e-commerce: the Social Context (2000)

E-CommerceE-Commerce

The Social Context

Prof. Peter E. franksUniversity of the North

2000

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E-Commerce - The Social Context 3

The Social Context ofThe Social Context of e-Commerce e-Commerce

E-Commerce: Fad or RevolutionSocial Implications of e-Commerce

The digital divide

e-Commerce e-Commerce : :

Fad or RevolutionFad or Revolution


e-commercee-commerceE-commerce is to the Information Revolution what the railroad was to the Industrial Revolution – a totally new, totally unprecedented, totally unexpected development. And like the railroad 170years ago, e-commerce is creating a new and distinct boom, rapidly changing the economy, society, and politics.”Peter F. Drucker, 1999


Revolution in retailingRevolution in retailing“Commercial transactions have taken place for centuries, but currently there is a revolution taking place that is transforming the marketplace. The transformation is occurring because the relationship between organisations and customers is increasingly being facilitated through electronic information technology.”Strader & Shaw (1997)


Distance is eliminatedDistance is eliminatedIn the new mental geography created by the railroad, humanity mastered distance. In the mental geography of e-commerce distance has been eliminated. Ther is only one economy and only one market. …every business must become globally competitive.”

Peter F. Drucker, 1999


The Political ContextThe Political Context“Technology was not the cause, only the medium. The source of globalisation was the process of capitalist restructuring that sought to overcome the crisis of the mid-seventies.” Without state’ “decisive deregulation, globalisation could not have taken place.”

Manuel Castells, Leadership, August 2000, p.64


Markets for FreeMarkets for Free

How can the poorest countries allow access to their markets for free.In some cases it is all they have


Mass suicide of StatesMass suicide of States“It became a kind of mass suicide of states, because, “once the process of globalisation was put into motion, it became largely out of control from the hands of states.

The curent system – at least in the short term – is working to the great advantage of the US economy and US firms, particularly financial firms which are channeling a growing proportion of global investment.”

Manual Castells, Ledership, August 2000, p. 64


The future of e-The future of e-commercecommerce

There is a bright future for e-commerce. Once the details of online commerce are worked out, it and the internet in general could reshape the structure of the business worldThe huge growth of virtual communities – people getting together in ad-hoc interest groups online – promises to shift the balance of economic power from the manufacturer to the consumer.

Hagel & ArmstrongMcKinsey & CoInternational Management Consultants


ee--ggeenneerraattiioonn’s’s vivisision:on:76% - a revolution, on par with the industrial revolution

22% - an important change,but not one that will change society in revolutionary ways

1% - a change of limited social significanceSurvey conducted among entrants for the International Management Symposiums “wings of excellence” award. (Sunday Times, Business Tmes, May 21, 2000, p 1)


HoweverHowever“It is not yet clear what kinds of goods and services will be bought and sold through e-commerce and what kinds will turn out to be unsuitable for it”

Drucker 1999


In additionIn additionMany companies have incorporated the Inter-net into their business practices, but as yet it is a virtual arena of indeterminate commercial value. For most sectors, this new communication medium offers the opportunity to expand global markets, or to enter completely new market areas. While the commercial potential of the Internet has been forecast, there are wildly conflicting estimates about the rate and extent of its adoption.


ContinuedContinuedFor example: according to Healey and Baker, the inter-national

real estate consultants, “By 1997, 5 per cent of all retail spending in

England, Scotland and Wales will be done over the Net” (Computing, 1996);

“By the year 2005 it will capture between 8 and 30 per cent of the UK retail market” (Pavitt, 1997);

“electronic sales will only represent 1 per cent of all retail spending by 2001” (Verdict, 1998); and

“it will be 30 years before 30 per cent of consumer activity takes place online” (Economist, 1997).


Some realismSome realism Jim Galvin Director of Security and Payments Research, Commerce Net wrote:

“The real issue is that in order for the scenario to work the consumer has to change the way the entire transaction is executed. Independent of whether the new way …is better, it will take at least a generation to change the mass market shopping experience.”

