This paper discusses the global computer network Internet and the way it is utilized by companies in Austria. At a theoretical level this new infrastructure is related to the discussion of the "global economy", of the "information society", and of the advent of "virtual corporations". It can be demonstrated that the Internet is a key element in this development, but because of its characteristics may also modify its implications. The hypotheses that can be derived from theory are tested in an empirical study of Austrian companies that use the Internet. By use of a WWW-based electronic questionnaire we have collected information about what type of companies use the Internet and how they use it.
Several authors (Bell 1973, 1976, Machlup 1972, Porat 1977) realized the importance of information and knowledge and the wn and knowledge and the wide range of implications already more than twenty years ago. Their theories and concepts of a postindustrial or information economy are still an important basis for research on the impacts of this development on society as a whole. These changes require adaptions within companies as well and a fundamental revision of corporate strategies. Davidow and Malone (1992) envision the formation of "virtual corporations", companies with high flexibility, and close ties to customers and suppliers.
Global computer networks appear to be the ideal infrastructure for these new companies and their growth will probably strengthen and speed up the development trend toward virtual corporations in a global economy. The dramatic growth of the Internet in recent months and its increasing commercial use seem to support this hypothesis. The development is to recent to be visible in aggregate indicators. At the firm level, however, we may be able to detect signs of the developments that are predicted by the theoretical literature.
In this paper we will present the results of a pilot study that tried to find out, how companies
use the global computer network Internet. Section 2 summarizes development and
characteristics of global computer networks, section 3 shows the general economic
consequences in the framework of the global economy and the information society. These
two parts provide some more general background informatiokground information for the further analysis.
Section 4 focuses in greater detail on the impacts of telecommunications infrastructure on
firms and productivity, whereas section 5 elaborates the spatial impacts. In section 6 we
discuss an empirical analysis that we have conducted in Austria, which attempted to identify
some of the characteristics and strategies of virtual corporations in the companies that use
the Internet, the largest global computer network. In the first sub-section we lay out the
structure of the analysis and present the instruments we used. The following sub-section
discusses the results. The paper ends with a concluding section.
With the increasing number of participants, the new networking technologies are more and
more integrated in work and community. The Arthur D. Little Forecast on Information
Technology and Productivity summarizes the major change in the underlying concept and
structures of communications networks and their implementation: "In the past,
communications networks were created ad hoc to handle data processing applications as they
arose. Aggressive companies will now reverse the situation: They will set up basic, flexible
communications structures from which users will draw capabilities as needed" (Weizer et al.
1991, pp. 173).
One of the most important reasons for this rapid development is the existence of positive
agglomeration effects (Maier 1995). The fact, that 35-40 million users are potential
customers or at least recipients of marketing and product information, makes the Internet so
attractive. And the permanent increase in the number of networks, hosts and users is
motivation for additional users and information providers to utilize this facility for their
needs. Higher demand and supply due to positive agglomeration effects induce the ciects induce the circular-
cumulative increase that could be observed over the recent years.
Another important aspect is the cost structure of the underlying infrastructure. The main
costs are fixed (hardware and physical network), thus with increasing volume of transactions
the costs per unit transferred decrease. This constitutes an economic mechanism toward
expanded use of networks like the Internet (MacKie-Mason and Varian 1993).
As compared to other infrastructure components, the Internet has some completely new
characteristics. Once a computer is connected to the Internet, the user has access to all other
Internet hosts, regardless of their physical location. Terms like "Cyberspace" and "virtual
communities" describe this phenomenon and the diminishing importance of space and
location (Rheingold 1993, pp. 57-58). Distance becomes a negligible component for the
Internet user (Maier user (Maier 1995).
The shorter life span of new products increases the need for a more efficient production to
be competitive. Rapid technological developments as well as frequent changes in demand
require high flexibility of the internal organization. internal organization. Lean production, lean management,
flexible specialization, just-in-time and outscoring are thus important strategies of companies
in the global economy (Davidow and Malone 1992, Maier 1995).
Firms try to find optimal locations for individual parts of the production process and to
cooperate with others to minimize risks and/or costs. These strategies result in an increasing
importance of formal and informal networks between firms, research and training institutions
and other public or private organizations at different spatial levels (Tödtling 1994, Maier
1995). A related trend is the internationalization of research and development (Morris 1992,
pp.181-184). Small and large, public and private, profit and nonprofit institutions benefit
from international science and technology linkages. Not only manufacturing, distribution and
marketing, but also R&D networks gain importance.
