Globalization and E-commerce: The French Environment and Policy

Abstract

According to most indicators, the use of the Internet and the development of e-commerce (over the Internet) in France are below the level that should be reached given the French level of development.• This can be explained by the late adoption of digital technologies by the French.However, the French lateness is less important for professional uses than for domestic uses.France began to catch up with pioneering countries during 1999-2000, but the Internet bubble reduced the pace of adoption.• The French late adoption of digital technologies is partly due to the strong involvement of France in the development of two pre-existing technologies: the Minitel (principally dedicated to B2C) and EDI (dedicated to B2B).Both technologies provided the users with a sufficient level of service to support their business processes, but hindered their propensity to switch to new Internet-based technology.Consequently, most available indicators underestimate the actual level of e-commerce in France, especially the French business readiness to switching to Web-based commerce.• The late adoption of technology was not the only inhibitor for e-commerce.In France's recent economic history, decisionmakers focused for too long on other issues.France had to adapt its economy and its industry to a competitive and global environment.Since the State played a strong role in an economy that was not widely open to competition, a wide set of reforms had to take place between the mid-1980s and the late 1990s.• However, this restructuring policy prepared France for the adoption of e-commerce.asFrance was transformed into a service economy.Most organizations became more flexible by externalizing non-core activities and by implementing modular principles of organization.French companies went international as well.This new business climate favored the adoption of e-business and e-commerce practice by the end of the 1990s.• When macroeconomic and industrial restructurings were achieved, the French government launched a strong information society policy.Since 1998, the government has been furthering the deregulation of telecommunication services, reshaping the legal framework to adapt to digital technologies, promoting IT training and innovation, and developing egovernment.• These policies were both a component of and aligned with the year 2000 e-Europe initiative of the European Union (EU), which promoted the development of a strong digital economy.Specific support programs (in R&D and development of content) were combined and an intensive effort for legislation and inter-member benchmarking occurred (to stimulate member states to align on the most advanced state), the Commission and the Council of the EU tried try to stimulate development of a dynamic digital industry in Europe, and to boost the adoption of digital technologies and the new-methods of work and business enabled by them.• While the European and the French policies had a significant impact on the adoption of digital technologies and e-commerce development, they were insufficient to really enable France to catch up.The bursting of the Internet bubble slowed the pace.Moreover, B2C ecommerce was inhibited by the efficiency of the French distribution system that serves at a low cost alternative to the Internet for most of the population.The existing installed base of EDI, especially in the automobile and distribution industries, inhibits B2B e-commerce over the Internet.Consequently, the French e-commerce path of development is unique since it 2 relies less on the Internet than in many other countries.Despite these inhibitors, France is adopting digital technologies and related practices at a higher pace than the other European countries.• Within France, e-commerce is quite contrasted in the various regions and industries.The Paris area (one-fifth of the French population), the IT industry, the professional services and distribution industries, and large companies are as intensively digitized as most advanced countries, industries and companies worldwide.However, many regions, industries, and SMEs remain archaic.This digital divide is a major inhibitor to the generalization of ecommerce practices, because it prevents France from benefiting from strong potential network externalities.3 % over age 65 1999 c % under age 15 1999 c Germany 82,175,800 87.50 15.84 15.66 United Kingdom 59,766,000 89.50 15.74 18.79 France 58,800,000 75.60 15.65 18.89 Italy 57,298,000 67.00 17.22 14.51 Spain 40,600,000 77.60 16.46 14.85 Poland 38,765,000 65.60 11.82 20.09 Netherlands 15,956,566 89.40 13.55 18.25 Greece 10,645,000 60.10 17.32 15.56 Czech Republic 10,244,000 74.70 13.56 16.90 Hungary 10,228,000 64.00 14.40 17.25 Belgium 10,161,000 97.30 16.36 17.41 Portugal 10,020,000 64.40 16.00 17.04 Sweden 8,880,532 83.30 17.20 18.88 Austria 8,211,000 64.70 14.97 16.97 Switzerland 7,164,400 67.70 14.97 17.07 Denmark 5,330,020 85.30 14.45 18.23 Finland 5,176,000 67.30 14.59 18.54 Norway 4,485,000 75.50 15.40 19.58 Ireland 3,730,000 59.00 11.17 21.56 United States 275,129,984 77.20 11.85 21.20 Scandinavia d 23,871,552 78.81 15.75 18.61 European Union e 376,749,918 79.54 15.97 16.83 OECD f 1

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