Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - eEurope Benchmarking Report - eEurope 2002
Date: 2002-02-05
Institutions: European Commission
Subjects: EU action, Internet, action programme, comparative study, competitiveness, information technology, new technology

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 5.2.2002
COM(2002) 62 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND
THE COMMITTEE OF THE REGIONS

eEurope Benchmarking Report

TABLE OF CONTENTS

1. Introduction.............................................................................................3

2. Measuring progress of eEurope 2002 ......................................................3

2.1. Benchmarking approach................................................................................ 3

2.2. Internet penetration ....................................................................................... 4

3. Cheaper, faster and secure Internet..........................................................6

3.1. Cheaper, faster Internet ................................................................................. 6

3.2. Investing in people and skills....................................................................... 10

3.3. Stimulate the use of the Internet .................................................................. 13

4. Conclusions...........................................................................................17

2

1.

INTRODUCTION

The Lisbon European Council set the objective for the EU to become the most
dynamic knowledge based economy in the world by 2010. The eEurope Action Plan
2002 - endorsed at the Feira European Council in June 2000 - is a central element of
this strategy to transform the European economy.

The overall objective of eEurope is to bring Europe online as fast as possible. In
pursuing this objective the Action Plan targets three areas:

i.

ii.

cheaper, faster and secure Internet

investing in people and skills

iii.

stimulating the use of the Internet

support

existing

financial

re-focusing

programmes;

The eEurope Action Plan is built upon a methodology which consists of accelerating
legal measures;
and
benchmarking. There have been two previous reports, one to the Nice European
Council and one to the Stockholm European Council1, to assess progress in the
execution of the Action Plan. These reports have mainly described the various policy
measures, in particular progress in legislation, and assessed their impact. Since then,
information about progress made has been regularly published on the eEurope
website.2 Benchmarking has only been rudimentarily looked at in these reports as
both the definition of the benchmarking methodology and data collection took some
time. This Communication is predominantly devoted to benchmarking. An update on
progress in the various actions can also be found on the eEurope website.

The objective of this Communication is (i) to give a first comprehensive overview of
the benchmarking results, (ii) to compare policy progress with market developments,
and (iii) to draw some conclusions for the final year of the eEurope Action Plan and
to consider if further action is needed after 2002.

2.

MEASURING PROGRESS OF eEUROPE 2002

2.1.

Benchmarking approach

The Lisbon European Council established that progress towards the knowledge based
economy should be monitored through an 'open method of co-ordination'3.
Benchmarking national performances
this approach.
Benchmarking works within a political context, in this case the eEurope action plan
and also within the wider framework of the Lisbon strategy. It must be designed in a
way to be relevant to policy decisions. Benchmarking is not an end in itself and it is
not a purely statistical exercise.

is a key element of

1

2

3

Nice: The eEurope Update, COM(2000) 783, November 2000; Stockholm: Impacts and Priorities
COM (2001)140, March 2001.
http://europa.eu.int/information_society/eeurope/benchmarking/index_en.htm
The commission has recently presented its review of overall progress in the Lisbon Strategy ("The
Lisbon Strategy - Making change happen" COM(2002) 14).

3

Therefore this benchmarking exercise is linked to the specific action lines of
eEurope. It is based on a list of 23 indicators which were discussed with Member
States and endorsed by the Council on 30 November 20004. On the basis of these
indicators the Commission has launched a data collection exercise. For data
collection, the following guidelines were applied:

i.

ii.

One methodology for all Member States5.

Data should be recent: Internet statistics quickly become dated and lose their
relevance to policy development.

iii. Data to be cross-checked with existing data sources from Member States,
notably statistical offices, other international institutions such as the OECD,
and private sector studies.

iv. Data covers all 15 Member States and Norway and Iceland6 and, where

possible the US, which gives additional results for comparison.

Data related to most of the indicators can now be presented and analysed.
Detailed data tables are available on the eEurope website7 and the communication
will focus on the most salient points for policy making.

2.2.

Internet penetration

The assumption behind the 64 targets of eEurope was that they would have an impact
on Internet penetration and eventually Internet use which are central objectives of
eEurope. This section will therefore first review where the EU is in Internet
penetration before the following chapters show what progress has been made in the
three action areas.

Internet penetration is measured in two ways: how many private households have
access to the Internet; and, how many people use the Internet regularly whether at
work, at home, at school, or elsewhere.

Internet penetration in EU households increased from about 18% in March 2000
to 28% in October 2000, 36% in June 2001, and now, in December 2001, stands at
38%. This means the rapid take-up during 2000 and early 2001 may have reached a
plateau. The next measurement in May 2002 will test if this is true. Available
national statistics seem to confirm this trend.

take up may be explained by the fact

that Internet
The slowdown in Internet
connections are linked to the availability of Personal Computers which sets an upper
ceiling to penetration. Internet through TV sets and mobile devices remains marginal
but may grow rapidly in future. The EU countries with the highest penetration levels
have reached Internet penetration rates of around 60% of households and further
growth will be limited. The fact that they may no longer be driving EU Internet take-
up may also explain the slow down in EU growth.

