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Italy
and the Internet
by Brendan J.
Williams
The Italian
Economy
Italy is the fourth largest economy in Europe and the seventh largest in the world.
Its status as one of the world's largest economic powers is relatively recent, however. The vast majority of Italy's economic development has occurred since the end of the Second World War. In the 55+ years since the end of WWII, Italy has moved from a primarily agrarian society to a modern post-industrial economy. This extremely rapid economic development has been unique amongst Western nations, and has had a decidedly strong impact on Italian culture and society.
Work in Italy today encompasses all of the different stages of modern economic development at the same time. Many Italians still earn their livings as small farmers and fishermen or as skilled artisans, selling what they create with their own two hands. Contemporaneously, at the other end of the spectrum, Italian design and engineering know-how is playing an important role in the creation of the international space station. If one were to chart technological development on a linear scale, one could accurately place Italy at both the beginning of the scale, the end of the scale, and at every point in between.
The schizophrenic nature of Italy's society and economy extends to its usage and development of web-based services and technology. According to data from the Smau Ict 2000 Observatory, the number of Italian web users at the end of 1999 was 8.2 million (14.3% of the total population), and growing rapidly (I Dati). As of October, 2000 about one out of every two Italian households owned a personal computer, according to Comufficio, an association of Italian office equipment distributors
(Osborne). And according to a study done by GartnerGroup, 97% of Italian businesses are connected to the internet, and 76% have their own website (Milano).
However, other research indicates that Italy is behind the US and the other European countries in web usage. This is illustrated by the number active web servers in these countries. According to a study produced by the Internet Software Consortium, in July 1999 there were
only 724,000 active web servers in Italy, whereas there were 32 million in the
US, 2.5 million in the UK, 2.1 million in Germany, and 1.3 million in France (La
Rete).
Impact of the Internet
E-commerce and Internet banking are not as popular in Italy as they are in other countries. Of the 8.5 million Italians who used the Internet in June, 2000, only 14.5% bought goods or services online (Barba and
Ferro). And only 3.5% of Italian bank clients use online banking services, as opposed to 12% of German bank clients and 25% of Swedish bank clients who use online banking services, according to a recent survey produced by KPMG Consulting, Inc. (Wason).
There are a number of different reasons why the Internet has not taken off as quickly in Italy as it has in other industrialized countries. Paolo Barba and Luigi Ferro of Il Mondo offered these reasons why they think that e-commerce has been slow to develop in Italy:
The Italian distributive structure, which largely consists of numerous small, specialized shops, is not suited well to e-commerce;
there are a relatively small number of PCs present in homes; there is a general fear of web-based interactions; and Italians have a historic diffidence towards commerce that is not face-to-face (Barba and
Ferro). They also mention that prices online are not as competitive as they are in more traditional venues, and that credit card usage in Italy is low (Barba and
Ferro).
Another important factor that is impeding the development of the Internet in Italy is that in Italy, as in most European countries, one is charged for local phone calls. According to Il Manifesto, Italy's Center-Left party convinced Telecom Italia, then the national telephone company, to create a special reduced rate for Internet connections from the home three years ago (La Tariffa). However, Telecom Italia discontinued this plan soon after its recent privatization.
Concerns about security have also discouraged web usage, especially
for Internet banking. Italy is actually at the forefront in this area, at least
from a legislative perspective. The Bassanini law, which was recently passed, states that:
"The acts, data, and documents signed by the public administration and by private consumers with telecommunications or internet-based methods, contracts made with these methods, as well as their storage and transmission, are valid and relevant to all of the effects of law"
(Barba).
This official recognition by the Italian government of the concerns posed by Internet transactions is an important first step towards increasing consumer confidence in e-commerce.
Opportunities
There are many other positive indications regarding the future of web usage in Italy. The cultural diffidence towards the Internet is subsiding, and it has now gained mainstream acceptance. Italian businesses are starting to realize that the Internet is a necessity. As Mario Guidi, the Director of Innovative Products and Channels for Banca Toscana neatly put it, "The Internet means global competition"
(Barba).
It is also possible that Italy could become one of the largest markets for Internet services if these services become more oriented towards cell phone users in the future. GartnerGroup points out in their study that while Italy, when compared to the sixteen European nations, the US, and Japan, has one of the lowest concentrations of computers, phone lines, and web servers,
it is second only to the Scandinavian countries regarding its concentration of cell phones (Milano).
The Internet probably offers the greatest advantages to Italy's small and medium-sized
companies, which have been the driving force behind Italy's economic development. Currently, these companies use the Internet primarily for business-to-business transactions. The Internet allows them the global access to consumers and producers that was previously available only to large companies. At the same time they will be able to retain the flexibility and efficiency that have allowed them to compete with larger companies. Francesco Bellotti, the president of the small business branch of Confindustria, an Italian business organization, describes the
opportunities presented to Italian small businesses by the Internet thusly: "We are expecting a tornado- we don't know when it will arrive, and for this reason we are working to be ready" (Ottantanove).
References
Barba, Paolo, and Ferro, Luigi. "Nel Rapporto con il Pubblico, ma Sopratutto Tra
Aziende, il Business via Internet Rivoluziona le Strategie Distributive." Il Mondo
21-July-2000.
Barba, Paolo. "Ora si che il Mercato e` Senza Frontiere."
Il Mondo 17-November-2000.
"I Dati." Il Sole 24 Ore
13-September-2000.
"Milano."
Adnkronos 16-May-2000.
Osborne, Jim. "UniCredito to Give Computer, Internet Access to 37,500 Staff."
Bloomberg Financial News 1-February-2001.
"Ottantanove Piccole Imprese su 100 Scommettono Tutto sul Commercio
Elettronico." Adnkronos 3-May-2000.
"La Rete in Cifre."
Il Sole 24 Ore 13-September-2000.
"La Tariffa Urbana a Tempo Strozza la Crescita di Internet in Italia."
Il Manifesto 17-September-2000.
Wason, Eleanor. "Italian Internet Banking Doubled in 2nd Half of 2000."
Bloomberg Financial News 28-March-2001.
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