The Internet: Europe crawls while America runs

[June 26th 1998]

Compared with the United States, Europe's dismal uptake of the Internet shows no sign of improving in the next three years. At the second annual Forrester Forum Europe at the Royal Lancaster Hotel in London yesterday, Forrester Research, Inc., presented comparative data highlighting the major gaps between Europe (defined here as the European Union plus European Economic Area countries) and the United States in terms of the Internet economy, now and in the future.

Speaking to an audience of several hundred senior executives from major European companies, Emily Nagle Green, managing director of Forrester Research B.V., said that Europe would see growth in on-line population from 4% to 13% by 2001. This compares poorly with the United States, where 40% of the population will be on-line within the same time frame. Forrester's previous estimates in the United States have proved accurate, and the same methods were used in drawing European conclusions.

Business trade will dominate Internet commerce in Europe, taking over 80% of a $64 billion market, compared with $206 billion in the United States. This $64 billion market represents 0.9% of European GDP, compared with 2.7% of the United States' GDP. This means that the Internet commerce market will still be three times more significant to the economy in the United States than in Europe.

Although the European countries have a larger collective population than the United States does, the absolute number of people logging on in Europe will be 53.2 million compared with 98 million in the United States by 2001. By then, for every person in the United States, there will be $2,101 traded over the Internet each year, compared with $1,217 in Europe.

The reasons Forrester gave for the dramatic difference between Europe and the United States are:

• Europe is late to the game.
• Europe has a slow-growing on-line constituency.
• Europeans are not ready to buy on-line.
• Europe gets no help from Internet appliances.
• Telecommunications costs are approximately five times higher in Europe.
• Labour costs are higher in Europe.

Links
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