4

5

6

7

13493/00 ECO 338.
Ideally, the complete and harmonised data would have been provided by the National Statistical
Authorities. However, this was not possible in the time available which meant that the Commission
collected the data.
Benchmarking was financed by the PROMISE programme in which both countries participate.
http://europa.eu.int/information_society/eeurope/benchmarking/index_en.htm

4

Internet use in the whole population is higher than that shown by household
penetration rates. In November 2001, almost 50% of the population (over 15 years)
used the Internet either at home, at work, at school, in public access places or on the
move. Over 80% of Internet users go online at least once a week. In absolute
numbers there are nearly as many Internet users in the European Union as there are
in the USA. Usage has increased in all different locations but by far the highest
growth is in use at home. However, growth in Internet penetration in Europe has last
year still been slower than in the US.

Chart 1 shows Member States Internet penetration in November 20018. A group of
3 countries leads the EU with household penetration rates of close to or above 60%
and 4 others are significantly higher than the EU average9. There are 4 countries
within 5% points of the average whilst 4 countries are well behind the EU average.
Greece is an outlier with penetration of less than 10% a figure which remained stable
over the past year. The leading Member States are better placed than the US which
can be considered as a benchmark for Internet penetration. The results are generally
encouraging but there remain areas of slow growth and big differences between and
Internet Penetration
(% EU Households connected, December 2001)

CHART 1

70%

60%

50%

40%

30%

20%

10%

0%

EU average = 37.7%

NL

S

DK

FIN

UK

IRL

A

L

D

B

I

F

P

E

EL

Source: European Commission (Eurobarometer, December 2001)

within Member States. For example, 40% of women use the Internet, in comparison
to 56% of men. This difference changed only marginally during the last year: in
October 2000, 35% of women and 50% of men answered that they used the Internet.
Internet usage is particularly high amongst young people,
those with higher
education and those who live in a city.

Internet penetration in businesses is far higher than the household rate and now
almost 90% of enterprises with more than 10 employees have got an Internet
connection. More than 60% have a website. A notable exception is Portugal where
Internet penetration in businesses only reaches two thirds of all enterprises and only
about a third of companies have their own site. More detail on Internet use by
businesses is given in the discussion of eCommerce below.

8

9

Note that surveys are based on telephone interviews. Households without a fixed telephone can be
considered not to have an Internet connection at home. Therefore, penetration rates tend to be slightly
overestimated.
This is a weighted average based on the national populations.

5

The conclusion is that several EU Member States should make more efforts to
create a more favourable environment for higher levels of Internet penetration.
By the end of 2002, a minimum of 30% household penetration and an EU
average of 50% could be achieved.

3.

CHEAPER, FASTER AND SECURE INTERNET

3.1.

Cheaper, faster Internet

More competition is driving prices down

Chart 2

Internet Dial-up Access Costs
Residential user: 20hours off-peak

sept-00

aug 01

P
P
P
$
S
U

$50

$45

$40

$35

$30

$25

$20

$15

$10

$5

$0

N
F

I

K D
U

K F E I S A
D

L
N

L P L B
R

I

L
E

U
E

A
S
U

Source: OECD

statistics

Internationally
have
available
shown a clear inverse relationship between
Internet price and penetration. However, the
objective of a cheaper Internet should not be
confused with Internet at an artificially low
or
approach of
eEurope is to stimulate competition to drive
prices down to competitive levels away from
monopoly prices. This has proved successful
as regards Internet access by a standard dial-
up telephone line. Prices for Internet access

subsidised price. The

$140

$120

Chart 3

Internet Dial-up Access Costs
Business user: 40hours at peak times

by standard telephone have been going
down continuously and substantially
in the last two years. A Commission
survey, carried out in November 2001,
found that
for a typical residential
user, i.e. 20 hours of usage off-peak,
monthly costs are now between
10-
20 for
in most
the cheapest offer
Member States, including call charges.
Thus, the marginal costs of Internet
access for a PC owner have become
small, but still remain significantly higher than in the United States They are also
much higher for broadband Internet access. A first overview of the costs for
broadband access can be found in chart 2.

L I A E S
E

L P L B
N

P
P
P
$
S
U

sept-00

aug01

Source: OECD

K D
U

K F
D

€

N
F

L
R

$100

$20

$40

$60

$80

$0

I

I

U
E

A
S
U

Chart 4

ADSL Prices, December 2001
(Lowest monthly cost of 1megabit/sec)

T
A
V
c
x
e
P
P
P

t
a
o
r
u
e

120

100

80

60

40

20

0

Competition not only drives down prices
but also leads
to innovative pricing
models. One example is the introduction
of 'unmetered'10 Internet access in some
EU countries (e.g. the UK).

