Graham Vickery, OECD

1. Lessons from e-business and household use:Balancing broadband and applicationsInternet use in the AmericasCIDE, Mexico City16-17 June, 2005 Graham Vickery, OECD

2. Presentation OECD Information Technology Outlook 2004 • ICT access and use by firms • ICT access and use by individuals and households Policy overview • ICT policies in OECD countries • OECD Council Recommendation on Broadband Development, 2004 • OECD Work on digital broadband content

3. Beyond the hype:From broadband access to efficient use Lessons from the OECD Information Technology Outlook 2004 “Broadband as utility: Striking the balance between content and infrastructure”

4. Firms: High ICT access, still working towards widespread efficient use • Wide diffusion of computers and Internet in government and enterprises of all sizes and all sectors in OECD countries. • Differences between large and small enterprises and sectors. • Strong cyclical rise in 2004 ICT spending. • E-commerce growth sustained – slower than initially expected. • Integrated ICT-enabled business processes -- depending on sectors, little implementation. • Mostly information search and supply and email. • Low integrated use along value chains and in R&D / production • E-business “divide” in applications between small and large firms.

5. E-business development phases • Phase 1: Website for company • Phase 2: Information on products and/or price • Phase 3: Orders received through the Internet or electronic networks • Phase 4: Delivery of goods /services and/or customer services • Phase 5: Couple electronic orders with ICT system (financial, logistics, marketing) • Phase 6: Couple with customer ICT systems (stock administration) CBS (2003), Dutch statistical office (percentage of firms).

6. High business connectivity but low e-commerce adoption, 2003

7. High business connectivity but lowe-business adoption, 2003 OECD based on Eurostat.

8. Impact of ICTs on businesses • ICTscan increase business performance and productivity. • Not automatic translation into effective use and positive impacts. • Innovation in organisational capabilities, improvement of human capital, are necessary conditions for maximising impacts. • Benefit-cost analyses rare. Few studies of broadband impacts, e.g. money saved, shorter cycle times, customer satisfaction, etc. • Obstacles: • Strategic clarity among top management to link e-business with business strategies • Organisational and product innovations • Skills investments • Metrics to assess ICT impacts.

9. b.Households: Increasing access and slowly moving to more complex applications • PCs diffused quite slowly in households. • Broadband diffusion rapidly, building on the installed PC base, and Internet diffusion • Lack of need or interest and costs main reasons for not equipped. • Internet use evolving, influenced by the supply of broadband and new access devices, and by educational attainment. • E-mail remains the principal activity. Focused information search, obtaining news, and personal banking / and browsing for information on goods and services is becoming important for off-line shopping. • “Use” divide is appearing now ICT access is widely available (educated, IT-using occupations, not necessarily age-related).

10. Some access divides persist Canada Nordic countries: Individuals with tertiary education accessing the Internet from home a quarter to one third higher than for primary educated (Nordic Council of Ministers, 2002). Gap even higher in other countries

11. Norway: catching up with broadbandBroadband subscribers per 100 Inhabitants. June 2004 provisional

12. Household usage Broadband diffusion and use of Internet. Canada 1997-2002 Percentage of all households • Most common activities: e-mail, information search. • Next: reading /downloading news, playing/downloading games and music, banking, window shoppingand buying goods and services. • Broadband Internet strongly affects type of use and intensity.

13. P2P: The only “successful” broadband application so far? OECD Information Technology Outlook 2004 based on BigChampagne.

14. Broadband infrastructure, applications and content. What role for policy ? “Broadband as utility: Striking the balance between content and infrastructure”

15. ICT policies in OECD countries Primary focus: • General ICT policy environment (visions, policy co-ordination). • ICT innovation (R&D support programmes and government projects). • Enhancing the infrastructure (broadband, electronic settlements, authentication and digital signatures, standards). Broadband has been a new focus, with growing policy interest in digital content (especially public sector content) and digital delivery. • Diffusion and use (ICT skills, government on line, diffusion). • Business environment (competition, IPRs). • Promoting trust (security of information systems and networks).

16. E-business and organisational capabilitiesChallenges and policy issues • Challenges:Integration of e-business into business strategies, integration with organisational, process and product innovations, investment in skills, develop metrics to assess impacts. • Policies:Widespread complex applications (e.g. SMEs), moving beyond basic connectivity and ICT readiness. • Digital content development and electronic distribution. • Regulatory and financial frameworks that enable online transactions (e.g. authentication, payments), foster trust/security. • Interoperability, standards and new forms of competition are new policy issues with global networked production.

17. Household access and useChallenges and policy issues • Supply-side measures to raise connectedness: • broadband private-sector rollout • e-government projects • digital signatures and trust measures • availability of government digital content. • Demand-side measures to enhance diffusion and encourage content provision, and education and social equity measures: • ICT literacy integrated into education • community access development or encouragement • disadvantaged socio-economic groups targeted • legal or financial measures to encourage ICT uptake.

18. OECD Broadband Recommendation 2004 • Competition / liberalisation in infrastructure, services and applications. • Technology neutral policy / reassessment of regulation. • Investment policies (supply and demand). • Private sector led - complementary government initiatives. • R&D encouragement. • Security / trust (privacy, consumer, cross-border). • Balanced regulatory frameworks - balance interests of suppliers and users. IPRs / digital rights management, encourage innovative e-business models.

19. OECD Work on Digital Broadband ContentBroadband content: What role for policy ? • High quality "always-on" broadband Internet services transforming industries and services that can provide digital content. • Stocktaking studies: • Business models for digital content and changing value chains • Drivers and barriers to growth, sector transformation and changing market structures, impacts on growth and employment. • Barriers are not mainly technological ones. 1.Mobile content 2. Scientific and technical publishing 3. Music 4. Online computer games 5. Public sector information

20. Issues for digital content development and delivery • Innovation and technology • R&D, innovation. Venture capital. Human resources. • Value chain and business models • Framework conditions. Convergence issues. Technology neutrality. Competition / co-ordination along value chains. Revenue sharing models. • Infrastructure • Broadband policies for coverage / access. Standards, interoperability (including DRM). (Micro-)payments, electronic signatures, authentication. • Business and regulatory environment • Adapting established regulatory frameworks IPRs, tax neutrality. • Public / government content (public sector information) • Government content availability. Digitising content. Education, health.