Examination of Witness (Questions 500
WEDNESDAY 22 MARCH 2000
500. I know of 40 IPOs in the month of June
for .com companies. Bearing that in mind, those companies are
going public in order to raise funds.
501. To invest in their business. If what you
have said is right, and I think it is, that institutions are taking
an alternative view of these organisations, when they want to
raise funds they will not be able to do so because the appetite
for the paper will not be there. Do you envisage that as being
likely because if it is likely the knock-on effects are very considerable
A. The decision making process will be scrutinised
much more carefully and instead of looking to projects which will
not materialise a profit within four or five yearswhich
many of the last round of IPOs have been targeted forthey
are looking for projects which are much more spontaneous, which
will generate a profit more rapidly, and which in fact include
a platform or base of more traditional enterprise so that the
.com is an important part of the business without being the sole
rationale for the business itself. If you are looking at something,
say, in the travel sector then we are talking about the real content
which has an intellectual value of its own and is not just a framework.
We are not selling the framework, we are selling the framework
plus its content, real substantive value.
Lord Chadlington: That is very interesting.
502. Earlier the Lord Chairman asked you who
was leading in Europe and I think you said Germany, United Kingdom,
France and Spain.
A. France, Italy and Spain.
503. Could we have some sort of a score card?
I think we are all used to seeing Manchester United with 50 points
and Leeds ten points behind or two points behind.
A. Yes, indeed.
504. It would be interesting to know just where
we stand in catching up or falling behind.
A. Baroness O'Cathain did refer to the fact
that if we take the greater population of Germany we have to recalculate
505. Slightly, yes.
A. But in terms of the actual numbers involved,
Germany will have 30 million Internet access users.
506. How many?
A. 30 million, whereas Britain would have 25,
France would have 18, Italy a figure which we believe would be
about 11.5 or 12 million, and Spain very close to that on ten.
Those are the reasoned estimates collated from statistics.
507. Basically we are ahead then on a population
A. On that basis, yes, indeed. With respect,
I would question whether every person in Germany has equal access
to the Internet.
508. Can we keep those figures up to date? Are
they freely available?
A. The figures only exist by what the research
houses do their cross country knowledge on.
A. It is extremelyI use the word "hairy"hairy
looking at the estimates for the growth of business over the next
generation, it is extremely difficult to do forecasts.
Lord Woolmer of Leeds
510. You touched upon the formation of business
to business communities.
511. If I understood you right you said that
effectively they are more important in terms of what is driving
business and future prosperity and jobs than in a sense the more
interesting e-commerce to consumers. In terms of Europe compared
with America, and within Europe Britain, how do Britain and Europe
compare to the formation of business communities taking advantage
of e-commerce and e-business and transforming business for the
longer term? Within Europe how does Britain compare?
A. The number of cross corporate projects in
Britain is roughly on a par with those to my certain knowledge
in Germany, in other words where we have industry-wide projects.
In both Britain and Germany we have a major market site exercise,
ie common trading communities running on the back of the former
monopoly PTT in each case. British Telecom has one in conjunction
with one of the major vendors, as does Deutsche Telekom. Both
have been matched in the kind of operation that we see around.
Compared with the North American communities there has been a
tradition of electronic data interchange in North America which
was the forerunner of modern e-business. Because America was so
much further ahead in electronic interchange practices, there
was greater community spirit earlier on.
512. I just wanted a qualitative view on your
part to tell us whether you think that effectively in terms of
transforming industry and business, and hence in the longer run
prosperity, is Europe on a par with the States or are there ways
in which Europe is likely to be behind? That must affect competitiveness.
A. Given that there is no such thing as `Europe'
in this context I would argue that some countries in Europe are
certainly far ahead of the US in their approach and strategy,
and I would put Germany and Britain in that position, whereas
there are countries, and I have mentioned Belgium, that are far
behind but they are part of the European Community and part of
513. I would like to ask you to talk about Europe
because we are, after all, a European Community Committee.
514. What should the role of the European Union
be in this, the European Union or European Commission or whatever?
Do they actually have a locus in this? You know the way they try
to get their hands into everything, try to regiment and organise
and legislate, there will be state aid for this bit and not allowed
for that bit. Do you think they have a role and, if they have,
what should it be?
A. Tomorrow there is, in fact, a two day conference
starting in Lisbon in which eEurope is being presented, An
Information Society for All. If it comes back to any of the
points it is to create an open environment across Europe which
will hopefully stimulate everything from the education arena.
In fact, without wishing to quote the
Chairman: We have seen the document, perhaps
you might comment.
515. What is your view of the document? We have
expressed our view already.
A. My view of it is that many of the objectives
are pious aspirations and need local and national government co-operation
which is not going to be inherently forthcoming without some real
incentive. That incentive usually means financial incentive. Without
redefining e-business as a separate category of activity which
can be supported from the centresupported meaning stimulated
from the centrethen I am very dubious that Europe as a
body, ie the EU, is going to achieve very much. It is going to
come down to local initiatives.
516. The problem is we have been led to believe
that the people who are going to be taking part in all of these
discussions, which as you say are aspirational, motherhood and
apple pie really
517. The real drivers of all of this do not
get a look in where governments are concerned, they speak a different
language and people do not fully understand what they are talking
about. Do you think that the Commission should actually go about
consulting these people on how to keep abreast of leading edge
e-commerce development? If you have the Martha Lane-Foxes of this
world stuck in with the Department of Trade and Industry, perhaps
they would begin to understand it a bit better, or am I just being
A. You cite examples like the lastminute.coms
of the world, those are blips on the horizon, they do not represent
what e-business is about.
518. They are actually distracting us then?
A. They have a marginal distracting effect,
I would put it no stronger than that. They fog discussion. Where
there has to be real initiative is from projects being run at
the moment by one of the national newspapers. I have to declare
an interest, I am involved in it myself. We are trying to encourage
small businesses not just to read about e-commerce but to become
commerce enabled. It is an initiative. That is where the grass
roots are coming from: people reading, people wanting, people
doing something about it. No matter how much sense our friend,
the E-Envoy in the Cabinet Office, is talking, that is not filtered
down very easily to the grass roots, to the small businessmen,
the engineering supplies operation in Wolverhampton who has to
sell the equivalent of a 4BA bolt across Europe and do it cost-effectively.
519. When you said that you are trying to encourage
SMEs, how are you doing this, apart from just writing about it?
A. On this particular initiative one of the
national newspapers is running a glossy colour supplement written
by ourselvesI have declared an interest in the matterthe
moment the reader turns to the centre-spread they see a dummy
website, they call upon their PC that same website and they are
taught how to go through the motion of getting their own website
set uptheir own commerce enablement set upand supported
by a series of free seminars which help people to understand the
issues at stake. It is almost like a Dorling Kindersley approachopen
the book, read through it and go and do it. Words into action.