business usage of Intranets. The overall telecommunications infrastructure is in third place, while
in the area of fax machines per 1,000 people (second place), and the availability of telephone
mainlines (first place), Germany is again one of the leading countries in the world. Nevertheless,
Germany only reached the tenth place on the overall network readiness index of the GIT report.
This may be due to the low ranking of e government readiness (ranked 32 of 82 investigated
countries), as well as insufficient IT education (place 48 of 82) in Germany (GITR 2003).
IMPACT OF THE INTERNET AND E COMMERCE
E commerce applications have become common tools to support and improve traditional, as well
as new, Internet based business processes. While pure Internet based e commerce start ups have
had to cope with extensive competition alongside established firms and brands while
experiencing declining markets, traditional firms have installed and improved new e commerce
solutions that were initially successfully developed by start ups. Based on EDI and ERP know
how acquired over the last few decades, German firms have been able to profit from
sophisticated e commerce applications. German businesses first decided to wait until e
commerce applications had proven themselves successful, but they then, consequently, invested
and implemented them in the last several years. A noticeable gauge for e commerce development
in Germany is the e commerce readiness indicator published by The Economist. Germany has
steadily improved its position over the last several years and ranks now in the eighth position.
Aside from innovative but small European countries, only the US (first place) and UK (third
place) are in front of Germany (Economist, 2002).
ABLE 24 Impact of Doing Business Online
Percent indicating impact is a
Internal processes more
41.2 37.5 44.2 32.2 22.8 33.8 41.8 33.9
Staff productivity increased
Sales area widened
Customer service improved
International sales increased
Procurement costs decreased
Inventory costs decreased
Coordination with suppliers
Responses were weighted based on the total number of establishments by employee size within the sector for each
Consists of weighted survey responses in 10 countries combined: United States, Mexico, Brazil, Germany, France,
Denmark, Singapore, Taiwan, China and Japan.
Source: CRITO Global E Commerce Survey, 2002
Therefore, the impact of the diffusion of the Internet and e commerce applications is now visible
on both macro economic industry and micro economic firm levels (Table 24). A large 41.8% of