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Conditions for the Development of New Ways of Working and Electronic Commerce in Denmark

by:
Logo teledanmark
Tele Danmark Consult A/S
Fabrikvej 11
P.O. box 2245
8260 Viby J
Denmark

Tel.: +45 86 28 64 55
Fax: +45 86 28 64 99

Main Office:
H. P. Hansens Gade 21
6200 Åbenrå

Tel: +45 74 63 22 44
Fax: +45 74 63 05 8

Email: tdconsult@tdk.dk
www.teledanmark.dk/english/organisation/consult/menu/start.htm

Contact
empirica

Gesellschaft für Kommunikations- und Technologieforschung mbH, Oxfordstr. 2, D-53111 Bonn

Tel.: (+49 02 2) 9 85 30-0, Fax: (+49 02 28) 9 85 30-12, Email: info@empirica.com, http://www.empirica.com, http://www.ecatt.com, Contact: Werner B. Korte

Table of Contents:   complete version

1. Executive Summary

Current state
Liberalisation
    Measurement of liberalisation
Ecommerce
    Recommendation/warning
Telework
Information Society
Technology uptake
    Internet
    Home PCs and EPCDL
    ICT in Schools

2. Introduction

Some technology history

3. The Policy Background in Denmark

Telecommunication liberalisation, tariffs, availability, etc.

Liberalisation in fixed networks
Market shares in the Danish telecommunications networks area medio 1999
Liberalisation in mobile networks
Liberalisation, competition and growth in fixed networks in Europe (Mannesmann Index MAX)

Internet access policies and tariffs
Specific telework and e-commerce policies
    National level initiatives and policies
    Regional initiatives and policies
Information society initiatives
     National Information access points
Significant private sector initiatives
     Danish Data Association (DDF)
     The free home-PC
     Guidelines for Flexible work
     A multitude of researches
     FDIH
     Dansk Handel og Service
Activities in unions
     HK - The Trade- and Office Workers' Association
     Agreements between labour market parties
Educational initiatives
     The Sektornet - the complete network solution for the entire educational sector
     SkoleKom
     EMU
     SkoDa
     The blueprint from 1997 "Information Technology and Education".

4. Electronic Commerce and Telework Penetration and Trends: The Main ECATT Findings for Denmark

Electronic Commerce

PC and e-mail usage, Internet and online services access and use by the population
Online activities with relevance for electronic commerce: online shopping and banking by the population
Barriers to online shopping
Advantages of online shopping
E-mail usage, internet and online services access and use by establishments
E-mail and Internet access in Danish establishments
Online and electronic commerce activities by establishments
Barriers to online sales and online procurement

Telework

Telework penetration and growth
Number of Teleworkers in Europe 1999
Interest in and potential of telework
Characteristics of telework and teleworkers
Telework practise by establishments
Barriers to Telework
Telework potential, trends, prognosis
Resume

5. Conclusions

Electronic Commerce
Telework
Telecommunications policy and pricing
     Recommendations

6. Annex

A1 List of IS initiatives

Danish national IT-policy since Info2000 – the Danish report about the Information Society/1994 and the following IT-policy action plans
External activities
Internal activities
Education and Research
Business and Enterprise
Active telecom liberalisation policy.

A2 - Extract from the October 1999 report Digital Denmark with the newest IT strategy.
Summary

The Challenge
The Development of the Network Society
A Danish Standard of Values
The Danish Conversion Potential

Objectives and Recommendations

Objective 1 Life-long Learning for All
Objective 2 Denmark as an E-commerce Nation
Objective 3 More Effective and Cheaper Service via Digital Administration
Objective 4 Danish Internet Initiatives
Objective 5 IT Lighthouses in Denmark
Follow-up

  1. Executive Summary

Current state

This report seeks to describe conditions for new ways of working and electronic commerce in Denmark. It comprises a comprehensive study of use of ICT and attitudes to use carried out in 10 European countries in May 1999 (some penetration figures have grown since). In all respects Denmark falls between the five most advanced countries, in many cases between the three countries with the highest ICT uptake with only a few exceptions.

The report is a mixture of hard facts from the research of May 1999 - supplemented where possible by new figures from other sources - and descriptions of conditions for example governmental or other initiatives that seem to have had a substantial influence on development.

It is noteworthy that there seems to exist a ‘north and south’ divide, which is not immediately explained by correlation to a single specific factor. The most advanced countries are Finland, Sweden, Denmark, Nederlands and UK, Germany is at the average while Italy is the absolute laggard.

