No room for slackers in the online world; electronic commerce

Esther Dyson and other leading lights of the digital age were in London last week to debate the future of e-commerce at the Online Delivery 98 conference. Mark Vernon reports

"It is about what's online, what will be online, what retailers, banks, finance houses and merchants of all sorts are offering or are preparing to offer us," said James Naughtie, presenter of Radio 4's Today programme and chairman of Online Delivery 98 electronic commerce conference and exhibition, held last week in London.

The keynote address was delivered by Esther Dyson, the IT visionary who thinks hard about the intersection of life and technology. She took the audience right back to the Industrial Revolution to find a proper perspective from which to assess the magnitude of change in the Information Age. Dyson analysed how the birth of the factory had introduced the world to economies of scale, which for individuals meant becoming affiliated to institutions or companies in order to survive. She demonstrated how the greyness of subsistence living had given way to the colour of consumer culture, with value being added to products: a flight ticket costs more with a first- class lounge attached, as does a pair of jeans if associated with the right attitude of cool.

But in the Information Age there is a certain return to pre-industrial values, which has profound implications for business. "There will be less separation between work, home and education. Divisions between commercial motivation and pleasurable pursuit will become blurred," Dyson said. "It will be unclear whether people represent a company or themselves. Individuals will again become producers."

Take, for example, an issue such as branding, which Dyson believes is fundamentally misunderstood. Her point is that mass-produced brands, such as Coca-Cola, will lose power to customised brands that convey trust. Further, especially for products in which there is an emotional or personal investment, people will increasingly want service from people, not from expert systems. "Persuasion is still a personal art rather than a computer technique," she said.

The bad news is that all this does not come cheap. "You are not going to make money," she announced to the assembled gathering, though presumably talking to the attendees, not the sponsors - which included Microsoft and Compaq. Online developments are costly and labour-intensive, and as development cycles shorten, another feature of the Information Age, the race to keep ahead is not easing up. But companies make a mistake if they think that technology is the key to "economic fecundity". This is where countries such as Malaysia and Hungary have gone wrong, Dyson claimed. They have focused on hi-tech zones rather than the culture within which their companies might thrive. "What they may be missing is the entrepreneurial spirit and the cross-fertilisation as companies start, merge, break up and unleash second- and third-time entrepreneurs into the mix." Innovation and creativity will be the key assets for the virtual company - that is, the people with whom it shares its success.

As if to discourage the conference from getting too carried away, it next received a "reality check" in the rapid-fire presentation of Patrick Vittet-Philippe, of the European Commission. He sped through the issues currently on the minds of negotiators creating the legal framework for electronic commerce between the world's three major trading blocks. "It is a crucial time," he said, "with issues pressing in on every side."

Encouraging auditors to examine the rich resources published by the Commission for themselves, he pointed out three characteristics of the work being done on the wide range of problems suggested by electronic payments, regulation, taxation and channels. First, he was glad to report lots of convergence, in terms not only of what was being settled, but also of agreement about what was best left to the markets. Continental Europe, too, was broadly marching together in time. However, certain differences have raised their heads. Take self-regulation, the favoured option for monitoring Internet content. "This is a national preoccupation which can have perverse effects. Need I tell you that what is tasteful and decent in France might not necessarily work in Britain," he said. In situations like this, legislation can be used as the means of finding compatibility. His final question was, what next? And, in particular, he pointed to a summer conference, details to be announced, aimed at consolidating the global agenda for the information society.

The next session turned to financial services, arguably the sector most quickly revolutionised by technology. "There is much evidence that the market is changing," said Tim Jones, managing director of retail services at NatWest, admitting that the bank was in the process of reorganising from the ground up. "Banking has already seen the successful introduction of telephone-based services and it isn't stopping there." More sophisticated and detailed customer relations were crucial, he continued to explain. Though when one customer in the audience asked when technology was going to reduce the three-day settlement period for cheques, he did not seem quite so prepared to move ahead.

For those who needed a break from such breathtaking predictions, the second floor of the Queen Elizabeth II Conference Centre was given over to an exhibition. Marked by soft lighting and gentle music, it was clearly designed to ease the minds of stressed-out IT decision-makers, while at the same time saying, "for perfect security, buy me". Projected messages of light, floating across the floor and up the wall, are definitely the marketing rage for 1998.

Over the two-day period any number of further issues were explored, with companies as diverse as BSkyB, Nestle and Blackwell contributing. What was clear was that all recognise the profundity of the shake-up to business that electronic commerce represents. The Internet channel will grow from nothing to $1,000bn in little more than 10 years. No one can afford to sit back.

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