“The further away from existing practices the “new scenario” is, the longer it will take to realize market penetration”

Alta Vista Forum, http://209.207.207.212/forums/aca-1/dispatch.exe/ecommerce/browse/thread/t…/100103, 01/22/97 12:43 PM


The bottom lineThe bottom line“Despite the optimistic tone of some of these predictions, there is little evidence to suggest many companies have developed on-line trading. Indeed, KPMG and OXIRM (1996) observe that “much of the debate still centres on the medium’s potential rather than its actual performance, accessibility and content”


Social Implications of Social Implications of e-Commercee-Commerce

Towards a conceptual model Virtual reality, illusion and reality

Organisation and workProductivity ?From Government to GovernanceCommunities/Networks VS negative totalities


A CONCEPTUAL FRAMEWORK FOR THE STUDY OF THE IMPACTS OF THE NTERNET john A. Daly 1999


But, e-Commerce is But, e-Commerce is moremore

“Electronic commerce … holds promise in areas such as eduction, health and government.”“E-Commerce has the potential to radically alter some economic activities and the surrounding social environment’OECD 1999

One can add: War, Private life, etc:


e-commerce impacts the e-commerce impacts the whole societywhole society

Access to the digital economy– Network availability– Affordable connectivity– Skills and digital literacy

Confidence and trustStrengthening the social infrastructure

– Education and training– Health– A senseof community

General social effect: TIME


e-commerce impacts the e-commerce impacts the whole society whole society (Continued)(Continued)

Distribution of income and opportunities

Individuals– Income & Power – towards two tiered society

– Ethnicity and race – unequal access– Language – English dominance– Gender - equality– Disability – special needs


e-commerce impacts the e-commerce impacts the whole society (Contd.)whole society (Contd.)

The workplace– Productivity?– Skilled workforce– Unemployment– Organisations

Small business/Monopolies/Competition

Productivity ?Productivity ?

!


E-commerce and E-commerce and economic efficiencyeconomic efficiency

E-commerce will impact costs ranging from:Lower costs of owning and operating an establishment. Its always open, has a global market with fewer variable costs

Reduced inventory costs –Just in time.Improved sales and purchasing systemImproved customer support and after sales service

Decreased distribution costs for services that can be delivered over the net e.g financial services, software and travel.


“This combination has the potential to provide the productivity gains that ‘prove’ the worth of ICT’s and unravel the productivity paradox”

OECD, 1999


The “Productivity The “Productivity Paradox”Paradox”

More than a decade has now passed since concerns about the relationship between the progress in the field of information technology and the improvement of productivity performance in the economy at large crystallized around the perception that the U.S., along with other advanced industrial economies, were confronted by a disturbing “productivity paradox.”


The precipitating event in the formation of this view was the rather offhand observation made in the summer of 1987 by Robert Solow, Institute Professor at M.I.T., and Economics Nobel Laureate. In the course of a book review Solow remarked: “You can see the computer age everywhere but in the productivity statistics.”


“To date, e-commerce has not caused price reductions, but lower costs associated with e-commerce should lead to lower prices as competition is felt, especially in services”

