Geography Reference
In-Depth Information
the reality of regional clusters in which agglomeration economies, including close
linkages to venture capitalists, figure prominently. As the largest single concen-
tration of internet-based firms in the world, the San Francisco-Silicon Valley
complex operates, ironically, very much through the circulation of tacit informa-
tion in narrowly defined social channels. Inevitably, the attractiveness of dot.com
companies attracted over-investment, leading to the dot com boom, with huge
bonuses, massages and company-sponsored yoga, and early retirement, as well as
overconfidence and carelessness. Given capitalism's propensity for cyclical
swings, the dot.com boom turned into the dot.com crash of 2001-2003, with
widespread layoffs and bankruptcies, exhibiting the Schumpeterian process of
creative destruction that inevitably brings the mighty to their knees.
4.7.2 Europe
With high levels of disposable incomes, widespread credit card use, and abundant
levels of technical skill among the populace, Europe is well positioned to take
advantage of electronic commerce (Waesche
2003
). The uneven popularity of e-
commerce, as exemplified by the varying levels of e-tailing among countries
(Table
4.2
), testifies to enduring national differences. However, while half of all
retailers in the European Union offer goods and services on-line, only 20 % of
e-commerce sales extended cross national borders (Weibold
2010
), reflecting the
numerous cultural and linguistic barriers that fragment the continent.
As early as the 1990s, Scandinavian countries were pioneers in applications
such as electronic data interchange (Damsgaard and Lyytinen
1998
). With almost
universal internet access, the region is well poised to take advantage of internet
commerce. Unlike many countries where e-commerce is predominantly the
domain of large firms, in Scandinavia the practice has become widespread among
smaller enterprises as well (Eriksson and Hultman
2005
; Eriksson et al.
2008
).
Scandinavian e-tailing takes a variety of forms. In Finland, for example, electronic
banking has become very popular, and is now used regularly by 40 % of bank
customers (Karjalouto
2002
; Parker and Parker
2008
). With aging populations,
Scandinavia has become adept at electronic health care including telemedicine
(Jung and Loria
2010
). The internet has also allowed for a steady expansion of
Scandinavian tele-work and telecommuting (Vilhelmson and Thulin
2001
).
British e-commerce is booming (Dodd
2010
). The internet is estimated to
generate 7.2 % of British GDP, among the highest rates in the world (Robinson
2010
). In 2011, on-line sales exceeded £50 billion, roughly 12 % of the total and
the highest ratio in Europe. More than simply electronics, which form the most
popular item bought and sold over the internet everywhere, British consumers also
purchased significant amounts of groceries, home and garden products, and
clothing on-line. The drivers of Britain's success in e-commerce center on
aggressive strategic support from senior management of several large national
retail firms (Doherty and Ellis-Chadwick
2009
).