Stimulating competition was the central
goal of
the telecom
sector on 1 January 1998. Since then, the
state of competition in the market has

liberalisation of

S
Source: European Commission (Teligen)

DK NL

D

B

F

FIN

L

A

I

UK

E

P

EL

IRL

10

Unmetered access means a fixed price is paid regardless of how long is spent online.

6

package

been monitored
the Commission
by
Implementation Reports11. Recently, a new
regulatory
electronic
communications services has been agreed
which, when transposed into national law
by Member States in Spring 2003, will
further strengthen competition.

for

Internet is slowly becoming faster

Chart 5

Cable  Prices, December 2001
(Lowest monthly cost of 1megabit/sec)

T
A
V
c
x
e
P
P
P

t
a
o
r
u
e

70

60

50

40

30

20

10

0

E

N
F

I

K S B D F
D

K A
U

L P
R

I

L
N

L I L
E

Source: European Commission (Teligen)

A slow Internet has some major obstacles
for a rapid commercial use. The speed of Internet is an obstacle for two reasons. The
time taken to search through alternative multi-layered web sites deters people either
because of the inconvenience or the expense. Secondly, through TV, people are used
to multi-media and audio-visual rich content. This cannot be offered adequately over
the Internet of today. The Commission has recognised the importance of broadband
Internet access as a "key factor for improving the performance of the economy" in its
Report to the Spring European Council in Barcelona12.

The backbone infrastructure of the Internet is generally very fast fibre optic rings laid
into the ground. The problem is the legacy of narrowband infrastructure which
connects this backbone to homes. This is gradually being tackled by ADSL13 which
along with cable offers a first step towards broadband. Other alternatives are also
emerging through satellite, interactive digital TV, broadband fixed wireless access,
fibre connections to the home; but as yet they remain insignificant.

Available figures on the number of residential broadband connections indicate that
broadband roll out varies widely between Member States: Germany has more than 2
million ADSL subscribers, Belgium almost 500,000 and the UK has 250.000 whilst
in Greece there are no broadband services available. Not surprisingly, it is those
countries with extensive cable TV networks14 which lead in Internet via cable
modem. These countries also benefit from the competition between cable and ADSL
providers. Unbundling has only brought limited competition to ADSL supply but
some incumbent operators have opted
for a positive marketing strategy for
ADSL to establish market share in the
face of competition from cable.

National Research Networks
Core speeds of national networks Dec 
2001

CHART 6

10

c
e
s

r
e
p
s
t
i
b
a
g
G

i

9

8

7

6

5

4

3

2

1

0

NL

I

D

EL FIN UK

F

A

B

IRL

L

DK

S

E

P

Source: European Commission (Terena)

Fast research networks: a special case

eEurope has
tackled one particular
aspect of broadband by creating a high
speed backbone for universities and
research institutes. Research networks
can be used as a testbed for new Internet

11

12

13

14

http://europa.eu.int/information_society/topics/telecoms/implementation/annual_report/7report/index_en.htm
"The Lisbon Strategy — Making Change happen", COM (2002)14 and the supporting Staff Paper,
SEC(2002) 29, 15.1.02.
Asymmetric Digital Subscriber Line: a technology which converts a normal, copper-twisted pair
telephone cable into a high speed downstream digital line.
E.g. Belgium and the Netherlands have a cable penetration of more than 85% of households.

7

technologies and they are expected to pull demand for more bandwidth.

The Commission has co-funded the work of 27 national research and education
networks, including all Candidate countries, to upgrade their network. In December
2001, the GEANT15 network, after a major upgrade, reached a maximum speed of 10
Gigabit/s. This European research network has now become the fastest in the
world, offering the widest geographic coverage (32 countries). It is a much
needed infrastructure tool for the establishment of the European Research Area. An
important goal of the Lisbon strategy towards the most dynamic knowledge-based
economy in the world has been realised with the high-speed interconnection of more
than 3000 research and educational institutions. This increase of European backbone
capacity allowed national research networks to significantly increase their access
capacities to the backbone (cf. Chart 7).

Despite this success, the core speeds of national networks vary significantly between
Member States as shown in chart 6. This has an impact on the possibilities for
researchers to exploit the capacity of the
European research network.

CHART 7

National Research Networks
National Access capacity to GEANT (Dec 2001)

are

The
eEurope Action plan aimed to
interconnect high-speed research networks
not only to universities, but also to schools.
connected,
Most
universities
solutions
occasionally with innovative
(such as wireless campus networks) but
few schools. As a result more efforts are
needed
national
interconnect more
networks
learning facilities to these networks.

further
to

upgrade

and

to

c
e
s

r
e
p
s
t
i
b
a
g
G

i

6

5

4

3

2

1

0

DK FIN

S

E

B

D

F

I

NL UK

A

EL

IRL

L

P

Source: European Commission (Terena)

June 2001 December 2001

A more secure Internet

For computers and communication networks everywhere, security has become a
major concern. During the short period of eEurope there has been a visible increase
in threats and security incidents. Virus attacks in particular have become much more
common as shown in chart 8.

eEurope also benchmarks the use of protection systems. Available statistics show
how the number of servers equipped with an SSL16connection has increased
considerably during the last year (see chart 9). However, no EU country has even
half as many SSL servers per capita as the USA.

