Internet economy keeps pressure on e-gov

The Internet Economy Indicators

A new report showing the vigor of the Internet economy makes a strong case for government to continue its advances in conducting business electronically, according to an industry leader.

Furthermore, the figures could be a catalyst for the new administration to expand the use of technology tools, said Sue Bostrom, senior vice president of Cisco Systems Inc.'s Internet Business Solutions Group.

The U.S. Internet economy generated about $830 million in revenues in the first half of 2000, a 58 percent increase over the same period in 1999, according to a report released last week. The study also found that about 3.1 million U.S. workers were employed in Internet-related jobs, with 600,000 joining the Net workforce in the first half of 2000 alone.

The study (at www.internetindicators.com) was conducted by researchers at the University of Texas Center for Research in Electronic Commerce and commissioned by Cisco. It is the fourth such report issued since June 1999.

"The study shows the concept that traditional companies are embracing the Internet to do business, and even more, [government] agencies must change that way to provide value to their constituents," Bostrom said. "The demands on the government to do business electronically will increase, and that can be driven from inside" or pushed from the outside by the private sector.

She urged president-elect George W. Bush's transition team to seize the opportunity to "not just talk about technology, but to use it as a tool."

Bostrom said that Colorado, under the leadership of Gov. Bill Owens, has done an excellent job of embracing the Internet as a viable way of doing business; the state saved taxpayers more than $25 million last year through those efforts.

A co-author of the study, Anitesh Barua, said the trend of failing dot-com companies should lead to a decrease in Internet industry revenues in the second half of 2000. However, dot-coms make up less than 10 percent of the Internet economy. Overall, Barua still expects to see growth, "just at a smaller rate than in the first half."

The research team looked at financial data from about 2,000 companies. About 400 of the largest firms provided in-depth data and the remaining 1,600 were surveyed, Barua said. Looking ahead, he doubts too many future reports will be needed.

"One day, we will not have to do this study because the Internet economy and the overall economy will be the same," Barua said.