Economic growth linked to the Web

Bloor maps out the prospects for businesses using the internet.

Industry guru Robin Bloor, chief executive of Bloor Research, has laid out his predictions for the future of the Web. His road map is not only a warning to companies that ignore the internet, but a view of how the world's economy will change drastically over the next 15 years.

Bloor stated that last year he had started to have serious misgivings about what was being predicted for the internet. His fears grew to the point where he decided to write what turned out to be his longest ever report: The eRoad Ahead.

He revealed the Web was experiencing astounding growth rates, claiming the amount of time technologies took to reach 10 million users illustrated the increase - pagers took 41 years, the telephone 38 years, VCRs and mobile phones nine years, while the Web has taken three years and the number of users has rocketed to 50 million.

Meanwhile, the number of businesses adopting the Web or seeking to buy into it is reflecting this explosion. Bloor revealed he had reliably been informed that Federal Express twice attempted to buy Netscape.

Increasing trust in Web transactions is also encouraging this growth, with the number of people buying via the Web rising by eight per cent every month.

Bloor claimed there already is, or soon will be, a Web-based competitor for all businesses: 'A Web-based version of your company will use the internet to be faster and cheaper. When that company takes off, if you are not participating at that time, then you are too late. You have one chance - if you miss it you will be dead in the water.'

This is particularly pertinent to any firm in the business of the distribution of goods. Bloor believes the Web is causing a compression of the supply chain and the beginning of the re-engineering of the market: 'Wal-Mart does not have an intermediate warehouse now - it has the best inventory system in the world. Supplies move straight from the supplier to the store.'

'In business terms, what you should be doing is Web-enabling everything your organisation does - the payback will be 3-1,10-1, even 100-1.

The UK is already lagging behind all of the Scandinavian countries according to Bloor and this could cost the country dearly in the future, as the potential to make money using the internet is already very real: 'This is no longer about IT, it's about business and economies. Business-to-business e-trade last year was worth $7.5 billion. Of that, Cisco did $3 billion and claims that it saved the company $0.5 billion.'

Bloor believes there will be a radical change on the horizon for the world's economy and culture, similar to the impact that print had. 'Businesses must change. The Web is becoming the prime source of news - this will re-order the media over the next few years. Seventeen per cent of US stocks are traded over the Web and companies not doing that will be ripped apart by the likes of Charles Schwab.'

The value of the Web has also become more apparent. 'Geocities last year had $5 million revenue and losses of $8million, yet the IPO value in August this year was $1.5 billion. The market recognises the potential of a medium that has two million users,' said Bloor.

Bloor believes this recognition will lead to some surprising alliances: 'The Web needs standards and that will happen. Microsoft and Netscape will co-operate on a browser in the future so the Web can be standardised.'

He also asserts that the rise in the Web's importance to business will, in turn, spur macro-economic change, European monetary policy being the first to be affected: 'We won't have a European currency but a world currency - any government that opposes the European currency is totally mad. One world currency will steamroll over the world in the next 15 years.

'With 290 million Europeans using one currency, this will lead to competition with the dollar for the position of world currency. The economy will need one value, one currency. Gresham's law dictates that good currencies drive out bad currencies.'

'A currency is a tax on international trade. There will be a decline in the nation state in favour of a world economy - the only things that can stop this are those with the guns and missiles. Governments will be threatened by these developments, but governments are nothing but monopolies and the Web undermines monopolies.'

Bloor concluded by drawing attention to the parallel nature of electronic and terrestrial commerce. 'The e-world will be an electronic mirror of the real world and as such, it will not have the software systems that we now have,' he said.

He also echoed an increasingly obvious fact: 'Data will become very valuable.

All ownership will be in the form of electronic title to value and all ownership will be instantly tradable.'

Jim Callaghan, product manager at Computer Associates said: 'You can't help but be awed and nervous at what Bloor has said. There's a lot about to happen and it is all a bit frightening, but we must move forward - it'll open channels and a world audience for businesses.'

 WORLDWIDE E-COMMERCE USAGE - All figures are percentages
                         UK       US     JAPAN    GERMANY    FRANCE
 EMAIL USE               63       65        72         48        41
 COMPANIES
 WITH WEBSITES           37       41        45         30        14
 HOMES WITH PCS          15       39        15         11        11
 POPULATION ONLINE       10       21         6          5         5
 WEB HOSTS
 PER 1,000               16       45         8         11         6
 Source: Net benefit, the electronic commerce agenda for the UK.