The impact of e-business on the economy Essay

The Impact of E-business on the Economy


Electronic concern besides known as E-business is the behavior of concern on the cyberspace and other computing machine webs, non merely does it affect purchasing and merchandising of merchandises but besides client service and coaction with concern spouses. In recent old ages, e-business has developed quickly and the e-purchasing is going more popular over the universe.

Electronic concern ( e-business ) is a general construct covering any signifier of concern dealing or information exchange executed utilizing information and communicating engineerings ( Whiteley, 2000 ) . E-business may take topographic point between houses ( B2B ) , between houses and their clients ( B2C ) , or between houses and the authorities ( B2G ) . Harmonizing to Whiteley ( 2000 ) , e-business operations can be grouped into three classs ; Electronic classs, Electronic Data Interchange ( EDI ) and Internet concern.

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E-business has been recognized as an of import subscriber in the economic system of many states. In the emerging planetary economic system, e-business has progressively become a really of import and a necessary constituent of concern scheme and a strong accelerator for economic development.

This study will be analysising the impact of e-business on the economic system ( EU ) and the importance of e-business, saying the critical issues and challenges involved in e-business.

Impact of E-business on concern administrations

To measure the economic impact of e-business in an administration, I will concentrate on the of import sectors in the European brotherhood which are the Retail industry, Banking industry and the Travel and touristry industry.

Retail sector

Retailing is one of the most of import industry sector in the universe, with no exclusion of the EU. In 2004 the EU retail sector, the industry comprised of about 17 million houses that employed people in the EU27 ( e-business ticker 2007 )

In the retail sector, e-business has had great impact on the value concatenation. It has made a great difference in footings of shelf life of merchandises and stock rotary motion clip. It besides highlighted the relevancy of inter-business exchanges. In fact, retail merchants, beside their relationship with providers and consumers, have important impact on intercompany exchanges through CEDI ( Centre of distribution ) . In kernel, retail companies will desire to apologize and cut down costs of supply and direction of the supply concatenation, get downing with buying cost. They will besides desire to distinguish their ain offers from the rivals, working client relation direction techniques as to communicating, gross revenues and clients ‘ trueness ( e-business Watch 2000 ) .

The UK figures released by the Office of National Statistics in February 2009 showed that internet retail gross revenues, as a per centum of entire retail gross revenues, rose by 13.2 % ( mean hebdomadal value of ?167 million ) . These figures closely match figures released by the IMRG/Capgemini Gross saless Index which showed that the e-business retail market rose by 17 % in July compared to July 2008, this addition has been driven by the vesture, accoutrements and electrical goods on-line retail gross revenues.

Banking Industry

The debut of E-business ( ICT ) in the European banking system has had a important impact on Bankss runing system and their operations within physical subdivisions. The most of import signifier of e-business used by Bankss is the online banking which has aid cut down cost. E-business has enabled Bankss to redefine their boundaries and besides gained competitory advantage through it. Internet banking is today supported by advanced ICT solutions which enable most mundane banking services to be conducted on-line ( ) . Surveies besides shows productiveness growing rose in the EU from twelvemonth 2000 onwards, while mean on the job hours per employee has decreased later, this survey tells use e-business investing is mostly substituting labor peculiarly in retail banking.

Travel and touristry Industry

In the last few old ages travel form has changed in the EU. The travel sector in the EU is so big that even a little portion of it produces a major online market. Taking the cyberspace for illustration, it has had a really high impact on the air travel industry. It can supply a direct connexion between air hoses and clients without the demand to utilize travel agents or Computer Reservation Systems ( CRS ) , thereby taking to be nest eggs in the distribution of air tickets ( Law and Leug, 2000 ) the cyberspace has become really extended in the travel industries and its impact has been peculiarly important on the distribution channel for air travels and the usage of the Internet for seeking and buying air hose tickets has become common in travel markets. The debut of e-business to the air hose industry has enabled most travelers to short-circuit travel agents alltogether, with most agreeingthat the most current air market will switch form traditional travel agents to internet based agents like Recent surveies shows that houses that have reinforced their e-business scheme in the air hose industry has had an addition in gross revenues volume for air hoses ‘ web site. The cyberspace has contributed strongly to the growing of most budget air hoses taking easy jet as an illustration. Easy jet has ne’er used the travel agent web, they rely on the cyberspace because all their flights are booked on-line by clients. ( Journal of Air Transport Management

Volume 12, Issue 5, September 2006, Pages 253-260 )

Impact of E-Business on the economic system

Over the past decennaries e-business has helped and provided assorted methods in which purchasers and Sellerss can transact In the decennaries to come, working the full potency of developments could hold profound impacts in single sectors of the economic system every bit good as for macroeconomic public presentation and economic policies. At the aggregative degree, productiveness and economic growing could lift, at least for some clip, as a consequence of more efficient direction of supply and distribution, lower dealing costs, low barriers to entry and improved entree to information. In the business-to-business context, higher efficiency can be gained from B2B e-commerce and B2B exchanges via lower procurance cost and better supply concatenation direction. Many companies claim that seting their supply ironss online has led, or will take, to major cost nest eggs. Harmonizing to Goldman Sachs ( 2000 ) analyze these additions range from between 2 and 40 per centum of entire input cost depending on the industry which may later cut down the monetary value in the overall economic system.


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