15

16

Gigabit European Academic Network (http://www.dante.net/geant)
SSL is secure socket layer, a protocol for encrypted transmission over TCP/IP networks i.e. web sites
starting https://.

8

CHART 8

Security 

(% Internet users who have experienced viruses)

35%

30%

25%

20%

15%

10%

5%

0%

NL

FIN

B

DK

A

S

I

IRL

L

UK

Source: European Commission (Eurobarometer)

F

P

E
Oct. 2000 Dec. 2001

EL

D

EU

Progress to improve protection against security threats is slow. An electronic
signatures Directive17 was adopted by the EU but use of this form of authentication is
limited. The roll out of a more secure Internet Protocol is only slowly progressing.
eEurope has triggered a major industry-led smartcard initiative backed by
100m
research funding. The market prospects for smart cards, cards equipped with
microprocessors or memory chips, such as bank cards, are positive and there is
already the equivalent of 1 smartcard per person in Europe.

€

CHART 9

t
n
a
t
i
b
a
h
n

i

n
o

i
l
i

m

r
e
p
s
r
e
v
r
e
s

350

300

250

200

150

100

50

0

Source: OECD

Secure servers

July 2000

July 2001

L

S

UK

FIN IRL

A

DK

D

NL

B

F

E

I

P

EL USA

Against this background, the initial eEurope security approach has now developed
into a more comprehensive approach of network and information security. On the
basis of a Communication by the Commission18 and a Council Resolution19,
Commission and Member States will take a series of measures in 2002 encompassing
awareness-raising, technological support, regulation, international co-ordination. The
establishment of a cyber security task force is envisaged and will allow the Union to
give a more efficient response to security challenges in future.

17

18

19

Directive EC 99/93, entry into force 19.07.2001
COM(2001) 289 of 6 June 2001.
14378/01 of 6 December 2001.

9

3.2.

Investing in people and skills

This objective covers two essential elements of the Lisbon strategy: to give people
the skills to exploit information and communication technologies; and, to ensure that
no-one is excluded from the benefits of the information society.

Internet in schools

The public sector promotes skills development mainly through education. eEurope
the eLearning
concentrates on infrastructure and access to the Internet whilst
initiative20 promotes new ways of
learning in the knowledge based society.
Connecting all schools to Internet by the end of 2001 was an eEurope target. This
was all but achieved in May 2001 when more than 80% of EU schools were on-line.
However, being a student in a school connected to the Internet does not necessarily
mean that one has access to the Internet. Neither does it imply that the Internet is
being used for learning. In over 10% of schools connected, pupils did not have
access as the Internet was being used for administrative rather than educational
purposes.

CHART 10

Internet in schools
(PCs connected to Internet per 100 pupils)

25

20

15

10

5

0

EU average 4.0

DK

L

FIN

S

UK

A

IRL

B

F

NL

E

D

I

EL

P

Source: European Commission (Eurobarometer, May 2001)

is

to

Attention must
therefore
shift to better connections
and wider educational use.
Internet
not
alone
enough. Schools must be
equipped
allow
convenient and appropriate
use;
be
Internet must
effectively integrated into
curricula;
teachers
and,
must be
supported and
trained to use the new tools
efficiently. The key results
of a Commission report 21

on Internet usage in schools can be summarised as follows:

i.

ii.

On average, there are 12 pupils per off-line computer and 25 pupils per
computer connected to the Internet. Half of these computers are less than
three years old. However, there are considerable differences between Member
States.

Connectivity remains dominated by narrowband technologies: over two thirds
of school connections are ISDN and the others mostly dial-up via a regular
phone line. Broadband technologies are marginal, although ADSL and cable
modem are now more widely used in a few countries.

iii. Whilst computers are now used by a majority of teachers, only a minority of
them use the Internet for educational purposes. The main reasons given by
teachers who do not use the Internet are poor levels of equipment and
connectivity. Lack of familiarity does not seem to be a major problem. More

20

21

COM(2001) 172.
Commission staff working paper: “eEurope 2002 benchmarking – European youth into the digital age”
SEC(2001)1583 of 2 October 2001.

10

than half of Europe’s teachers have been trained in the use of computers and
teachers use a computer at home and
the Internet, around 90% of
approximately 70% have an Internet connection at home.