Bell's (1973, pp. 18-20) concept of the postindustrial society defines the acquisition and
codification of theoreticaification of theoretical knowledge as most important principle. Following
industrialization, according to Bell (1973, p. 20) "a society organized around knowledge for
the purpose of social control and the directing of innovation and change" emerges. The
society is dependent on information, the crucial power is the control of knowledge. Porat
and Rubin (1977) define the information society as a shift in roles of the labor force. A
different kind of worker is required in a society that produces and distributes knowledge.
A recent interpretation of the information society by Castells (1993, pp. 248-249) emphasizes
the dependence of the sources of economic productivity, cultural hegemony and political-
military power on the capacity to retrieve, store, process and generate information and
knowledge. Information and knowledge are seen as directly productive forces, as "the
critical raw material of which all social processes and social organizations are made." The
globalization of the economy and the increasing importance of the different interlinkages as
well as the automation of most standard production and management functions are the main
reasons, why generation and control of knowledge, information and technology is a key
factor and a "necessary as well as sufficient condition to organize the overall social structure
around the interests of the information holders."
Both the trend toward an information society and the globality and the globalization of the economy have
induced and encouraged the growth of the Internet. On the other hand, the technological
revolution, the increasing importance of computers in manufacturing as well as management
and the fact, that information is more frequently available in digital form, have also had an
influence. This development is again part of the larger, global trends, so that all the different
processes have to be seen and analyzed in this broader context.
The Internet might be the pivotal infrastructure for these and related strategies. It provides
fast and reliable connections to suppliers and customers worldwide. The Internet offers all
the advantages of a direct electronic link to vendors, c link to vendors, but the company does not have to
commit to a proprietary vendor system. An increasing number of suppliers provide on-line
pricing and ordering capabilities over the Internet, which makes it easier for firms to
compare prices and delivering schedules of several potential suppliers. Software and
publications can be distributed electronically and are thus available immediately to all
Internet users, and on-line product support also increases efficiency and reduces costs
(Cronin 1994, pp. 55-57).
On the customer side, there are similar potential advantages. The Internet is a powerful tool
for market research, for establishing new markets and for testing customer interest in new
products. Electronic information and software can be delivered over the Internet, and
payments can be collected the same way. Electronic catalogs and on-line help can be
offered. The Internet provides opportunities for direct contact with customers and allows
technical and development staff to find out immediately how customers respond to company
products.
The example of four multinational U.S. companies (Schlumberger, IBM, Oracle, Rockwell
International; Cronin 1994, pp. 70-93) shows that even sophisticated internal corporate
networks are no longer sufficient for the complex communication needs of these firms.
Gateways are needed to access the standard systems used by customers, other businesses,
government and universities.
< and universities.
Besides companies utilizing the Internet for specific business purposes such as marketing, for
collaborative research and development and to improve connections with customers and
suppliers, some specialized firms already do business only on (and for) the Internet. The
worldwide computer network, the repeated technological breakthroughs and its rapid growth
combined with the low-cost entry points for individuals and small businesses provides an
excellent environment for innovation and entrepreneurial activity. Global connectivity
generates an unprecedented availability of products, but also means of production and
distribution. Once small businesses are connected to the Internet, they can produce, market
and distribute their products globally with minimal incremental costs (Cronin 1994, pp. 213-
214).
The key element of all the implications of global computer networks is the fact that spatial
proximity becomes much less important, in a certain sense almost irrelevant. By connecting
to the Internet, companies are able to substitute virtual accessibility for spatial proximity.
Unlike the traditional transportation costs, access costs to the Internet are independent of
distance, as long as efficient network infrastructure is available. On the other hand, firms in
locations without access to the Internet face the traditional transportation cost barrier. Thus,
in addition to the classical agglomeration economies as discussed above, we can also define
economies of virtual agglomeration on the Internet. The latter will become increasingly
important with a further growth of the Internet, whereas the former will loose importance
(Maier 1995, pp. 12-13).
This development has important consequences, primarily for cities and aggfor cities and agglomerations. In
principle, global computer networks could reduce locational disadvantages of peripheral
regions, because many office tasks can be performed independent from the location of both
producers and users. But some authors argue that the introduction of telecommunication
technologies will increase regional concentration instead of decreasing it (Steinle, 1988).
