were two prime examples. In building an e-business community, balance sheets matter, and extended debt can create fatal situations when anticipated revenues don't materialize.

Standards matter. Wrangling over Java, XML, and communications protocols is constructive within standards bodies and in initial development, but not deployment. Battles seen with Microsoft, Sun, Netscape and others aren't productive in the long haul.

Analysts can be wrong. The coming predictions of 2500 e-marketplaces, B2Bi and universal Enterprise Application Integration (EAI) never materialized; they represent development goals, not lofty growth. Measured investment in process might have been better than over-investment in technologies that didn't have true market-driven needs.

We're in it for the long haul. Wiring the world and building a digital climate for global e-business requires foundation infrastructure, universal connectivity and globally integrated process. This won't happen overnight, but the trends are clear. That's why we're so bullish on continued growth - and wiring the world for global e-business.

References:

About Mitchell Levy
Mitchell Levy, is President and CEO of ECnow.com (
http://ecnow.com), a training business service provider helping companies transition its employees, partners and customers to the Internet age through off-the-shelf and customized on-line and on-ground training. He is the author of E-Volve-or-Die.com, Executive Producer of ECMgt.com, an on-line E-Commerce Management (ECM) e-zine, Chair of comdex.biz at Comdex Fall and Chicago and the Founder and Program Coordinator of the premier San Jose State E-Commerce Management Certificate Program (http://ecmtraining.com/sjsu). Mitchell is a popular speaker, lecturing on ECM issues throughout the U.S. and around the world.

I hope you enjoy this eZine.
See you in cyberspace,

Mitchell Levy
Executive Producer, ECMgt.com <
http://ECMgt.com>
President, ECnow.com <
http://ecnow.com>
Founder and Coordinator, SJSU-PD ECM Certificate Program <
http://ecmtraining.com/sjsu>

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