Internet sites and business issues relevant to Canadian processors and moldmakers (November 01, 2000)
Next generation already have Internet mindsetThere's no shortage of hype about the Internet and the "new economy", and a lot of impressive sounding predictions, but a single set of statistics recently...
Next generation already have Internet mindset
There’s no shortage of hype about the Internet and the “new economy”, and a lot of impressive sounding predictions, but a single set of statistics recently convinced me that the Internet as a communications tool will not soon fade into obscurity.
A report published in September by Ipsos-Reid (formerly Angus Reid Group) showed that over 70 percent of full/part-time students in Canada access the Internet either at school or at home. The global study, called The Face of the Web: Youth (1), also showed that Sweden and Canada lead the list in offering students access to the Internet from their schools.
According to Ipsos-Reid, more than nine-in-ten students who have Internet access in Australia, Canada, the U.S. and Sweden report using the World Wide Web to complete their school assignments. This is the next generation of business people, and they are already reliant on the Web for information needs.
Percentage of full/part-time students surveyed who access the Internet at their school or home.
Source: Ipsos-Reid, The Face of the Web: Youth, 2000.
Treat dot-com partnership like any other
As for business-to-business activity, beware and be savvy about who you choose to partner with. Some e-marketplaces have already folded, and a recent survey predicts that at least 86 dot-com firms will run out of cash in the next year. The study by Pegasus Research International (2), as quoted in The Globe and Mail (Oct. 12, 2000), found that of 339 U.S.-based Internet companies, 273 spent more money than they took in for the second quarter of 2000.
Two gentlemen from the Boston Consulting Group (3) advise that many e-marketplaces are destined to fail, and that businesses should consider the strengths of the dot-com’s business fundamentals before partnering. Tom King and Joe Magnet wrote in The Globe and Mail (Oct. 12, 2000) the prospective partners should pose four questions:
Why this? To win, an e-marketplace needs a solid business model that will generate real business, real profit and real value for its customers and investors.
Why us? Why are the partners better than anyone else in the space? Can they clearly point to assets that are critical to success, and that cannot be copied by competitors?
Why now? Balance the value of a hasty launch against the more complete business information that could be gathered with a bit more time.
What then? What’s the future growth opportunity for this business? To build an independent business, e-marketplaces will need to attract some very talented people, who will want this question answered.
The conclusion of King and Magnet is: Before you commit, as a partner or participant, be realistic and be clear on where, why and how you will win.
Canadian SMEs like the web too
Numbers for small business use of the Internet are similar to those for students. The SES Web Entrepreneurship Survey is a benchmark survey conducted every six months to track the electronic commerce activities of Canadian businesses with fewer than 50 employees (4). SES’s latest research indicates that the total number of Canadian SMEs using the Internet may be stabilizing at about 74 percent, but the intensity of e-commerce activity continues to increase. Forty-one percent of small business decision makers bought or sold something over the Internet between the spring of 1999 and spring of 2000. This is a 14 percent increase over the previous year.
E-commerce among Canadian SMEs
Value of activityFall 1999Spring 2000Change
SME Internet purchases$430M$410M-$20M
SME Internet sales$240M$350M+$110M
Source: SES Research, Web Entrepreneurship Surveys, 1999-2000.