OECD, 1999


e-commerce impacts the e-commerce impacts the whole worldwhole world

Geo-political impacts:– Unequal access and development

There are more phones on Manhattan Island then in the whole of Africa

Half of the world’s population has never made a phone call

– American/European economic, political, social and cultural hegemony

– Emergence of Strategic Information War


The Promise of The Promise of ProsperityProsperity

We Boomers should have recognized the early signs of what was to come, but we completely missed them. We really were trapped in our time. But now, in the year 2050, it's crystal clear. The entire world has made a massive leap forward. By anyone's standards, the world we live in now, in the middle of the twenty-first century, is a much better place to be. You can make the comparison using almost any measurement - general prosperity, improving environment, stable population, technological wonders, scientific breakthroughs, rising standards of living, or lowering levels of poverty, or of violence, or of whatever problem you choose. You pick the category and we¹re much better off today.Who would have thought that by the year 2050 we would be able to pull the vast majority of the world's population into a decent middle-class lifestyle? The average person now lives at a material level once reserved for just elite Western nations. Virtually everyone is beyond the absolutely miserable conditions that more than half the world's population lived in just fifty years ago. Reaching that material threshold took a huge amount of growth in the global economy, and no one ever thought we could do it without completely destroying the environment. We were convinced that the coming century would bring a meltdown in the polar ice caps, rising sea levels, bizarre weather, rampant disease - all of which turned out not to be true. And almost all the basic fears we grew up with - that a faceless enemy will wage total war, that intercontinental nuclear missiles would come screaming over the horizon, that life as we knew it would be eradicated in a flash - all that is gone. When those threats receded, other ones took their place: terrorism, biological warfare, the crazy rogue nation that would still launch nukes. All these things never really materialized, or if they did, we severely contained them or nipped them in the bud. And now we are looking back on 100 years without a major world war. Not since World War II have the world's most powerful peoples waged all-out war against each other. We've had our skirmishes and close calls, but we've now hit a plateau where world war is essentially a thing of the past. Who would have thought it?Long Boom Scenarios, 2000


Same old storySame old storyHere are all these new technologies but they often end up telling the same old stories. They are supposed to be revolutionary and make new experiences possible, whether they are experience of the body, or experiences of space, or experiences of different landscapes and so on. It seems that if you hang in there or you participate or you use them, the narratives that slowly accumulate are the same old stories. The same stories about men and women interacting, or the relationship of or thinking about the body. I have been really intrigued by the fact that, although these are new technologies which should allow us all kinds of creative possibilities, the evidence of creativity is far and few in between. Every now and then you will see an insight or a flash of doing something different with the technology, but for the most part, they end up being the same old thing.Ann BalsamoProfessor of Literature, Communication and CultureGeorgia Tech.1997


How has technology affected areas that How has technology affected areas that are of specific concern to you?are of specific concern to you?

0%10%20%30%40%50%60%70%80%90%

Com m unicationsM edicine and healthcare

EducationThe environm ent

The political system s

Positive im pactLittle effect eitherw ayNegative im pact


Which Internet issues should political Which Internet issues should political leaders focus on?leaders focus on?

Keeping children away from

adult or dmaging

content

Ensuring security of personal inform

ation

Expanding the use of internet in schools

Increasing research and developm

ent toim

prove internet technology

preventing undue censorship of the

internet

Working to provide Internet access to

those Americans who

could otherwise not afford it

0%

10%

20%

30%

40%

50%All adults Internet users


Competition/monopolyCompetition/monopolyJesse Hirsch writes in the Media Jesse Hirsch writes in the Media Collective forum 1996:Collective forum 1996:Economic interests arethe driving force Economic interests arethe driving force behind transformation in media and society. behind transformation in media and society. Integration and convergence are the Raison Integration and convergence are the Raison d’etre of the revolution proclaimed by the d’etre of the revolution proclaimed by the global business elite. …As a result of this global business elite. …As a result of this process,the political, economic, social, and process,the political, economic, social, and psychological character of our society is psychological character of our society is radically transformed.radically transformed.The ‘WallMart Effect’ is a description of a The ‘WallMart Effect’ is a description of a vacuum sucking up local economies. Only a vacuum sucking up local economies. Only a small shift in the flow of capital is small shift in the flow of capital is required to devastate and violently required to devastate and violently imbalance the nature of local and national imbalance the nature of local and national economies.economies.


