EITO 2002

Presented by

Bruno LamborghiniChairman of EITO

EITO 2002

„Change has changed. No longer it is additive.

No longer does it move in a straight line.

Change is discontinuous, abrupt, seditious!“

(Gary Hamel)

Major factors and trends in Europe

On the negative side

Economic slowdown and dotcom bubble

Heavy 3G licence fees cutting or delaying carriers investment programmes

Delays in availability of GPRS and 3G, coupled with relative saturation of the GSM market

Pricing / tariff competition squeezing revenues streams

Low market acceptance of ASPs and E-marketplace models

Ongoing skill shortage hampering E-business development

Major factors and trends in Europe

On the positive side

From dotcom euphoria to real E-business for „bricks & mortar“ companies

Increasing adoption of Internet-centric solutions for E-business

Integrated services moving from back-office into front-office operations

Unmetered Internet access favouring consumer and professional usage

Growing mobile data expectations

Broadband (ADSL and WLL) diffusion driving Internet / multimedia applications and services

E-government programmes notably at local community level

World-wide ICT market growth by region,2001-2003, in %

5,1 5,4

7,8

0,5

5,1

9,4

5,3

7,67,3

8,79,3

13,8

4,4

6,6

9,8

0

2

4

6

8

10

12

14

16

Western Europe USA Japan RoW World

2001 2002 2003

Source: EITO 2002 Market value 2002: 2.442 billion Euro

Western European ICT market actual growth by segment, 2001-2003, in %

Source: EITO 2002 Market value 2002: 678 billion Euro

-4,4

-1,7

4,5

8,08,6

10,8

-0,6

3,1

8,79,5

6,7 6,4

-6

-4

-2

0

2

4

6

8

10

12

Computer hardware

Software &IT services

Telecommunicationsequipment

Carrier services

2001 2002 2003

Western European ICT market annual growth, 1993-2003, in %

5,1

2,0

8,7

5,6

9,3

7,98,5

6,7

8,08,6

12,7

10,1

13,4

10,8

14,5

12,1

6,4

3,9

5,85,1

6,8

8,8

0

2

4

6

8

10

12

14

16

1993/92 1994/93 1995/94 1996/95 1997/96 1998/97 1999/98 2000/99 2001/00 2002/01 2003/02

TLC IT

Source: EITO 2002 Market value 2002: 678 billion Euro

Western European IT market growth by country,2002-2003, in %

Market value 2002: 341 billion EuroSource: EITO 2002

2,9

7,4

5,9

9,3

7,1

10,3

6,8

10,2

6,6

9,4

5,6

7,7

2,0

7,2

5,1

8,8

0

2

4

6

8

10

12

Germany France UK Italy Spain Benelux Nordic WesternEurope

2002/2001 2003/2002

Western European TLC market growth by country,2002-2003, in %

Market value 2002: 337 billion EuroSource: EITO 2002

5,6

9,1

5,75,4

4,0

5,65,0

6,26,8

6,1

8,9

6,8 7,07,3

5,8

6,8

0

1

2

3

4

5

6

7

8

9

10

Germany France UK Italy Spain Benelux Nordic WesternEurope

2002/2001 2003/2002

Western European Web users by country, 2000-2005, thousands

Web users: individuals who access the World Wide Web at least once in every three months.

Source: EITO 2002

Western European Web buyers vs. Web users

Web users: individuals who access the World Wide Web at least once in every three months.

Web buyers: individuals that have conducted Internet commerce within three months.

Source: EITO 2002

Internet commerce in Western Europe, billion Euro

Source: EITO 2002

Internet commerce in the top 5 European countries, 2001-2005, million Euro

Source: EITO 2002

Stages of E-business development

Source: EITO 2002

EITO 2002 special studyEntering the UMTS era

Main outcome (Western Europe):

Mobile subscribers: end 2001: 291 million; end 2006: 401 million

Mobile Internet users: end 2001: 139 million (78% SMS only); end 2006: 203 million (61% GPRS-based and 28% UMTS-based)

Mobile terminal shipments: GPRS 80% from 2004-05; UMTS: 3% in 2004 to 42% in 2006

Mobile Internet-related services: 2001: 10 billion Euro (mainly SMS); 2006: 75 billion Euro (47% of total mobile service revenues)

Mobile internet content / services applications:

2006: 52% entertainment

19% communications

17% business services

9% transactions

Western European mobile Internet users by bearer service, millions

Source: EITO 2002

Western European mobile Internet service revenues, million Euro

Source: EITO 2002

Western European mobile content and services revenues by segment, million Euro

Source: EITO 2002

Mobile data value web

Source: EITO 2002

EITO 2002 special studyE-government and the business environment (1)

Main outcome:

Business interest in conducting online transactions with government for competitiveness improvement

Online tax as most important G2B service (other areas: procurement, employment, information) – complete G2B transactional services are rare

G2B (20%) less developed than G2C (31%) and G2G (35%)

G2B most developed in Germany, France, Denmark, Portugal

Main drivers: low costs, speed, pressure of government initiatives, ease of use

Main inhibitors: slow take-up of digital signature, security, costs, organisational barriers

Main question to government: costs, effective commitment, leadership, staff resources, trust

EITO 2002 special studyE-government and the business environment (2)

Main G2B services:

Social contribution for employees

Corporation tax: declaration, notification

VAT: declaration, notification

Registration of a new company

Submission of data to statistical offices

Customs declaration

Environment-related permits

Public procurement

EITO 2002 special studyE-government and the business environment (3)

Main challenges:

Security (20%)

Digital signature (20%)

Legacy issues (15%)

Lack of infrastructure (10%)

Lack of broadband (5%)

Proportion of GDP spent on public administration ICT compared with EU mean, 2000

Source: EITO 2002

ICT spending on public administration as percentage of GDP, EU member states, 2000

Source: EITO 2002

Proportion of public administration ICT expenditure on different E-government areas in EU member states, 2000

G2C31%

Non-specific14%

G2B20%

G2G35%

Source: EITO 2002

Public administration ICT expenditure by business application (percentage), 2000

Source: EITO 2002

EITO 2002 special studyThe impact of ICT on sustainable development (1)

What is sustainable development?

„A dynamic process which enables all people to realise their potential and

improve their quality of life in ways that simultaneously protect and enhance

the earth‘s life-support systems.“

The „triple bottom line“:

Economic sustainability: economic growth without making undue demands on social or natural resources

Environmental sustainability: minimising impacts and building / safeguarding natural resources

Social sustainability: building and not undermining social equity

EITO 2002 special studyThe impact of ICT on sustainable development (2)

Economic sustainability and ICT

Impact and opportunities:

1st order: ICT market growth, ICT investment, new companies, boom and

bust

2nd order: Business applications, new opportunities for SMEs, financial

markets, consumer empowerment

3rd order: New paradigm of growth, exclusion / inclusion

EITO 2002 special studyThe impact of ICT on sustainable development (3)

Environmental sustainability and ICT

Impact and opportunities:

1st order: Design / manufacture, operation, disposal of ICT equipment

2nd order: Use of transport, ICT business systems, virtualisation of material products, products lifetimes, environmental information

3rd order:Decoupling economic growth and energy consumption / carbon emission, changing settlement patterns

EITO 2002 special studyThe impact of ICT on sustainable development (4)

Social sustainability and ICT

Impact and opportunities:

1st order: Job creation, digital divide / opportunity

2nd order: Access to information, security challenge, better services, new communities online, popular protest online

3rd order: Cultural homogeneity / diversity, building local communities, building civic culture

EITO 2002 special studyThe impact of ICT on sustainable development (5)

Government / business policy options

Three broad principles:

Institutional innovation must be as radical as technological innovation in order to keep up with the pace of change

Business, government and non-governmental organisations must work in partnership for action to be effective

Successful policy will depend on a longer term view, beyond the ups and downs of ICT stock prices

Public / private policy actions (1)

Develop the E-economy policy agenda to maximise benefits and to build a model of a global knowledge society

Strengthen a stable and predictable EU regulatory framework and a progressive replacement of ex ante regulations with ex post antitrust measures for telecommunications

EU enlargement for targeting a net economy of half a billion people and diffusion of best practices among less developed regions

Public / private policy actions (2)

Promote broadband access as a main driver to net economy development

Harmonised regulations within the EU for broadband deployment and fiscal credits / incentives for broadband investments by users

Harmonised standards for components, protocols, security in wireless area

Promote digital broadcasting and digital rich media content

Invest in ICT-based education and E-learning for new skills and jobs