Goddard and Gillespie (1988) discuss aspects of equity and efficiency. They raise the
question, whether the information economy is likely to become less equitable, because
knowledge and information as key strategic resources are becoming marketable commodities
to an increasing extent. A related hypothesis is that the largest corporations benefit most
from the new information technologies. They are able to extend their control over global
markets, because the essential communications infrastructure is being created by and for the
transnational corporations. Goddard and Gillespie conclude with the thesis, that
developments in the information economy would create even worse geographic disparities in
economic well-being, if there is no policy intervention. The counter argument, which we
support, is based on the cost structure of the Internet. Since costs do not vary by distance,
the Internet allows even small companies to compete globally and to target market niches on
a worldwide scale. Not size is the critical factor, but the company's flexibilityny's flexibility and its ability
to identify and to adjust to new market conditions. Therefore, newly founded small
corporations may even have an advantage over large established firms.
From the region's point of view, the fact that just access to the Internet is important for
certain activities, will increase the level of competition for innovative, "interesting"
companies between cities and regions (Maier 1995). Such companies will be highly mobile
between the regions with Internet access and will choose between them based on costs for
access and factors not related to the network, like taxation, level of bureaucracy, etc.
Regions without access to the Internet, however, could soon face substantial problems. As
Castells (1993, p. 248) points out: "This technological informational revolution creates a new
communication world made up at the same time of the global village and of the
incommunicability of those communities that are switched off from the global network."
The major problem is that even on a global scale there is little empirical evidence about the
Internet use by commercial operations. The situation in Austria is no exception. Even finding
out the number of companies who use the Internet in Austria is practically impossible. The
only information available is the number of computers (hosts) that are connected to the
Internet in the country. By May 31, 1995 it was 37.369, up almost 2.300 from one month
earlier (RIPE, 1995). Figure 1 shows the growth in the number of hosts in Austria between
July 1991 and May 1995. It corresponds to a growth rate of 6.4% per month or about 110%
per year. These growth rates are similar to those in other western european countries.
How many of those hosts are used for commercial purposes is unclear. At the global scale,
according to Network Wizards (1995) the number of commercial hosts has almost doubled
between October 1994 and January 1995. One has to keep in mind, however, that this
observation is based on an inquiry of selected sites. When we look at the attention the
Internet has received in the Austrian media in recent months, this trend seems plausible for
Austria as well. Practically all major publications, business journals in particular,ls in particular, in the
country have reported about the Internet (e.g., trend, New Business) and numerous
companies have appeared on the World-Wide-Web (for an overview see e.g. Austria Online).
We have decided to use the Internet in order to collect some preliminary information about
how companies in Austria use the network. We have designed a
questionnaire, but instead of mailing it to a sample of Austrian companies, we have stored it as
HTML-form on a World-Wide-Web server and sent the information to various newsgroups
and to Austrian Internet-providers that companies should fill in this questionnaire. Those who
were willing to cooperate, downloaded this document onto their computer-screen, filled in
the form and clicked on the "submit"-button. With this, their answers were transmitted back
to our server where they were automatically accumulated in a file. This procedure itself is
an example of how the use of the Internet can reduce costs. We saved the costs of mailing
the questionnaires as well as those of keying in the responses. The drawback, of course, was
that we had no control over who "received" the questionnaire. It is very likely that
companies where employees are actively participating in the virtual communities will be
overrepresented in our sample. We think that this is justifyable in an exploratory study.
It is not surprising, that almost all the businesses are in the service sector. The heterogenous
group of "other services" is the largest one (29%), followed by computer vendors (22%).
Other sectors such as media, manufacturing, tourism etc. are minorities in our sample (see Fig. 2).
As we expected, smaller and younger firms seem to be more active on the Internet. Almost
55% of our respondents have ten employees or less, whereas only five companies have more
than 1,000 employees. About 2/3 of the responses came from single plant firms. Exactly
half of the companies in the sample were founded after 1986 and one fourth started business
since 1992.
In companies with more than one location, usually headquarter and all subsidiaries have
access to Internet services. In four cases this is a privilege for the headquarter only, other
plants are not connected. While 66% dial in via modem, the other firms have broadband
connections.
Management (46%) and electronic data processing department (EDP; 33%) initiated most of
the Internet connections, other internal or external initiatives are less important. These two
departments as well as public relations, marketing and customer service are the most intense
users of the Internet (between 38% and 56%). The network services seem to be less
important for production (20%) and acquisition (31%) and in particular for accounting (6%).
