As in numerous other research projects of GKI Economic Research Co., the results of this survey are synthesized in one index, called the GKIeNET-Webigen Internet Economy Index. This sentiment index, representing the expectations of certain segments of the economy regarding the market impact of internet use and internet applications, is comprised of responses to four questions.
The questions relate to the following issues: expectations regarding internet sales and procurement, the impact of the internet on the market of the company, as well as the utilization of the internet in the present and in the future. In the second quarter of 2001, the GKIeNET-Webigen Internet Economy Index was at 15.1.
Although the index did not change significantly from the previous quarter’s 14.2, its components moved in different directions. Compared with the previous quarter, large and medium-sized companies in the industry and in business and miscellaneous services, as well as financial institutions became more optimistic, while businesses in the tourism sector have become somewhat gloomier with respect to their perspectives in the electronic economy. The expectations of retail companies did not change during this period.
The index is made up of the following figures in the individual segments (with the previous quarter’s values in parentheses): large and medium-sized corporations 19.7 (14.4), financial sector 31.5 (26.9), retail and wholesale 7.0 (7.3), tourism 2.2 (8.2). The figures for the individual categories reveal that financial institutions continue to be the most confident that the internet will be playing an increasingly significant role in shaping the market developments over the next period.
The following section outlines the most significant survey results pertaining to firms in the industry and in business and miscellaneous services. From this quarter on, small businesses (with five to fifty employees) are also included in the survey in addition to medium-sized and large companies (with over fifty employees).
The 750 respondents (450 medium-sized and large companies and 300 small businesses) represent the sectors under study at 17% both in terms of revenues and employment.
The GKI-Webigen Internet Economy Index has the following subindexes in the category of medium-sized and large companies (revenue-weighted averages):
According to medium-sized and large companies, the internet and the growing prevalence of internet applications have an increasing impact on their markets. At the same time, they are more open to the potentials of new technologies than in the previous quarter. A greater percentage of respondents believe that they will be able to take advantage of the opportunities available in the future. Expectations point to an increasing role of internet sales and procurement.
Based on the responses of small businesses, GKI-Webigen Internet Economy Index indicates that their expectations are more modest; they are less prone to use the internet for business purposes, and they attribute less significance to it in the near future. In this segment, the GKI-Webigen Internet Economy Index was at 2.5. All subindexes are lower than the corresponding figures in the category of medium-sized and large companies. The smallest difference was in the assessment of the future utilization of internet opportunities. The individual subindexes are as follows: internet impact subindex -18.4, internet potential subindex 20.4, e-sales subindex 0.6, e-procurement subindex 7.4.
55% of the responding medium-sized and large companies and 18% of small businesses reported intranet use. An additional 13% and 10%, respectively, indicated that they were planning to set up intranets within the next year or two.
Over 90% of medium-sized and large companies have excess to the internet. One-quarter of them provide internet access on every single computer of the firm. An additional 4% of the respondents intend to access the World Wide Web in the near future. Similarly, 80% of small businesses in the above mentioned sectors have internet access, while 10% of the sample plans to get an internet connection in the short term. (It is likely, however, that small businesses with internet access responded to the survey at a higher rate, suggesting that the actual rate is somewhat lower.)
In terms of connection types, the largest percentage of medium-sized and large companies access the internet via ISDN, dial-up (with modems) or leased lines. In the future there will be an increase in demand for services providing faster data transfer. Based on the expectations of medium-sized and large companies, internet connections via leased lines, cable TV and ADSL will increase faster than dial-up modem connections.
56% of the respondents have their on websites. The number of websites will continue to increase dynamically, given that 28% of the responding medium-sized and large companies have plans to set up their own websites.
Business content accessible via the internet focuses primarily on the introduction of the companies’ products and services. 60% of the firms with 50+ employees offer this type of content, while only 17% conduct sales over the internet. As low as 10% of the firms indicated that they allow customers to select various delivery options (location, time) over the internet, and an even smaller percentage of these companies, only 6%, offer the option of selecting payment conditions online.
Future development will focus on promoting the accessibility of all the above mentioned services and on expanding the content available on the internet.
Does the company offer perspectives for products or services over the internet (website, shopping portal, electronic marketplace, etc.) to
Medium-sized and large companies that are not using or planning to use internet applications attribute their reluctance to a large extent (31%) to the internet’s incompatibility with their company’s business activities. 11% of the companies are not implementing internet applications due to lack of interest, while 9% are hampered by security concerns.