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Internet still big business in UK, says CBI

It's the second wave (we thought it was the third)

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A new report by the CBI and KPMG Consulting, released today, paints an optimistic picture of the future of Internet technology in businesses.

Of course, the dotcom, money-down-the-toilet frenzy has subsided but Digby Jones, director-general of the CBI, was keen to point out that business is still very much concerned with the benefits of e-business.

More than 10,000 companies were sent a survey by the CBI and just under 1,000 responded. The overall picture is that big business is taking it easy but is very aware of the advantages that Net technology can bring. The majority get very little money from e-business at the moment but just over half reckon at least 10 per cent of their revenue will come from e-business within three years.

The vast majority already have plans to incorporate Net technology into their systems, just under half have already seen it having a real effect and 99 per cent say e-business will be important in two to three years.

The survey split companies up into sectors and also into three groups which judged how far companies were pushing the Internet into existing business models. In total, one-fifth of companies were judged to be "e-pioneers", 43 per cent "e-followers" and the remaining 36 per cent "e-laggards".

Most proactive are Telecoms/Utilities companies and Retail. The North-East and Scotland also come out as the areas where companies are pushing harder and faster. Manufacturing industries and Yorkshire and South England come out as the laziest.

Both Jones and Alan Buckle (CEO of KPMG Consulting) were very keyed up about it all. And, dare we say it, a little smug that yet again big business and consultants have kept their heads while all about lost theirs. Now the dust's settled, we can learn from lessons and perhaps rewrite a bit of history.

The CBI did admit to failing itself. In terms of business advice regarding Net technology, people turn first to their peers, then to the "experts" - consultants, designers etc. etc and finally to business associations (incl. the CBI) and the government. This is not a good position for CBI to be in, but it takes it on the chin and expects the government too as well.

Digby Jones made a few comments toward the government and its rapidly slipping e-government dream. He called on it to regulate lightly until it could work out how the market was working (but then what would you expect from the DG of the CBI?), said that it must allow business to get involved with building infrastructures and warned that any government that hoped to stay in power over the next five years would have to get behind e-commerce and e-business, even lead the way. The government was going faster than a lot of industries but not fast enough.

Despite this, there was general agreement that the UK is not doing too bad at the moment - behind the States but certainly ahead of most European countries, including Germany. There is a risk that we could slip behind though.

And reiterating what the world+dog is saying, both the CBI and KPMG stressed the importance of a rapid roll-out of broadband. The demand is there and the need soon will be. The government, said Nigel Hickson of the CBI, is clearly aware of the problem. However, unlike everyone else, no direct blame was placed at the feet of BT. This probably has nothing to do with the fact that Sir Iain Vallance - BT's chairman and the man frequently blamed for BT constrictive behaviour - is president of the CBI.

There was also a brief chat about the fate of dotcoms. Digby was quite forceful in his belief that plenty of funding is still available for companies incorporating Net technology into their systems. There always has been (money) if it is used to increase shareholder value and improve efficiency of existing business, he told us. The market has sorted out the mad race for pure online companies.

Being head of the CBI must be a comforting job sometimes. ®

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