Liberalisation

One of the factors that have pushed development in Denmark was the decision to advance liberalisation 1 ½ year in advance of the EU directive. As a side effect Tele Danmark gained valuable experience with traffic interconnection negotiations later made useful in competing markets outside Denmark.

Measurement of liberalisation

Mannesmann has developed the so-called Mannesmann-Index (MAX). Mannesmann has only recently and for the first time published the MAX-results for eight European countries and the USA. So far MAX only focuses on the fixed network market and leaves aside the mobile telecommunications market. MAX is composed of three sub-indexes covering the issues of:

  1. liberalisation
  2. competition and
  3. growth

The arithmetical average of these sub-indexes is used to generate the Composite-MAX, which evaluates the potential market development (liberalisation) on the one hand and the real market development (competition and growth) on the other.

According to MAX, liberalisation is most advanced in the UK and Denmark. Some European countries are seen to be ahead and more advanced than USA.

See figures and more in section 3.

ECommerce has not exactly boomed - taken in its broadest sense. B-to-B e-Trade develops – not surprisingly – fast because enterprises are in a process of ICT based supply chain integration, which eCommerce is an inherent part of. B-to-C e-Trade develops very slowly in all countries, a fact that seems to surprise many stakeholders in e-retail. The research data shows that consumers unanimously do not find online shopping necessary, but rather supplementary. Ordinary consumers are not in a process of changing "supply chain" since retail structures in most areas are intact and fully sufficient to satisfy most needs. Policy makers should note these contrasting attitudes. Changes in working culture and demographic changes in peripheral areas could give rise to some need for B-to-C eTrade. Recent developments seems to indicate that there is a slightly growing interest and eTrade could probably develop faster in cities than in rural areas since logistics is more likely to be profitable in densely populated areas.

There is a basic difference between enterprise reasoning and individual human reasoning. Need and necessity are of cause major incitements, but more factors that appear as irrational - but probably in reality are not - seem to govern human behaviour concerning use of new technology.

Recommendation/warning

It is worth while to consider potential side effects of future policies, which could unintentionally intervene with existing structures, like the retail structure. Retail infrastructure could unintentionally be threatened in places where a change would cause a problem, for example in rural areas. An overlooked example of an unintentional side effect is that the popularity of the free employer-paid home PC in Denmark has moved private homes' sales channels from small local suppliers and for example Danish computer manufacturers to enterprises' PC suppliers - normally representatives for large international companies. The small local IT actors suffer very much from this development, which threaten to destroy an otherwise fruitful local knowledge, skills and service structure, prior kept alive by sales to private users.

Another hazard area is public procurement. Recently the Minister of Finance encouraged public institutions and municipalities to use the Danish public procurement service, SKI, more, see EcaTT case stories www.ecatt.com > case stories > Denmark > electronic commerce > SKI.

Municipalities should be aware that they risk to impair the vulnerable retail structure in thinly populated areas with the result that they will have to subvention shops explicitly or alternatively cater for daily groceries to movement impaired elderly in other ways. Centralised public procurement is promising but the application in the individual local area should be considered in a broad - holistic - perspective taking into account possible side effects.

Telework

Telework has grown faster than estimated. The latest estimate shows that about 300.000 Danes practice flexible work, i.e., telework. It is the general perception that the great interest in telework and flexible work in Denmark is a ‘culture shift‘ phenomenon being enabled by emergence of affordable ICT and suitable access solutions in enterprises.

Information Society

The Danish government set the agenda for introduction of the Information Society with the Info2000 plan in 1995. Since then the government and administration have been major locomotives in the process of transition. It only takes a glance at the publication list of the Danish Ministry for Research and Telecommunication to get an impression of the extent (www.fsk.dk ...>publications). Compared to many other European countries Denmark is well ahead in several respects.

Technology uptake

Internet

>50% of households are on Internet and more are expected to join in near future, and almost 70% of the households own one or more PCs (latest figures from April 12 2000) Most enterprises are on Internet.

Home PCs and EPCDL

Employer paid or financed home PCs in exchange for spending leisure time on IT –skills improvement has been an enormous success in Denmark, despite the difficulties with finding suitable tax arrangements for all groups of employees. Figures estimated recently indicate that around 275.000 participate in the arrangement.

ICT in Schools

At the end of 1998 nearly 50% of approx. 4,000 Danish educational institutions were connected to the Sektornet, the gateway to the Internet for more than half a million Danes. Schools invest in new computers and the pedagogical version of EPCDL is catching on aiding the implementation of IT in all subjects.