In more than half of the companies (57%), all the employees who use a PC for their work
have access to the Internet. This number is surprisingly high and reflects to a certain extent
the small firms bias of our sample. On the other hand, some of the largest companies also
provide Internet access for all their employees who work on computers. In additional 7% of
the firms, more than half the employees can use the services. In the rservices. In the rest of the companies
(36%), less than half of the employees using computers have access, in 9% of the cases
access is restricted to only one user.
As can be seen in figure 3, e-mail as communications tool with external partners (89%) and
WWW (91%) as information source are the most important applications, FTP (80%) - an
unexpected result - is next. Significantly lower are the numbers for internal e-mail
communication (58%), NetNews (56%) and Gopher (46%). While the Internet services have
been widely accepted and used for communication and as information sources, few
companies are active as information providers yet. More than half of the firms (51%) have
their own WWW server installed, but only 7% are maintaining a gopher server. Whereas
only 7% of the companies plan to set up a gopher server within one year, 36% indicated
plans to install a WWW server. Thus, WWW and external e-mail will be by far the most
important Internet services for Austrian companies in the near future, close to 100% of the
firms in our sample will use both.
It is interesting to compare the motivations of the individual companies for establishing
Internet connections. 42 firms described briefly the goals they wanted to achieve with the
use of Internet services. In general, the responses confirm the theoretical arguments and
expectations. A major goal was to apply a faster, easier and also cheaper way toalso cheaper way to
communicate with others worldwide (e-mail). Several respondents emphasize the importance
of real-time communication between supplier and customer and the fact, that e-mail
guarantees accessibility 24 hours a day. Most companies see the easy and fast access to
global information as another important aspect of the Internet, in particular WWW has been
introduced to gain more access to information sources. Some explicitly state that they want
to experiment and become familiar with this new technology. Individual respondents
mention the ability to provide information and new products immediately and refer to the
increasing internationalization of research and development and the need of international
cooperation. To facilitate this new way of joint product development, access to the global
computer network is considered essential.
Much has been discussed and written about potential impacts in general and cost effects in
particular of the usage of Internet services. Almost half (48%) of the firms responding to
this question, indicated that the introduction of the Internet has led to cost reductions in one
or more areas. Of these companies, 41% indicated savings in management or in EDP, 36%
in marketing or customer service (fig. 4). Still 23% reported reduced expenses in
acquisition, 32% in acquisitions. Even more respondents expect additional cost reductions
for the near future, in partr future, in particular for marketing and public relations (more than 2/3), but also
for customer service (48%). Less, but still significant, potential for future savings is
considered for acquisition (36%) and production (20%).
A surprisingly high number of respondents (90%) see strategic advantages for individual
departments in relation with the use of the Internet (fig. 4). Again, marketing, public
relations and customer service seem to benefit most (58-76%). Whereas still 46% think that
access to and use of Internet services creates strategic advantages for the management, the
numbers are smaller for EDP (42%), production (16%) and the other parts of the companies.
Overall, a clear majority considers the Internet not only very important, but - at least to a
certain extent - necessary to be competitive.
The strategic advantages most frequently mentioned are similar to the goals and expectations
pointed out by the companies. Most respondents emphasize the improvements in
communication, in particular the ability to serve the customers faster and better. Providing
own information and services on the Internet is considered important to remain competitive
and to demonstrate competence and knowledge.
The answers to a number of statements about the Internet show, that these services are
considered seriously and that they have become an important part of different commercial
activities (fig. 5 and 6). On a scale from 1 (agree) to 5 (disagree), most respondents
disagree, that Internet has nothing to do with their business activities ("BUSINESS", mean
4.19). More than half do not agree that the Internet is simply a nice toy for some computer
freaks, but nothing serious ("TOY", 3.22). While some users consider the services expensive
but too important to be missed, more than half do not agree ("EXPENSIVE", 3.43). In
general, companies are not convinced that the Internet will help them to increase their profits
("PROFIT", 3.30). A huge majority considers the presentation of their company an
important strategic management decision ("STRATEGIC", 2.23). This opinion corresponds
with the high number of firms where it was the management who took the initiative to
establish the network connection, who indicated to use the services, and who expected
strategic advantages.
There seems to be no doubt, that the Internet helps to improve customer services
("CUSTOMERS", 1.96). The customers seem to be aware of and interested in the new
activities of the companies, many firms got some sort of feedback from their customers
("RESPONSE", 2.69). More respondents than expected agree, that the use of the Internet is
a competitive advantage ("COMP.ADV.", 2.13), a similar number emphasizes the importance
of the Internet as a source of market information ("MARKET INFO", 2.32).KET INFO", 2.32). Only in a few
cases, the introduction of Internet services has led to a change of the internal structure
("STRUCTURE", 3.58) and of the internal communication ("COMM", 3.25).