In conclusion, there is a small group of pioneer countries that are ahead in terms of
equipment, connectivity and usage. These Member States are benchmarks for the
Union and world-wide. There are a small number of Member States that are lagging
in almost all areas. In spite of this mixed picture, introducing Internet in education
remains a priority in all Member States and European teachers seem to be open and
well trained. Ultimately, all pupils should be digitally literate by the time they leave
school.

Working in the knowledge-based economy

More than half of EU workers use computers in their jobs, and this has grown by
about a fifth since last year. Three out of four white collar workers are computer
users. Digital skills are essential to the employability of workers in all sectors.
However, people are not receiving the necessary training and only about a third of
the EU workforce have ever had computer training for a job.

There are marked differences between the Member States in the proportion of their
labour force who have received computer training. However, in every Member
State, the proportion is far lower than the proportion using computers in their
work. The implication is that even those countries with high levels of training need
to expand the opportunities for the work force to obtain digital skills.

Training in digital technologies is necessary for all skill levels. Shortage of trained
staff at expert level is particularly important as it presents a barrier to expansion e-
business throughout the economy. Digital skills are the key to many of the new
industries and services that are most likely to lead the recovery of growth. The
impact of digital technologies on the type of skills required and the number of
workers in possession of those skills will continue to be substantial, both within the
sector itself and in the broad range of user sectors.

Analysis presented in the "Benchmarking Report following up the Strategies for Jobs
in the Information Society"22 underlines that information technologies help the vast
majority of users to work more productively and to better combine work and private
life. In particular, the report provided further evidence for the benefits of telework. In
December 2001, the report of the 'High Level Task Force on skills and mobility'
recommended that Member States should encourage public/private partnerships to
better monitor the demand for computers and e-business skills. These partnerships
shall also help to define and prioritise the skills to be matched notably against
industry requirements, to generate detailed skills profiles and related curricula and
training facilities, as well as to promote e-learning.

22

Commission Staff Working Document "Benchmarking Report following-up the 'Strategies for jobs in
the Information Society'", 7.2.2001, SEC (2001) 222; this and the other documents quoted in this
http://europa.eu.int/comm/employment_social/soc-
section
dial/info_soc/esdis/index.htm. As a follow-up to this working document, the Commission will deliver a
report on "Information Society jobs: quality for change" with the support of the ESDIS high level
group.

consulted

can

at:

be

11

The number of people currently teleworking remains small. In November 2001, less
than 2% of the work force were teleworking regularly and just over 3% teleworking
occasionally. However, nearly a quarter said they would be interested in teleworking
and this proportion was fairly constant across all Member States. Thus the highest
proportion interested was in Denmark with 28% and the lowest was the UK at 15%.
Denmark has by far the highest share of teleworkers at 17% of the workforce, a
figure three times the EU average and nearly 50% higher than the next Member
State.

Participation for all in the knowledge-based economy

The Lisbon strategy stressed the need for an inclusive knowledge-based economy

CHART 11

Computer Training and Work

80%

70%

60%

50%

40%

30%

20%

10%

0%

DK

S

FIN

NL

L

D

UK

A

IRL

F

I

B

E

EL

P

EU

% workers having computer training

% workers who use computers for work

Source: European Commission (Eurobarometer, November 2001)

and eEurope aims to realise an "Information Society for all". Differences persist
regarding access to the Internet and digital skills - between men and women,
employed and unemployed, high and low-incomes, highly educated and less
educated, old and young. The Commission is promoting its strategy on e-inclusion as
part the overall social inclusion strategy.23

One of the eEurope targets in this context was the establishment of Public Internet
Access Points (PIAPs) as a means to provide affordable Internet access. On the basis
of available information on the number of PIAPs in Member States it can be said that
their number is on the rise and that they are well accepted. Almost 6% of Internet
users also access the Internet from PIAPs. A recent Commission study showed that
the main motives for using a public facility to access the Internet are the absence of
an Internet connection at home or at work, better equipment and faster connection at
the PIAP and the low or zero costs of most PIAPs. Eurobarometer data also
underlined the particular benefits of PIAPs for disadvantaged people (e.g. 19% of
users have a low-income and 12% of them are unemployed). As a result, PIAPs
effectively serve the purpose of making the Internet more accessible and more
affordable.

23

Commission Staff Working Paper "e-Inclusion. The Information Society's potential for social inclusion
in Europe", 18.9.2001, COM (2001)1428 and Council Resolution of 8 October 2001 on "'e-Inclusion' -
exploiting the opportunities of the Information Society for social inclusion", OJ 2001/C292/02.

12

3.3.

