The Internet and its likely Impact upon Society, Business and the EconomytwinIsles.dev - also available as a PDF eBook
8. OpportunityCyberspace means business is no longer constrained by physical distance. The Internet provides access to a potential global audience of over 600 million, which is growing daily. Savings in overheads will be made as retail outlets and office space become redundant. Many more workers will be freed from the daily drudgery of commuting and office politics as home working becomes increasingly widespread. In this respect technology is acting as a liberator, enabling a return to the more natural cottage industry of the pre-industrial age. The UK government report Teleworking in the UK states that "the total number of teleworkers in the UK in spring 2001 was 2.2 million, or about 7.4 per cent of all in employment." It found that "since 1997 the number of teleworkers has increased, on average, by 13 per cent a year." It goes on to make international comparisons and of the USA states "it is generally recognised that teleworking developments are some years ahead of the UK and the rest of the EU." The report uses the Labour Force Survey definition of teleworkers as "people who do some paid or unpaid work in their own home and who use both a telephone and computer." Home, or tele, workers may be either employees or self-employed freelance workers. In both cases the arrangement is beneficial both to the individual and their employer/client. Where technology enables a job to be done remotely it is sensible that it is done so, thus saving both on corporate real estate costs and on commuting time, fuel and pollution. There is likely to be increasing outsourcing of peripheral functions (I.T., cleaning, enquiry handling etc.) by corporations enabling more focus to be applied to key business areas. The concept of the "job-for-life" has all but disappeared from most industrialised nations and that of the salaried employee is increasingly becoming an anachronism. An hourly paid employee is actually being rewarded for making a job take as long as possible! The successful information age corporation will typically have a flatter structure in order to facilitate rapid change. It will also utilise temporary, "virtual" teams, formed to meet the requirements of a specific project and disbanded on its conclusion, in the recognition that no two project's requirements are the same. In an earlier era being on the payroll of an established firm may have bought employee loyalty, but since continuing employment is no longer guaranteed so staff mobility has increased. The new medium provides unprecedented opportunity for small operators. Whittle writes "The web site of a small company fills just as much of an individual's screen as the web site of a multi-national conglomerate". 'Net shapers such as Yahoo, Netscape, Amazon and even Microsoft all started small. For those that can best innovate new business models the potential rewards of the information age are great. The very survival of those that simply ignore the challenge is in doubt. 9. AdvertisingMany providers of valuable free content on the web derive most or all of their revenue from advertising. According to content and media analyst Beauvillain, popular search engine Yahoo! "gets 90 per cent of its revenues from advertising". Banner advertising involves sites making a small area of their page available to other sites in return for payment, or a reciprocal arrangement. A particularly irritating variant involves the use of JavaScript to spawn a multitude of regenerating pop-up windows upon loading a particular page. A form of marketing unique to the web is the affiliate program. First introduced by Amazon, it involves links to a company's site being posted on numerous other affiliate sites. For example, a photography website may link to Amazon (as a supplier of photographic books), photographic stores, processing houses etc. When a sale arises from one of these links the owner of the affiliate site earns commission. Corporate websites are advertisements, but the most successful offer valuable content alongside the sales pitch e.g. a supermarket providing free recipes. Whittle predicts a blurring of the distinction between information and advertising in Cyberspace along with users being able to determine what kind(s) of advertising they are subjected to. The most controversial form of Cyber advertising is spam, the e-mail equivalent of direct (junk) mail. The 'net makes it easy and cheap for advertisers to mail millions of recipients. Programs trawl Cyberspace collecting e-mail addresses, which are traded on huge lists. The result is that anyone who has published his e-mail address is bombarded with worthless messages like: Sell 1 million products on your website. to quote but a few examples from my own mailbox. Every such message has to be transmitted and then downloaded before it can be discarded, given the number of recipients that implies a huge amount of wasted time. Many e-mail services such as Yahoo and Hotmail now offer "filters" to automatically delete such messages. 10. New strategiesPeter Small, a former electronic system design engineer and fashion entrepreneur, proposes a radical new strategy for the e-business. Small likens recent developments in information technology to the invention of machines, which led to the industrial revolution, and suggests we are currently in the transition period between the industrial and information ages. Small believes methodologies which were successful in the industrial age are no longer applicable due to the inherent unpredictability of rapidly changing technology. "It is not just that there are new rules or that some of the rules have changed. The new rules which apply in the digital world of communications and e-commerce are sometimes the exact opposite of the proven and accepted dogmas which apply in the conventional world". He goes on to suggest a process of evolutionary design as an alternative to traditional planning. In this model a business develops and changes in response to the market, technological advancement, user feedback etc. Small describes the limitations, in the information age, of the traditional managed team operating as part of a rigid hierarchy. Instead he proposes the concept of temporary, virtual teams, brought together by an initiator, someone able to "identify a win-win situation where cooperation can produce benefits" and "produce enough evidence that profits will result from [the] proposed cooperation". Such teams aren't "held together by rules, but by benefits of mutual advantage." Of the Internet, Small states "It isn't about technology, it is about communicating with people". The 'net thus provides the perfect environment for the formation of virtual teams. 