Trade gap to widen - report

Despite the Republic's claim to be a pioneer of electronic commerce, a new report has estimated that less than 40 Irish websites…

Despite the Republic's claim to be a pioneer of electronic commerce, a new report has estimated that less than 40 Irish websites are actually conducting electronic transactions.

It also says that less than £10 million was spent online in Ireland last year. This compares poorly with the US, which is thought to have generated 85 per cent of the $8 billion spent globally on e-commerce in 1997.

According to the report by Davy equity research, unless Irish and European brands turn to e-commerce soon, the existing trade gap will widen and a large share of the European market may be appropriated by US brands seeking to consolidate their market lead.

Most institutions appear to be adopting a wait-and-see approach before investing in transaction-enabling software. Early adopters went online because of the perceived opportunity; there now appears to be a lag between these and the majority of businesses who will only go online when they perceive a risk in not doing so.

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The report calls on at least one of the major Irish banks to more actively encourage e-commerce by facilitating the use of credit cards online. At the moment merchants are having difficulty getting Irish banks to process online credit card transactions. The recent digital signing of a joint communique on e-commerce between President Clinton and the Taoiseach, Mr Ahern, was cited as a possible catalyst to accelerating the move towards online trading. Decisions by leading US e-commerce companies, such as America Online and Doubleclick, to locate European operations here have been interpreted as extremely positive, as they may pave the way for direct inward investment similar to the proliferation of software and services companies in the 1970s and 1980s.

Although the Government and the IDA are identified as acknowledging e-commerce's potential for direct foreign investment, the report calls on the Government to lead by example and use the Internet for procurement, disseminating information and payments.

The report rejects the widely held view that Internet access will eventually be charged at a flat rate, regardless of time spent online and data volumes downloaded.

Madeleine Lyons

Madeleine Lyons

Madeleine Lyons is Food & Drink Editor of The Irish Times