Stimulate the use of the Internet

This section covers actions designed to increase Internet use: eCommerce, public
sector services and content, and online health services.

eCommerce growth slower than expected

CHART 12

eCommerce

% Internet users who have purchased online

60%

50%

40%

30%

20%

10%

0%

EU average 35.6%

UK D

S

L

IRL DK FIN A NL

F

B

I

E

EL

P

Source: Eurobarometer (December 2001)

Final demand from consumers for electronically
traded goods and services has grown only
slowly over the past year. In October 2000, 31%
of EU Internet users had purchased online and
this rose to 36% by November 2001. This
slightly underestimates growth in absolute
numbers, as the number of users increased by
nearly a quarter. However, only 4% of users
classified themselves as frequent purchasers and
this is a major problem for eCommerce.

There are variations between Member
States in the proportion of Internet users
who have purchased online. The pattern
broadly corresponds to that of Internet
penetration, higher proportions in northern
Europe, lower in the south. The relatively
higher online consumption of the UK and
Ireland may reflect the greater availability
of English language services online. UK
and Ireland may also benefit from greater
familiarity using credit cards. In Germany,

CHART 13

eCommerce
% companies selling online by sector

35%

30%

25%

20%

15%

10%

5%

0%

services

dist ribution manufacturing

construction

Source: European Commission (Eurobar omet er , November 2001)

CHART 14

eCommerce
% companies selling online by size

35%

30%

25%

20%

15%

10%

5%

0%

10-49 employees

50-249 employees

250+ employees

Source: European Commission (Eurobarometer, November 2001)

prices for delivery.

Another factor is trust, how confident
are consumers in being able to obtain
redress
in the event of an online
dispute24. Wider use of self-regulation
by means of codes of conduct and

greater experience of offline catalogue
shopping may raise the propensity for
online shopping.

There are also indications
that many
willing shoppers do not complete their
shopping due to high shipping/delivery
costs. Increasing competition in the postal
sector would certainly contribute to lower

CHART 15

eCommerce
% companies selling online

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

EU average 22.9%

UK D IRL A

NL DK S FIN L

B

F

I

E

EL P

Source: European Commission (Eurobarometer, November 2001)

24

The Commission is tackling this through an e-confidence strategy focused on promoting good business
practice (including a specific initiative to establish standards for on-line trading), backed up by
alternative dispute resolution and the ultimate safety-net of effective access to justice for consumers
through the formal legal system.

13

online dispute resolution could simplify procedures and also make cross-border
commerce easier. The Commission has tried to encourage their use in the
eCommerce Directive25, but as yet the proposals have not been taken up sufficiently
in the market. Lack of trust works against small firms as large companies benefit
from their brand image. This may be another explanatory factor behind the greater
online consumption of anglophone countries who are perhaps more easily targeted by
large US companies.

Interestingly, nobody forecast the enormous success of eCommerce based on direct
links between private buyers and sellers (peer-to-peer, P2P), which seems to appeal
to a large share of Internet users. Whether or not P2P can provide a useful business
model for B2B will be demonstrated in the months to come. eEurope will measure its
development.

CHART 16

As for the supply side of eCommerce, overall take-up by businesses is still relatively
slow. On average, around 20% of European
companies buy and sell over the Internet, with
Germany, Ireland and the UK spearheading the
sales part and Denmark and Finland strong on
the online purchasing side. Big companies are
buying and selling more online than small
companies and the services sector is clearly in
the lead as regards the use of the Internet to sell
or purchase goods and/or services.

eCommerce
% companies buying online

DK FIN IRL A

S UK B

10%

15%

20%

25%

30%

35%

40%

45%

0%

5%

NL

D

E

L

I

EU average 22.9%

Source: European Commission (Eurobarometer, November 2001)

EL F

P

In six Member States, more than 30% of all
enterprises purchase some or all of their supplies via the Internet, with Finland and
Denmark above 40%. At the other end of the scale, only 5% of Portuguese and 10%
of French enterprises use the Internet to purchase their supplies. The percentage of
companies selling online varies from more than 30% in the UK and Germany to less
than 10% in Spain, Greece and Portugal. The same level of disparity applies to the
use of electronic marketplaces26 where figures range from 3% of companies in
Portugal to 21% in Germany.

These results confirm both other benchmarking results and the conclusions drawn
from measuring Internet penetration and Internet access costs. In those countries with
a high level of Internet penetration and low Internet access costs, more companies
use the Internet to buy and sell online than in less advanced countries.

The fact that fewer companies sell than purchase online is probably because of the
higher costs of online selling. Buying only requires a connection and a credit card
whereas selling requires a website to be set-up and maintained with adequate
security27 and possibly logistics organisation..

25

26

27

Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal
aspects of information society services, in particular electronic commerce, in the Internal Market

Internet sites using software that allows multiple buyers and sellers to carry out simultaneously
commerce transactions over the Internet. These sites take a number of forms, such as catalogues,
auctions or exchanges. Some are set up by sellers, others by buyers and still others by third parties.
In this context, the Commission will launch in 2002 an "e-Business Market Watch Function" as part of
the Go Digital initiative, with the task of monitoring the state of e-Business in Europe using selected

14

Citizens online not inline

Putting government services online brings benefits to consumers and to governments.
For consumers, it greatly increases the utility of the Internet by providing them with
easier access to information and reducing the time spent on transactions with
government. Governments stand to benefit from reducing costs of service delivery.

