e-Business Impact

Due to the complex structure of e-business related innovations, it is particularly difficult to identify e-business impacts. All the difficulties and caveats of technology assessment as well as of structural change and its impact on the economy apply here (see Cohen/DeLong/Weber/Zysman 2001, Preissl 2000). The impact discussion is furthermore blurred by the fact that impacts at the firm level, the market level and the level of the economy are usually not clearly distinguished. In addition, 'impact' needs a specification of the variables that are affected (impact on what?). Causal relationships are often not direct, but indirect, i.e., the effects of investment in networks are only made effective via additional investment in organisational change, and they are subject to a whole number of economic variables, such as elasticities of demand and supply, business cycle conditions, interest rates etc.. Because of the nature of e-business which in general affects all business processes in a company, and often goes hand-in-hand with business process redesign and structural changes to the production process, it can be difficult to attribute any change in economic performance or in employment directly to the use or non-use of ICT (see also Colecchia/Pattinson/Atrostic 2000). However, a focus only on direct impacts would conceal many of the effects of e-business.

However, it would go far beyond the scope of this project to integrate and re-open the discussion on the productivity paradox of ICT or to engage in other ongoing debates on the impact of e-business on economic cycles, let alone the existence or non-existence of a 'new economy'. Hence, the discussion of impacts should be limited to a small set of well defined indicators for which data on the firm level can be obtained.

A distinction could be made between direct impacts of e-business, most of which will be observable in the short-term, and indirect impacts of e-business, most of which are observable in the medium to long-term. In the latter case, e-business can be seen as an enabler which makes changes in company and market organisation possible and hence induces new techno-economic paradigms. Instead of trying to quantify indirect impacts of e-business, an assessment by company managers of the quality of changes brought about by electronic markets seems to be the more promising option. Direct impacts are to be defined as changes induced by the implementation of e-business on specific variables.

Of particular interest for the opportunities arising for SMEs is the impact on competition. Again, the analysis should be limited to information that can be directly asked from the managers addressed in company surveys. Any attempts to deduct those impacts form other (micro- or macroeconomic) sources run in uncontrollable risks of misinterpreting causal relationships. Any aggregation of the results beyond the industry level requires careful consideration of other economic effects and should not be realised as a standard procedure.