CBI predicts second Internet boom
By Will Knight
Tue, 27 Feb 2001 08:50:11 GMT
URL: http://www.zdnet.co.uk/news/2001/8/ns-21227.html
Study promises Internet revival, but warns that government must speed up
delivery of broadband Internet access
A survey of 1,000 leading companies in the UK by the Confederation of
British Industry (CBI) and consultancy firm KPMG indicates that Internet
business will see renewed growth over the next couple years, bringing
fresh optimism amid the ongoing dot-com fallout.
The study showed that, although many traditional UK companies currently
generate less than five percent of their business online, 56 percent of
these firms expect to see that figure at least double over the next few
years.
The survey Quiet Revolution also found that most firms are more concerned
by delays to the arrival of affordable broadband Internet access than the
string of recent dot-com collapses. The CBI recommends that the
government bring forward its target of 2005 for delivering broadband
Internet access by up to two years to help calm theses fears.
Broadband Internet access is seen as key to the future development of
e-business because software for supply chain planning, customer support
or knowledge management works best over high-speed connections.
Head of e-business at the CBI Nigel Hickson says that the UK's Internet
industry is likely to lag behind those of more forward-thinking countries
in Europe and the rest of the world if the government does not act.
"We know that the government is concerned, and we think they are right to
be. We think it should be more concerned," he says. "If business
expectations are going to be met, this represents a major requirement in
broadband technology. Otherwise it will frustrate business in the UK."
BT has faced criticism for delaying the process of opening up the
networks that would carry broadband service to competition.
Arian Afrough, senior research analyst with IDC's European Telecoms
Group, says that delays to the delivery of broadband Internet will also
prevent companies from delivering content-rich Internet services using
the latest media technologies as well as over-the-Web application
services.
"In Britain, especially, it has taken too long," she says. "BT has
delayed local loop unbundling for some time, obviously to maintain a
competitive advantage."
NTL launched a £5m campaign to promote its own broadband cable network,
although this will not extend into many rural areas of the UK.
Recent high-profile dot-com failures have prompted some observers to
suggest that the Internet boom has officially turned to bust. The CBI
says that while pioneering Internet firms recognised the potential of the
Web, they typically lacked the skills and experience to make this count.
It predicts that the next generation of e-business will make more
productive use of the Internet.
"The first wave of e-business is emphatically over, but the
rags-to-riches-to-rags stories of the dot.com entrepreneurs that have
dominated the headlines have disguised what has really been going on,"
comments Alan Buckle, chief executive of KPMG Consulting. "A quiet
revolution has begun inside British business, imaginative companies in
all areas of the economy have been embracing Internet technology".
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