MEASURING THE FACTS AND EFFECTS OF E-COMMERCE

Michel Hébert
Head of Business Statistics Directorate, INSEE

The Director General of INSEE invited us to identify the themes relating to the new economy that deserved further
study. I should therefore like to suggest some possible paths to explore.

Two complementary talks particularly captured my attention: Alain Rallet’s on e-commerce and changing distribution
models, and Bill Pattinson’s on the international definition of e-commerce. The first speaker told us that the concept of
e-commerce was fairly blurred, while the second tried to refocus the discussion on the task of defining and quantifying
the activity.

You will recall that today’s seminar is entitled “E-commerce: facts and consequences.” I believe the facts and the
consequences should be treated differently. In studying the facts, we should follow many restrictions so that we can
define the facts and thus obtain consistent concepts amenable to analysis. By contrast, we will not be able to describe
and analyze the exclusive effects of e-commerce on business activity. We will always be led to examine the impact of
new technologies in the aggregate, rather than that of e-commerce alone.

Facts
We must aim for a precise definition of e-commerce in order to conduct identical measurements in all countries. This
will allow us to make international comparisons of satisfactory quality. The Canadian example shows that statisticians
can quantify e-commerce. The OECD’s work should be concluded quickly. All European Union countries should get
involved in these measurements, under the aegis of Eurostat.

We must also observe the behavior of enterprises, as well as the changes occurring in those that use e-commerce. Daniel
April and Patrice Roussel discussed corporate behavior in regard to e-commerce. Both demonstrated that we can
measure e-commerce penetration rates by industry. We can also measure the extent of relationships between industries.
Then, using microeconomic analysis, we can assess the effects within the firm, both on costs and on management
procedures. Lastly, we can observe the problems faced by companies when they use e-commerce, in particular the
reluctance of their employees.

Daniel April gave us a thorough presentation of consumer behavior. We can measure the rate of PC ownership among
households, the Internet utilization rate among PC-owning households, and the proportion of online orders.

Consequences
The difficulties we face in defining e-commerce with precision prevent us from having a clear view of its specific impact
on the economy. However, I believe we can observe the effects of the new technologies in general in four areas: the
corporate sector, prices, growth, and jobs.

The corporate sector

Structural statistics enable us to study the change in the number of businesses using the new technologies, in the size of
their workforce, and in the value added generated by the new technologies. We can also study the growth of logistics.
We can observed the increase or decrease in the number of commercial intermediaries, and even the changes in the
nature of their work.

Business demographics allows us to study the births and deaths of firms that use the new technologies, by offering
precise explanations of the phenomena observed.

Conclusions 143
Prices
The new economy will cut costs, but we do not know if these reductions will affect prices. That is why we must measure
price movements. I do not believe we should quantify this phenomenon by type of commerce. In all probability, the
price of the same kind of product, delivered in the same conditions by different types of merchant, will register identical
changes. On the other hand, Alain Borri has demonstrated that a product must be linked to its delivery method. For
example, a case of wine shipped in 48 hours is not the same product as the case delivered two weeks after ordering. We
must strive to define the price of complex products comprising the good itself and related services.

Growth
At present, the overall effect of the new technologies on economic growth is positive. Statisticians should let national
accountants estimate whether the longer-range impact on our economy will be positive or negative.

By contrast, I would suggest that Eurostat, the OECD, and our colleagues abroad draw inspiration from the stock
market. Market players created NASDAQ to track new-technology stocks exclusively. Likewise, we could set up a new
indicator, alongside the industrial production index, to measure the output of the new technologies. It would serve as an
indicator for services as well as goods. We would then need to conduct surveys to measure the production of a selected
group of business services. In France, we have already carried out a survey of non-certified telecommunications
operators, which we will be repeating in 2001. I think this approach should be extended so as to obtain a new-economy
production indicator.

The people who are currently in charge of the industrial production index may be able to identify, within the index, a
narrow field consisting of the production of new-economy goods. This will surely not meet all our expectations, but it
will provide a starting point.

Jobs
I think we will initially see job creations, particularly for computer specialists, logisticians, and delivery personnel.
While these jobs are created, others will be destroyed. We must therefore define job classifications suited to these
phenomena. Our ultimate aim is to determine whether the new economy will create more jobs than it will eliminate, or
vice versa.

This debate will probably be identical to the one we had on mass merchandising, to determine if it created more jobs in
hypermarkets and supermarkets than it destroyed in midtown districts. We need to analyze employment data in detail,
and assess the number of jobs gained and lost in each occupation. By comparing this information, we can determine
whether the new economy’s net job balance is positive or negative.

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In conclusion, even though we are witnessing an emerging phenomenon, we do not have time to squander in fruitless
discussions. The OECD and Eurostat, as well as national statistical agencies, must lose no time getting actively involved
in this work.

144 Insee Méthodes