Most Member States have adopted or are in the process of adopting eGovernment
strategies for the provision of online services for citizens and businesses28. The
eEurope target was to have all basic services available online by the end of 2002.
The Internal Market Council agreed to a definition of basic services covering 8
services to business and 12 to citizens. Progress in getting these services online was
monitored by a detailed survey29 that investigated 10,000 public service providers in
the EU.

The survey defined four levels of online service delivery ranging from simply
providing information to full electronic delivery and submission of forms including
authentication. The results are shown in chart in which the average level of online
availability for the 20 services is converted into a percentage.30 The key findings are:

i.

ii.

Services provided by a single administrative unit have higher levels of online
service delivery. For example, income tax is generally the responsibility of a
centralised treasury office. It can be put online with a single application
suitable for all tax payers and has the highest average score of any service.
Other centrally co-ordinated services that scored highly are job search, VAT,
corporate tax and customs declarations

Services provided by decentralised local agencies are less well developed. In
this case some service providers may have well developed online systems but
average performance was brought down by those not yet online.

iii. Complicated administrative procedures

important back office
reorganisation to transform complex transactions into simple procedures.
Chart 17measures the availability of services online i.e. the extent to which
the front office is online. It
therefore takes no account of back office
reorganisation which is where the major cost savings of online delivery are
realised.

require

On the demand side, government services are one of the main areas of information
sought by Internet users. Nearly a half of European Internet users have visited
government sites. However they mostly just obtain information or download forms.

28

29

30

indicators to measure its impact. In the context of Go Digital, the Commission also carries out a
benchmarking exercise on the adoption of e-business for SMEs.
Cf. http://europa.eu.int/information_society/eeurope/egovconf/index_en.htm for
information on the
eGovernment conference organised jointly by the Commission and the Belgian Presidency at which
ministers from 28 countries adopted a ministerial declaration.
The methodology of the study and the full report can be found at:
http://europa.eu.int/information_society/eeurope/news_library/index_en.htm
The percentages indicate the average level to which the 20 services are available based on a four stage
classification. Level 1 is information only; stage 2 is when forms can be downloaded and submitted
online; stage 3 full processing of forms including authentication and stage 4 secure online transactions.
These are translated into percentages and averaged across the 20 services. The chart measures the
availability of services online i.e. the extent to which the front office is online.

15

Less than 10% of users have submitted forms. Government services should be
made fully interactive as quickly as possible.

CHART 17

Web based services online
online availability of basic services

80%

70%

60%

50%

40%

30%

20%

10%

0%

IRL

FIN

S

DK

P

E

UK

F

A

D

EL

I

NL

B

L

Source: European Commission (study by Cap Gemini Ernst & Young)

In addition to electronic service provision, there is also the issue of governance
“Publishing council agendas over the Internet, electronic voting or e-mail addresses
for politicians will not by themselves stem falling voter turnout, […] or recreate
confidence in public institutions and decision-making structures”.31 eGovernment
can only be a tool to achieve more open, more participatory, more accountable, more
effective and more coherent governance (cf. ministerial declaration of
the
eGovernment conference in Brussels on 29-30 November 2001 which also states that
increasing attention should be given to the provision of pan-European eGovernment
services).

Health online

Health professionals use the Internet more and more as a means to communicate
with their patients. The results of two surveys show that considerable progress has
been made in Internet take-up by general practitioners. In June 2001, 60% of all
primary care providers were equipped with an Internet connection, compared to 48%
in May 2000. In the same period, communication with patients via e-mail has
become much more common: the percentage of general practitioners using the
Internet to communicate with patients rose from 12% to 34%.

Health-related information on the Internet is among the most frequently accessed
information on the Web. A recent US survey showed that teenagers and young adults
consult the Web for health-related information as much as they download music and
play games online, and more often than they shop online32. As with all other web
content,
the content of web sites providing medical and other health-related
information is not subject to any checks on the accuracy of the information provided.
A list of quality criteria for health-related web sites would therefore be useful to set
minimum standards for the operation of those sites. The Commission intends to
publish a Communication on this issue later this year.

31

32

Council of European Municipalities and Regions on eGovernance (28.11.01).
cf. "Generation Rx.com: How Young People Use the Internet for Health Information", a survey carried
out by the Kaiser Family Foundation in October 2001 (http://www.kff.org/content/2001/20011211a/).

16

 
4.

CONCLUSIONS

This report shows how the eeconomy is emerging in Europe33. It displays sharp
contrasts and a mixed picture as regards the arrival of the information society in EU
Member States. The main policy conclusions to be drawn from the benchmarking
exercise are the following:

i.

ii.

iii.

iv.

v.

vi.

