standards. This ambitious challenge absorbed the political and economic attention in Germany. 
But everyday challenges like improving e commerce readiness factors have gained more and 
more importance in the last few years. German firms have been able to catch up with leading 
countries like the US and Denmark over the last two years.  
As the largest economy in Europe and being highly export oriented, Germany plays an important 
role in the area of e commerce usage, due to its competitive and international business activities. 
In other words, German enterprises had already reached a most competitive level in terms of 
efficient and innovative production in the world even without e commerce.  
The most important e commerce enabler in the B2C sector is the generally highly educated and 
skilled population as a broad base of well informed Internet users and potential online customers. 
This will also help reduce workforce shortages in the ICT industry, as well as in industries 
deploying e commerce applications in the near future. Together with the relatively high income 
level of German wage earners, education and wealth are the most important e commerce 
enablers, both of which are realized in Germany. 
A natural advantage is the geographic location of Germany in the center of Europe, which allows 
it an excellent network infrastructure as well as short physical distances to all other European 
countries and markets. The assertion that in view of modern telecommunications physical 
distance is losing its importance appears to be true concerning digital goods. But physical 
distance is still of considerable importance for distributing physical products. The central 
position of Germany as a hub within Europe, together with the excellent public and private 
infrastructure, attracts foreign investment. For example, every important European business 
region is reachable in less than two flight hours and package deliveries inside Germany are 
delivered within one day or even faster. This means efficient connectivity to e commerce 
markets in Europe based on the German infrastructure. Another reason for MNCs to enter 
Germany is the prevailing and generally stable social peace and continuity in the cooperation 
between management and unions. 
The social interest and willingness to take an active part in developing  the e society  is 
increasing. Germany has not only entered the catch up phase compared to the first adopter 
innovation schema, but in many areas has already caught up and is now gaining a competitive 
advantage in Europe and in the world. The utility of the Internet in all aspects of life, in the 
office or at home, for work or fun, has, together with the maturity of services and products 
available online in Germany, convinced users and customers of the need to use the Internet.
The main drivers of e commerce use and diffusion in the B2B sector are the strong international 
competition and globalization of the export oriented German industry. The manifold 
international trade connections increase the speed of diffusion of standardized electronic 
transactions. This trend is not only observed within large firms but especially in the strong and 
innovation friendly German SMEs (Mittelstand), which are of high importance for ICT diffusion 
in Germany. Our survey data shows that the German economy is not only an important export 
oriented industry, but it is also highly interconnected with foreign branches or headquarters (see 
Table 1).
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