As discussed in section 5, the importance of the Internet at the firm level and for different
activities of companies could also have some spatial impacts. More than half of the
respondents think, that Internet access is already a very important factor for business location
("LOC.FACTOR", 2.67), about 50% expect that location decisions will become more flexible
in the future ("LOC.FLEXIBLE, mean 2.55). These results support similar arguments in the
theoretical literature.
We are particularly interested in those companies that use the Internet to its full potential.
They may show characteristics of a virtual corporation as we have described it above. Of
course, in order to really identify virtual corporations we would need to analyze their internal
structure, their marketing, acquisition, and customer support procedures. This is not possible
with the information available. However, the evaluations of our statements in the
questionnaire give some indication of how well Internet services are integrated into the
company strategy in the perception of the respondent. Therefore, we use some of them to
identify "virtual corporations" in our sample.
Table 1 shows the results of a factor analysis based on 6 evaluation questions. Factor 1,
which explains 43.5 percent of the variance, dominates all but one variable. As the signs
show, this factor distinguishes between firms who view the Internet as an important
instrument for customer, a competitive advantage, a valuable source of market information,
an important element of their business, and an infrastructure for more flexible location
decisions on the one hand (low factor scores) and those firms who don't (high factor scores).
Based on this analysis, we define "virtual corporations" as those with factor scores below
-0.4.
Table 2 compares the "virtual corporations" with the sample as a whole. As we can see,
they differ markedly. The "virtual corporations" are much smaller and younger than the
average company that answered our questionnaire, and they use Internet services more
intensively. They train their emplyoees more frequently in the use of the Internet, and a
larger percenet, and a
larger percentage reports cost reductions because of Internet access. As far as the evaluation
questions are concerned (those that were not used in the factor analysis), all the means move
in the expected direction. In the average and in contrast to the sample as a whole, the
"virtual corporations" support the statements that the Internet will lead to to higher profits as
well as that the Internet has changes their structure and their communication.
These results show that this is a particularly interesting group of companies. They show all
the signs of virtual corporations as we have discussed them above. It might be particularly
interesting to observe the future development of those companies.
ss considerably.
In the empirical analysis we investigated a self-selected sample of 55 companies in
Austria who use the Internet. As the results show, these companies take this infrastructure very
seriously and consider it an important tool for doing business. A considerably high percentage
reports reduced cost because of Internet access, particularly in customer-related activities
(marketing, public relations, customer service). The firms see the Internet as an instrument for
improving customer relations, their position with respect to their competitors, and for
demonstrating competence and knowledge.
Based on the data we distinguish a group of 18 companies who seem to be implementing
the Internet very actively into their operation. These companies are much smaller and younger
that the average company in the sample, and in many respects show characteristics of "virtual
corporations".
2 Vienna University of Economics and Business Adminisnomics and Business Administration,
Vienna, Austria.
3 University of North Carolina at Chapel Hill, Chapel Hill, North
Carolina, USA.
2. Global Networks: Development and Characteristics
Global networking, the possibility to communicate and to exchange large amounts of
data, has developed only over the last 25 years. By far the largest global computer network
is the Internet, and it is still growing at an impressive rate. While the estimated number of
Internet users in January 1991 was 1.88 million, the Internet had about 4 million users one
year later. By August 1992 this number was 5-10 million, and the network had 1 million
hosts. Since 1987 the number of networks has doubled each year, and monthly
measurements of numbers of hosts for Europe show, that the growth rate there is currently
faster than in the United States, the Internet in Europe is increasing by a factor of four
annualor of four
annually (Quarterman 1993, p. 43). Currently, the number of Internet users worldwide is 35-
40 million. An interesting detail in this context is, that commercial hosts are already a
majority in the United States, and their number is growing at a faster than average rate.
3. The Framework: Global Economy, Information Society and Electronic Revolution
The Internet growth rates and the increasing importance of computer networks have
to be seen in a broader context. Recent improvements of network technologies fit into other,
more general development trends, which created the demand for these facilities and services.
The most important aspects of this process are the globalization of the economy and the
increasing importance of information ("informational society").
The Global Economy
Castells (1993, p. 249) defines the global economy as "an economy that works as a
unit in real time at a planetary scale." Capital flows, labor markets, commodity markets,
information, raw materials, management and organization are internationalized and
interdependent worldwide. Companies in the global economy have to coordinate their
activities in all different parts of the world and they also have to observe all ongoing
changes, developments and activities of competitors. Globalization and integration increase
competition, and it is important to market new products immediately and globally (Maier
1995).
