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The Norwegian Government Policy for Electronic Commerce

Based on White Paper No. 41 1998-99 - Electronic Commerce

The Norwegian Government policy for Electronic Commerce

based on White Paper No. 41 1998-99 Electronic Commerce

Vision

Norway will continue to be at the forefront, while charting a conscious course with regard to the social aspects of IT development

1 Introduction

Surfing on the Internet is popular and the term "to surf" comes from the beaches of California and Hawaii, where agile board acrobats ride the big waves. This concept can be used as guiding reference in IT policy. The surfers cannot control the ocean waves but they still have ample margins of freedom to steer the board with style and elegance.

No nation or state can steer the development of technology as they please, but nations can play a role in laying down the framework conditions, reaping the benefits of targeted applications of technology, and eliminating or minimizing undesired effects.

The Norwegian Government is concerned with making the nation an active part of the global information society on Norwegian terms. Against this background, the Government has set up objectives and strategies for electronic commerce.

The Government wishes to convey that Norway has a well developed basis for advanced use of IT in general. Done appropriately, electronic commerce can develop rapidly, while at the same time democracy and equal opportunities, legal protection and consumer protection can be fostered. An appropriate approach in this area can provide a competitive advantage and bolster confidence and growth in electronic commerce.

Information technology will generate new products, new production processes and new forms of organization. Business competitiveness will depend on human skills, extensive adaptability and the will to use new technology. The development of technology, particularly IT, creates a new environment for business activity and influences all business segments. The impact of IT technology is expected to be particularly pervasive in the years ahead, both with regard to the effect on established businesses and the development of new products and business activity

A new feature is that sector-specific solutions are being replaced with open solutions and wider possibilities for cross-sectoral communication. The economic threshold for using communication solutions is now substantially lower. Developments are similar in many countries and advancing at a rapid pace.

2 The Norwegian government’s objectives

The Government will pursue an active and coherent policy for electronic commerce in order to strengthen the international competitiveness of Norwegian business and industry, increase the efficiency of society as a whole and create new business opportunities. The overriding objective of the Government is:

To bring Norway to the forefront of the development of electronic commerce, while reaping the attendant socio-economic benefits and building up a competitive new business sector. At the same time, emphasis shall be placed on fundamental values and social aspects, while adverse consequences shall be countered.

The Government will apply the following principles:

  • The development of electronic commerce shall be market-determined based on corporate and consumer demands for products and services.
  • Where the Government intervens, the process shall be fully transparent and undertaken in dialogue with the parties concerned.
  • Regulations shall be neutral in relation to technology and not restricted to specific technological solutions.

Electronic commerce is still at an early stage of development, but changes are expected to occur rapidly. In this situation, the Government considers it important for the parties to find their roles. Framework conditions laid down through regulations must be flexible and adapted to developments. The Government’s view is that a combination of government regulation and self-regulation by participants will contribute to establishing confidence in electronic commerce. The public sector shall promote electronic commerce with a view to increasing the efficiency of public procurement and will thereby be a prime mover behind its development.

In order to establish an appropriate regulatory regime, the Government emphasises an the international coordination of rules and guidelines. An area of key importance is the relationship between national regulations and international rules. It must also be established that the present legal principles applying to trade also apply to electronic commerce.

3 Main strategies

In order to achieve the main objective, the Government will work along five main strategies:

  1. The electronic marketplace shall be predictable
    Predictable legal and economic framework conditions must be established, which secure the national and international competitiveness of Norwegian enterprises.
  1. The threshold for using the electronic marketplace must be low
    An infrastructure and services must be developed with a view to facilitating use and access for all potential user groups in Norway.
  1. The electronic marketplace needs both buyers and sellers
    The number of users must be sufficiently high, and the public sector will contribute to this by using electronic commerce in procurement.
  1. Knowledge gives power and freedom of choice in the electronic marketplace
    Expertise and information must be reinforced in order to promote freedom of choice and counter adverse and undesired consequences.
  1. In the interest of confidence and credibility, consumer rights, protection of privacy and other rights must be safeguarded in the electronic marketplace
    Work will be undertaken to safeguard social consideration such as security, protection of privacy and consumers, including children and youths.

4 Challenges

The expansion of electronic commerce has been fuelled by the fall in prices for IT technology. This has prompted enterprises to make substantial investments.

All in all, electronic commerce can generate socio-economic benefits as a result of the considerable cost savings that can be achieved within an enterprise and in transactions between enterprises, even if transaction costs are not fully eliminated. Savings are reflected in the changes in corporate cost structure, market conditions and pricing strategies. To some extent this seems to have the effect of intensifying competition in the economy.

There seems to be three main reasons why electronic commerce is not used:

  • Enterprises have no strategies that give priority to the use of electronic commerce in the their business activity.
  • The current technical solutions in use are not fully competitive in relation to traditional trading.
  • Confidence in electronic commerce has been lacking, with regard to payment services and the protection of privacy and consumers.

An active policy is required to provide additional impetus to realise the positive effects of electronic commerce, increase the pace in an area that is important from a national perspective, and contribute to realising the benefits for the public sector and society as a whole.

For many actors the effects of the development of electronic commerce may prove to be dramatic. Electronic commerce may intensify competition and entail centralization. As electronic commerce is conducted on the Internet, other criteria than geographic may determine who the key operators will be and their location. But geography is not without significance, and we can already see a concentration of activity and businesses in certain countries, regions and cities.

Efforts must be made so that as many agents as possible are able to use electronic commerce. The threshold for being a supplier or user should be as low as possible, with accessibility throughout the country. In order to prevent new social and geographic disparities, developments must be monitored and the need for measures in response to market failure must be evaluated. The negative social effects of electronic commerce must be identified and addressed. Against this background, an offensive and coherent policy is necessary.