11. Digital ContentThe ease with which digitisable material may be disseminated has inescapable consequences for the creators and rights-owners of such material. That which may be digitised may be copied and re-copied an unlimited number of times without degradation and may now be distributed, digitally, by anyone, from anywhere, to the world. National copyright legislation is struggling to catch up with the technological reality of the information age, and in any case such efforts may be in vain given the ease with which digital content may be switched from server to server, from one side of the globe to the other, in seconds. The Internet is effectively beyond any individual government's control. The rise of the Internet has also witnessed the development of the open source software movement. Open source software is made freely available by its creators for others to use and modify as they see fit, with the caveat that any modifications made also become open source. Quality open source products include the Linux operating system and StarOffice. Alongside the open source movement, software and other digital material piracy has thrived. Latest versions of top software programs and new releases from major recording artists are available for free but illegal download shortly after (or even before) they arrive in the shops. It is interesting to observe that in the educational world the renowned Massachusetts Institute of Technology is making its course materials freely available under its OpenCourseWare pilot. It is unclear as to whether its motives are purely philanthropic, or whether it intends to generate income through charged professorial support. In the extreme there will be no incentive for the production of creative or intellectual property other than the kudos of doing so. Alternative scenarios include the free dissemination of content as a marketing tool for charged support, content producers being remunerated by high volumes of micro-payments, or global laws covering the transmission of bits from, to and via anywhere. Aside from the unlikelihood of the required universal cooperation required for the latter, even if it were to exist there remains a question over the practicality of enforcing such laws given the widely distributed nature of the Internet and the availability of peer-to-peer technologies such as Napster, now acquired by Roxio, which enable thousands of users to share the contents of their hard disks with one another. 12. ChallengesFor the full potential of e-commerce to be realised a number of challenges
remain to be overcome. E-commerce currently offers secure server and encryption technology as a solution to the security risks associated with transmitting data through Cyberspace. Encryption involves encoding information into a form that only the intended recipient can interpret. The commonly used public key encryption involves two keys for each user; a public one, made freely available, and a private one known only to the user. Sensitive information (e.g. a credit card number) is encoded using the intended recipient's public key before transmission, even if intercepted by a hacker it is thus useless without the corresponding private key [Whittle]. Whilst it is certain that security technologies will continue to improve, it is at least, if not more, important to reassure consumers that the online transactions in which they are engaging are secure. An informative and easy-to-read explanation of a site's security features forms an important part of its promotional strategy. Over time it is likely there will be a shift in cultural perception and that online shopping will be as natural as buying across the counter. Every Internet connection may be used just as easily to transmit as to receive, and the audience of any such transmission is, potentially, the world. This dictates the need to be more rigorous in evaluating the integrity of information found on the Internet compared to more traditional sources. The ease with which individuals may represent themselves misleadingly also gives cause for concern. Before entering a credit card number consumers demand reassurance they are dealing with a legitimate supplier that will meet its side of the bargain rather than a confidence trickster operating an online fraud. Digital certificates, issued by a trusted third party, may provide authentication of an online trader's identity. Consumers are likely to be more willing to deal with well-established names, either those with a familiar physical presence or with everyday names such as Amazon [http://www.amazon.com], or with companies at the very least having a physical presence from which damages could be sought if the transaction is not fulfilled satisfactorily. Closely related to the issue of security is that of privacy. Quoting the 8th GVU User Survey, Fleming states "Privacy is second only to security in most shoppers' minds". The process of requesting and storing personal information is one where the interests of site providers and visitors are seemingly at odds. Web users are naturally concerned about the potential invasion of privacy associated with providing information online. Visitors to bricks and mortar stores are not asked personal questions when making purchases, let alone browsing. The provider wishes to gather data to more effectively understand his visitors. This may be for purposes of providing more appropriate content or displaying targeted advertising. Some e-tailers, such as Amazon, are able to make recommendations based upon customers past purchasing patterns. The inability of individual governments to control the Internet means the medium is used to disseminate unsavoury material such as pornography, racial or religious bigotry and libellous statements. It is also used as a communications conduit with relative impunity by criminals, terrorists and others with less than wholesome motives.
All information correct and links valid at
time of writing, Dec 2002. |