The Informational Society
Two conceptual paths toward the idea of an information society can be identified
(Dordick and Wang 1993, p. 9): authors like Daniel Bell related the increase of technology
and planning to the emergence of a new society. Machlup and Porat, on the other hand,
related their work more directly to the growing importance of information- or knowledge-
based industries.
4. Impacts at the Firm Level: Information Technology and Productivity
The overall trend that we have characterized with the terms "global economy" and
"information society" has fundamental implications for individual companies. The increasing
level of competition reduces profit margins. The shortened business cycle requires
companies to get new products to the market at a faster rate. Therefore, the companies face
a higher level of risk and try to develop strategies for reducing this thread. Some of the
more promising strategies are sharing the risk with other companies in joint ventures and
strategic alliances, and getting more accurate information about customers and markets faster.
5. Economic Development: Spatial Impacts
The 2>
The development of a specialized industry to provide access, tools and services that
facilitate participation in the global economy of the information age is an interesting
phenomenon, and could have far-reaching consequences for the structure of the entire
economy and the future of cities and regions. "Virtual firms" have completely different
needs than "traditional" industries, other locational factors gain importance, and space and
location get a completely different value and meaning.
6. Internet-use by Corporations in Austria: Empirical Results
The discussion so far of the globalization of the economy, the information society,
the virtual corporation, and the characteristics of the global computer network Internet have
generated a number of hypotheses about what companies will use such an infrastructure and
how they will use it. We expect small, newly founded companies in sectors that process
information to ess
information to be among the first on the Internet. They will probably use it for external
communication, to observe markets, and to coordinate with suppliers and customers.
6.1. Structure of the Sample
Over a peri>
Over a period of four weeks the procedure described above yielded 65 responses from
Austrian companies, of which 55 could be used in the analysis. Most of the companies
(60%) are located in Vienna, but we have at least got some responses from other regions in
Austria as well. 14% of the observations are firms in Styria, other clusters are in Upper
Austria (5%) and Lower Austria, south of Vienna (9%). The four remaining companies are
located in Salzburg, Carinthia, and Tyrol (2).
6.2. Use of the Internet
Most of the companies in our sample started to use Internet services only in recent
months. Only individual firms had e-mail access before 1992, and 45% installed e-mail as
communication tool in 1995. The use of in 1995. The use of World-Wide-Web (WWW) is an even more recent
phenomenon: only about 1/4 of the firms that use WWW started to do so in 1994 or before,
the rest in 1995. Similar trends can be observed for the introduction of other services
(mainly FTP, Telnet and Gopher).
Table 1: Results of the factor analysis
Variable iable Factor 1 Factor 2
Internet has nothing to do with
business activities -.60146 .39875
Internet helps to improve customer service .77244 .37116
Presentation on the Internet is an
important strategic management decision .80700 .27499
Presence on the Internet is a competitive
advantage .61911 .40662
Internet is an important source of
market information .51351 -.60751
Internet increases flexibility of business
location decisions .59443 -.35086
Pct of Variance explained 43.5 17.2
Table 2: characteristics of "virtual corportations"
Varitual corportations"
Variable "virt. corp." sample
number of companies 18 55
number of employees 72 364
year when founded 1980 1963
provides repeated training 67% 38%
uses e-mail with external partners 100% 89%
uses WWW 100% 91%
runs WWW server 78% 51%
reports cost reductions 56% 48%
TOY 3.39 3.22
PROFIT 2.39 3.30
EXPENSIVE 3.61 3.43
RESPONSE 2.11 2.69
STRUCTURE 2.72 3.58
COMM 2.61 3.25
LOC.FACTOR 2.06 2.67
7. Summary and Conclusions
In this paper we have discussed the use of a global computer network like Internet by
commercial corporations, both from a theoretical and an empirical perspective. We have
summarized the discussion of globalization of the economy, of the information society, and of
the evolution of "virtual enterprises" and related it to the characteristics and recent development
of the Internet. As it turns out, the INternet may be an instrumental infrastructure for all those
developments. It is both a result and a driving force of the process. Some of the characteristics
of the Internet - its cost structure, for example - are unique and may modify the development
process considerably.
REFERENCES
1 Paper presented at the 35th European Congress of the Regional
Science Association, Odense, Denmark, August 22-25, 1995
