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The proportion of Australian businesses using information technology continues to increase. Computer use has grown steadily, from 49% of employing businesses in 1993-94 to 84% in 2000-01. Internet use has grown more rapidly, from 29% of employing businesses in 1997-98 to 69% in 2000-01. Over the same period, the proportion of businesses with web sites or home pages has more than tripled (from 6% to 22% of employing businesses).
Business use of the Internet
While the proportion of Australian businesses with access to the Internet continues to rise, the range of activities being undertaken via the Internet also increases.
At June 2000, one in every five businesses (20%) which accessed the Internet, only used it for email or to search for information. By June 2001, this had dropped to only 10% of businesses with Internet access. Between 2000 and 2001, large increases occurred in the proportion of businesses accessing the Internet to order goods and services (from 18% to 29% of businesses accessing the Internet) and banking and financial services (from 36% to 59%).
After email (92% of businesses with Internet access) and information searches (80%), the more common Internet activities by 30 June 2001 were those related to banking and financial services (59%), access to government services (57%) and purchasing-related activities (56%). Overall, 39% of businesses with Internet access used the Internet for selling-related activities. The most prevalent selling-related activity was advertising or promoting goods or services (26%), while the most prevalent purchasing-related activity was product searches (44%).
Business use of web sites
The great majority of businesses with web sites or home pages at June 2001 used their site to display information about the business (91%). An inquiry or contact facility and advertising of the products of the business (both 73%) were the next highest reported functions. While 14% of businesses with web sites offered on-line ordering, only 4% of businesses with web sites had shopping cart software and only 5% had an on-line payments facility. An estimated 5% of businesses with web sites offered secure access or secure transactions on those sites. The integration of web site technology with back-end systems, such as existing accounting and stock control software, occurred in only 3% of businesses with a web site or home page.
The significance of Internet commerce in Australia
The ABS defines Internet commerce as purchasing or selling via the Internet. More precisely, Internet commerce is either placing or receiving orders for goods and services via the Internet or web, with or without associated on-line payments.
At 30 June 2001, nearly one-quarter of all businesses (24%) had undertaken Internet commerce during the previous 12 months. These businesses were more than twice as likely to purchase via the Internet or web as they were to sell via the Internet or web (20% of all businesses compared with 9%).
The estimated value of income earned by businesses from the sale of goods and services ordered via the Internet in 2000-01 was $9.4b. This represented approximately 0.7% of the total income for that year in the industries surveyed. Readers should note that many businesses were only able to provide an estimate of their Internet income; therefore the estimated value of Internet income for all businesses should be used with caution.
Of the 61,000 businesses estimated to be receiving income from sales via the Internet in 2000-01, 32% generated less than 1% of their total income in this manner. A further 33% generated between 1% and 5% of their total income via the Internet, while 35% of businesses generated at least 5% of their total income via the Internet. Only 7% of these businesses generated 50% or more of their total income from sales via the Internet.
Barriers to greater use of information technology by businesses
While the level of use of computer and Internet technology appeared to be relatively high among Australian businesses by June 2001, one in six businesses did not use a computer and nearly one-third of all businesses did not have access to the Internet. Use of web sites was much lower, with over three out of every four businesses not having a web site or home page. It is clearly of interest to know why some businesses are not embracing information technology at even the most basic level.
The most commonly reported barrier to using information technology, whether a computer, the Internet or a web site, was the perception by the business that the technology was 'not suited to the nature of the business'. In each of the last three surveys, this has been the most common reason reported by businesses.
At June 2001, nearly 37% of the businesses not using a computer reported that computer use was not suited to the nature of the business, while 23% identified lack of skills or appropriate training as a barrier to computer use. For businesses without Internet access, the most frequent reason given was that Internet access did not suit the nature of the business (44%) followed by a lack of interest in having Internet access (18%). The most frequent reason given for not using a web site or home page within a business was also that it did not suit the nature of the business (48% of businesses without a web site/home page).
Benefits of Internet or web selling
The 2000-01 survey also asked businesses involved in Internet or web selling to report the effect on their business. Overall, 86% reported a benefit to the business. About two-thirds (63%) of businesses reported that the ability to sell goods or services via the Internet or web had increased trading outside their local area. Other important effects were increased trading outside normal business hours (61%) and increased efficiency of business procedures (57%). On the other hand, 68% of businesses reported either an increase or no change to business costs.