The Digital DivideThe Digital DivideClass/Ethnic/Cultural/Language/disability divisions

Core Political Economies and the Peripheral Economies – needs Intnl. policies/hegemony

The views from the critical, The periphery & third world


Need for International Need for International Policies/HegemonyPolicies/Hegemony

The Global Information Infrastructure Commission (GIIC) at its Annual Forum in Tokyo in October 1998 presented its goals as:

Stimulate dialogue at country and regional levels on the development of information infrastructure

Encourage global business leadership in the development of effective and enabling legal and regulatory frameworks to maximise the benefits of information technology

Forge partnerships between industry, international organisations and governments in addressing electronic commerce issues


Critical views 1Critical views 1The next revolution - World War III - will be waged inside your head. It will be, as Marshall McLuhan predicted, a guerrilla information war fought not in the sky or on the streets, not in the forests or around international fishing boundaries on the high seas, but in newspapers and magazines, on the radio, TV and in cyberspace. It will be a dirty, no-holds-barred propaganda war of competing worldviews and alternative visions of the future.


We culture jammers can win this battle for ourselves and for planet Earth. Here's how. We build our own meme factory, put out a better product and beat the corporations at their own game. We identify the macromemes and the metamemes - the core ideas without which a sustainable future is unthinkable - and deploy them.

Culture Jammers


Hackers? Good or EvilHackers? Good or Evil“Hacking and computer intrusion. Is the kid who hacks into a university mainframe a thief? A burglar? A trespasser? Should the courts throw the book at him? Should he be prosecuted at all? Are hackers threats to our privacy? Or are they the pillars of our future industrial competitiveness? Are they motivated by curiosity, love of technology, or something more sinister?” Foreword to Peter Ludlow's HIGH NOON ON THE ELECTRONIC FRONTIERBy Mike Godwin


The five most potent metamemes in the culture jammer's arsenal: · True Cost: In the global marketplace of the future, the price of every product will tell the ecological truth. · Demarketing: It's time to unsell the product and turn the incredible power of marketing against itself. · The Doomsday Meme: The global economy is a doomsday machine that must be stopped and reprogrammed. · No Corporate "I": Corporations are not legal "persons" with constitutional rights and freedoms of their own, but legal fictions that we ourselves created and must control. Media Carta: Every human being has the "right to communicate" - to receive and impart information through any media. Meme warfare - not race, gender or class warfare - will drive the next revolution

../../../../../campaigns/media/


Differences between Differences between Imperialism and Accelerated Imperialism and Accelerated

GlobalizationGlobalization Imperialism

State-centric, balance of power Primarily political Multidimensional

Territorial

Directed by metropoles

Clear division colonizer±colonized

Accelerated globalization Multiple actors and ®elds

(technology, corporations, states, international institutions, civic organizations)

Non-territorial

No central powerhouse; absence of a global hegemonic power

Blurred division between inclusion /exclusion from `interlinked economies‘Pieterse, 2000


Guy Debord, Guy Debord, Society of the Society of the Spectacle, 1967Spectacle, 1967In 1988, De Bord,Commenting on the Society of the

Spectacle, which he had written 21 years before outlined three Societies of the Spectacle:

1. Stalinist Russia and Nazi Germany characterised by concentration

2. USA following WWII – characterised by diffuseness3. The recent past – characterised by its

integrationIn this post-historical world in which we live, blackmail was the principal weaponFrom M. Perniola, 1995


The Worst Case The Worst Case scenario?scenario?“The Internet is the product of the

Pentagon, and all the satellite technologies were initially military. They achieved the militarization of knowledge, Which is an unthinkable phenomenon. The militarisation of science with the military-scientific complex and the militarization of all information with the military-informational complex confront us with a phenomenon of totalitarianism that has never existed before.Paul VirilioThe Politics of the very worstNew York, Semiotext(e) 1999


Technological Marshal Plan for Technological Marshal Plan for 4th World4th World

“The notion that South Africa per se can lift the rest of Africa out of underdevelopment is not realitic. In fact, it would be quit enough – and quite remarkable - if the country itself succeeds to survive in thisnew economy.It cannot be the engine of Africa.”A technological Marshal Plan is needed

– Manuel Castells, Quoted in Hein Marais, sink or Swim, Leadership, August 2000

e-commerce: the Social Context (2000)

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