E-business: Economic strategies and effects of the industrial application of Internet technology

With a commission from the Federal Ministry for Economics and Labour, the Ifo Institute examined the importance that Internet technology has for enterprises that influence the factors of diffusion and what structural effects are to be expected by the dissemination of Internet applications. It was shown that the application goals are primarily the reduction of costs and process times. Large enterprises have user advantages due to grouping, standardisation and scale effects, but also small and mid-sized enterprises can gain from Internet applications if they deal with the technology in an active way and, where necessary, participate in co-operative solutions. On the other hand, the hope that a new service sector would arise from the diffusion of e-business has only been partly fulfilled.