Electronic Commerce for Small Firms: Key Issues

• For some types of products (mainly computer and Internet related) there is already a global market of Internet users numbering many millions;
• For some additional informational products (for example books) there is a smaller but still viable global market;
• Within the global online audience there are also smaller niche markets for speciality products

For this majority, the extended market promised by the global networked economy requires substantial change to their whole way of thinking about their business - how they sell, how they handle customer relationships, how they deliver, how they provide support. To fully capitalise on online opportunities may require a complete rethink of the product range or even the abandonment of existing products and customer sets in favour of the new growth opportunities. In providing support to small firms we must help them decide a number of key issues.

Dimensions of change for small firms approaching electronic commerce

• On one dimension, whether to stick mainly with the existing product range, which is the basis of today's revenues, or to respond rapidly to the new opportunities and rethink the product range;
• On the other dimension, whether to stick mainly with existing customers and marketing approaches but add on some tentative electronic trading methods, or re-engineer the business so as to exploit the opportunities of being in the "first wave" of the new markets.

It may well be that in ten or twenty years time, when the overwhelming majority of consumers and businesses are "actively online", all small firms will have needed to make the transition in terms of both products and processes. For the time being its critical that a particular small firm makes appropriate decisions about how quickly to attempt the transition and what steps to take first. We have to move from simply advocating wider use of ICTs and widespread promotion of electronic commerce to a more focused and targeted approach.

How the scale of opportunities varies with sector and location

• For those firms willing and able to re-engineer their products and/or their business methods, and whose capabilities are well mapped to today's global (and today mainly English language) online markets, the opportunities are immense - a high proportion of all active Internet users world wide - and growing rapidly.
• For firms with existing multi-lingual, multi-cultural capabilities the opportunities may be even larger.
• But for many firms its more realistic (a) to stick to their own language as the main language for doing business, which means (b) sticking to only those markets where the normal language of commerce is their native language.

The fact that we recognise the need for small firms to be supported locally confirms that today many activities work better on a local basis and that the barriers of distance are still a reality - for small firms as well as for those advising them.

The skills and know how gap

An electronic commerce solution to an electronic commerce problem?

Until now, the ETO site has been very generalised in its coverage and purpose. We now see a need and opportunity to build on this know how and experience to support more sharply focused neworks. Our first step is to develop a network focused on Europe's "telecentres", which are very varied in their purposes, organisation, ownership, management and users, but which share a common need to be successful "online" - in other words to excell in electronic commerce methods and know how. We hope this development can be supported under the TEN-Telecom programme and we are building a suitable consortium to propose this.

It appears to us that centres supporting electronic commerce for SMEs may well share some of the same needs:

• The need to develop and exhibit strong in-house competence in electronic commerce methods so that they can transfer these skills;
• The need to have strong "electronic networking" skills and to transfer these skills to their customers;
• The need to have strong connections to equivalent centres elsewhere in Europe and world wide so that they can readily help their local customers to "make good connections";
• The need for good communications online with each other, with the Commission and with other agencies - unless we practise what we preach, how can we know the validity of our messages?

A second suggestion is to start collecting hard data about the realities of electronic commerce activities and projects in Europe. The ESIS programme is building a database of projects and initiatives, we also need to collect, analyse and use data about such things as:

• which web sites are being successful in electronic outreach and electronic trading;
• what are the characteristics of successful websites;
• are there commonalities that distinguish the more successful ones from the less successful ones.