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measuring Scotland's progress towards A SMART, SUCCESSFUL SCOTLAND
more e-business
LEAD INDICATOR
3A - PERCENTAGE OF BUSINESSES TRADING ON-LINE
Why this measure?
The Internet opens up a global market to Scottish companies. The percentage of companies making use of on-line trading gives an indication of how well Scottish business is engaged with the global marketplace. Of course trading on-line is not appropriate to all businesses so the supporting indicators broaden the analysis to show the range of ways in which e-business can be used to increase productivity and improve performance.
How does Scotland perform?
Percentage of employment in businesses trading on-line5(2002)
Using employment in companies trading on-line places Scotland in the 2nd quartile of an OECD sample of 10 countries. Against the group of comparator countries it performs well, doing better than the UK and considerably better than Japan. The top-ranking country was Australia with 39% of businesses trading on-line. Scotland performs well, and though the sample of 10 countries available is small it does contain all of Scotland's G7 partners A larger percentage of Scottish firms trade on-line than is the case in the UK, in fact Scotland has overtaken the UK moving from 20% to 29% of employment being in firms that trade on-line between 2001 and 2002. For the UK the increase was from 24% to 26%.
What does this mean for Scotland?
Scotland's performance, at over a quarter of businesses trading on-line, represents considerable engagement with on-line trade. It should be noted that Scotland enjoys relatively low levels of "mainstream" 6 broadband costs. (Indicator 6a - cost and coverage and broadband). It does not lag far behind the leader in the field, Australia with 39%, and does considerably better than the poorest performing country, France with 8%.
3B - PROPORTION OF BUSINESS ACTIVITY TRANSACTED THROUGH E-BUSINESS
Why this measure?
This measure is based on the value of sales made through e-business as a proportion of the value of total sales of those firms that allow customers to order on-line. This measure is important because it shows how well businesses are using the Internet as an integral part of their sales focus.
How does Scotland perform?
Proportion of business activity transacted on-line (2002)
Scotland (21%) lies in the first quartile of an OECD sample of 11 countries. Only Japan and the USA perform better. Against the comparator countries Scotland does equally well and outperforms the UK and Germany. Since the last study (2001) Scotland's sales value recorded on-line has increased from 17% to its current 21%.
What does this mean for Scotland?
Those Scottish businesses that do trade on-line make good use of the technology. Scotland's high ranking amongst OECD countries shows that the firms that are using the Internet to advertise their products and conclude sales are exploiting the opportunity to access a global marketplace comparatively well.
3C - SHARE OF BUSINESSES USING BROADBAND7
Why this measure?
Broadband technology is far in advance of standard modem connections. It allows much faster transfers of data and allows businesses to make more use of the Internet. A recent survey by the Federation of Small Businesses in Scotland (May 2002) found that more than three-quarters of businesses using broadband technology have experienced enhanced productivity as a result. The share of businesses using broadband will, however, be limited by the coverage available. At present some areas of Scotland do not have access to broadband connections.
How does Scotland perform?
Percentage of employment in businesses using broadband (2002)
Scotland lies in the fourth quartile of a 10 country OECD sample. The measurement used for this indicator is employment in firms with broadband. Scotland's performance is someway behind its competitors and behind the UK as a whole. The top performing country is France (70%) followed closely by Sweden (68%), with Australia (34%) as the poorest performer. It should be noted that this measure differs from that used in last year's report as the definition has been broadened to include more broadband connection methods.
What does this mean for Scotland?
To allow broadband to have as big an impact on the Scottish economy as possible coverage must be developed. There are large areas of Scotland unable to utilise this technology and they are excluded currently from its benefits. However, broadband will only make a difference if businesses take up the opportunity to use it. With only 41% of employment in businesses using broadband at present the task is not only to develop the infrastructure of the network, but encourage those businesses with access to use it. Given the relatively low costs of mainstream broadband services (Indicator 6a), Scotland should be well placed to utilise broadband technology if coverage is extended and take-up encouraged. Efficient and effective use of this technology requires companies to enhance staff skills, commit adequate resources and plan effectively for its use within their business.
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