It

There are indications that EU Internet penetration might settle below US
level.
therefore seems necessary to give more policy attention to
alternative platforms for Internet access, such as mobile communication
devices and digital TV.

eCommerce faces particular difficulties. It is growing, but much slower than
expected and seems to be mainly taken up by well-established companies.
An urgent review is required to identify obstacles to eCommerce take-up.
This benchmarking exercise can be the starting point for better monitoring
of the economic impact of the legal framework.

Broadband has started slowly and choice is mostly limited to two platforms.
The attempt of eEurope to widen the availability of platforms has not made
much progress.

Many Member States are too far behind leading EU Member States in
Internet penetration and use. More efforts are needed to close the gap.
Differences in Internet and broadband take-up reflect an EU North-South
divide. Structural funds and regional benchmarking are addressing this
dimension of the information society. To stimulate access to broadband
networks and to benefit from the economic potential of the eeconomy,
support to investment should continue to be given.

Member States have made substantial progress to give schools Internet
connections. However, efficient usage in schools is still at the beginning.
Member States need to upgrade Internet connection to broadband, increase
the number of Internet connected computers available to pupils, and place
greater emphasis on Internet use for educational purposes, in line with the
targets proposed in the Commission's report to the Spring European Council
in Barcelona.

Benchmarking results show the growing security concerns and support the
political decisions that have been taken. The Council resolution on the
creation of a cyber security task force should be rapidly implemented.

vii. More and more people use computers in their job, but many of them without
being formally trained. To reach the benefits of the Internet, training needs
to be expanded and workers be given the opportunity to acquire digital skills
which is also an important objective in the European employment strategy.

viii.

Socially disadvantaged people are still lagging behind in computer access
and training. Thus, promoting 'e-Inclusion' remains a priority for eEurope.
Accessibility to information and communication systems for people with
disabilities should be a particular concern with a view to the year of people

33

It confirms the conclusions of the recent Communication by the Commission on the impact of the e-
economy on European enterprises (COM (2001)711, November 2001).

17

ix.

x.

xi.

with disabilities in 2003.34

The ministerial declaration of the eGovernment conference, together with
the benchmarking survey should give political momentum to the
development of online public services and to the identification of the needs
for these services at pan-European level. This will have to be complemented
by a focus on back-office reorganisation,
the creation of electronic
marketplaces for public procurement and investment in new equipment in
administrations. The Commission considers to propose in 2002 a Directive
which will facilitate the objective of wider exploitation of public sector
information.

Internet uptake by doctors has made significant steps forward. Online
information on health issues is met with brisk demand. The establishment of
quality criteria for health related websites and the monitoring of their
implementation would contribute to confidence-building and increase health
web offerings.

Candidate countries will have become members of the EU by the year 2010,
target date of the Lisbon strategy. If the enlarged EU is to reach its Lisbon
the Candidate Countries need to be fully integrated into the
objective,
process35.

This benchmarking report is only a first step. Progress is not always measurable over
a short time. Measurements have to be carried out continuously to see the speed at
which development takes place. This report will therefore be a reference for future
assessments.

Benchmarking is a learning process. Statistical methodology and practical studies
were improved during the process and still need to improve further. A crucial
advantage of eEurope benchmarking over other measurements is the comparability
of results which follow a single methodology in all EU countries.

The focus should now shift to the policies behind the quantitative results. What are
the examples for best practices? Member States need to see and compare different
approaches and solutions. The thorough analysis of examples also requires the
willingness to learn from each other.

Benchmarking also needs to be put into the long-term perspective of the objectives
set in Lisbon for 2010. At the outset, eEurope was designed as a short term measure.
immediate impact was felt necessary. Benchmarking indicates that
A direct,
technology can move fast, that penetration of Internet can explode, but that societal
change takes more time. It requires organisational changes, a shift
in mindsets,
modernisation of regulation, different consumer behaviour, and political decisions.

When the eEurope initiative was launched, it was foreseen as an action to get Europe
online quickly. Overall it has been a success and contributed to many more people
and most companies now being connected. Benchmarking has highlighted new
problems in relation to usage: connections are too slow and broadband is needed to

34

35

With the support of an expert group, the Commission will present a report on e-Accessibility by the end
of 2002.
An action plan for the Candidate Countries, eEurope+, launched at the European Council in Stockolm,
will be benchmarked to monitor progress in the Phare Candidate Countries.

18

stimulate new services and help accelerate the growth of eCommerce; schools are
connected but the Internet is not yet part of the pedagogical process; government
online has far to go before full electronic transactions are possible. These findings
indicate that eEurope should be continued beyond 2002 and shift its focus more
towards effective usage and availability of the Internet, in line with the Spring
Report.

Whilst all this takes time, 2010 is just around the corner. The eEurope concept needs
such as awareness,
strengthening to encompass more demand-side issues,
confidence, security and public services in order to pave the way for the 2010
objective.

19