Internet brings power to public

By SIR GIL SIMPSON*

Bob & Pete's global airline? Cousin Martha the international manufacturer? It sounds far-fetched, but the internet has almost limitless potential for empowering small and medium enterprises. To understand why, we first need to look at the reasons for the success of the giant companies that have dominated the world economy for the past few decades.

The strength of large, international businesses is centred around integrated information systems. They have the ability to communicate, coordinate production, maintain stock levels, coordinate customer orders and so on. An airline can receive bookings from anywhere it has an office or an agent; a multinational manufacturer can match production in three countries with demand from three other countries. It is made possible by the fact that the firms have information systems in each location that can communicate with each other.

This information, or data, travels through a network of telephone lines around the world. Computer systems connected by global data communications networks have been crucial to the global spread of large companies throughout the 70s, 80s and 90s. These networks are private and expensive - impossible for any but a big organisation to afford.

The internet is what I call the people's global data communication network. It offers a way for computer systems to communicate at a commodity price, one that small and medium enterprises and individuals can afford. Just as the private global data communications networks of the large multinationals have given them immense power, the internet will deliver huge benefits for smaller enterprises.

It means that customers can connect to the information systems of a smaller enterprise from anywhere in the world. They can view product information, place orders, make payments. We are seeing the power of this in all manner of enterprises selling goods and services over the internet.

Perhaps more significant for smaller enterprises is the ability of their computer systems to talk to the computer systems of other smaller enterprises over this low-priced data communication network. This means they can integrate their systems and act like virtual big businesses. The internet has the potential to replace many multinational corporations with groupings of smaller enterprises.

This revolution has not happened yet, and the only thing that is certain is that it is going to happen. What it means is change for all of us, much of it unknown - which is why the E-commerce Summit is a useful event at this point in time. It gives us the opportunity to get into the best possible position to make the right decisions when the revolution comes, to lift our horizons and see the opportunities the internet is going to bring to our land of small and medium companies.

* Sir Gil Simpson is chief executive of Aoraki Corporation and chairman of today's E-commerce Summit.

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