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<TITLE>SBA CLassroom: Library</TITLE>
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<li> <A HREF="about.htm">About the Classroom</A>
<li> What is eSmallBusiness? (see below)
<li> <a href="digitaldivide.html">The Digital Divide:</a> <I>A Journey without Distance</I>
<li> <A HREF="index.html">SBA Classroom Homepage</A>
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<table><tr><td><IMG SRC="images/arrow.gif" ALT="arrow" WIDTH="10" HEIGHT="18"></td><td><font face="arial" COLOR="800000"><B>eSmall Business</B></td><td><font face="arial" size="-1">(<A HREF="eSmallBusiness.pdf">Download</A> a PDF version of this document)</td></tr></table>
SBA is currently developing an <i>eCommerce</i> education and outreach strategy designed to help small businesses compete in the new digital economy.<p>
<B>WHAT IS eCOMMERCE?</B><br>
The term "electronic commerce" (<i>eCommerce</i>) has evolved from meaning electronic shopping to representing all aspects of business and market processes enabled by the Internet and other digital technologies.<P>
<i>eCommerce</i> embodies the total business process. It fundamentally changes the way firms do business. When engaged in <i>eCommerce</i>, an organization is applying today's technologies to streamline and enhance business interactions. Such technologies include the Internet, but also include hand-held digital appliances, interactive TVs, self-service kiosks, smart cards, and a whole host of emerging technologies. All of these customer-facing technologies are supported behind the scenes by integrated customer databases, call centers, streamlined work-flows and secure transactional systems.<P>
<B>THE NEW ECONOMY</B><br>
On-line interactions are driving the new economy. The Internet is not just a network of connected computers, but a vehicle for a new market economy --- one that is global, continuously operating and increasingly automating the process of buying, selling, and distributing. In the new digital economy, smaller firms will be tied together, not by ownership & bureaucracy, but by bandwidth data and communication links.<P>
Time, distance and organizational barriers between people are being eliminated, organizational structures are becoming flatter and <i>eCommerce</i> is altering economic value chains and creating new business models. The buzz words in the new economy are speed, connectivity and adaptability. <P>
<I><B>Key Factors Influencing Small Business</B></I>
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<li>Internet traffic doubles every 100 days and somewhere between 50-70 million people are on the Internet at any given point.(<A HREF="#footnotes">1</A>)
<li><i>eCommerce</i> between businesses is five times as much as consumer <i>eCommerce</i>, or about $43 billion last year. By 2003 business to business <i>eCommerce</i> will balloon to $1.3 trillion. That's ten times consumer <i>eCommerce</i>, constituting 9% of all U.S. business trade.(<A HREF="#footnotes">2</A>)
<li>About 65% of all small and medium size businesses use the Internet and about 41% have a web site.(<A HREF="#footnotes">3</A>) Of all businesses that use the Internet, it is estimated that one third use it to engage in on-line sales.(<A HREF="#footnotes">4</A>)
<li>As markets become more efficient because of greater connectivity, the size and organizational complexity of traditional businesses become uneconomic. Firms are becoming smaller.
<li>Web-scaled economies can generate near-infinite returns. Once an Internet-based initiative is operating, the marginal costs of serving additional users falls toward zero.
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<I><B>SMALL BUSINESS NEEDS &amp; OPPORTUNITIES</B></I><br>
Small firms can not afford to overlook or not take advantage of <i>eCommerce</i> opportunities. In just three years, the Internet has evolved from a playground for "nerds" into a vast communications and trading network where some 90 million people swap information or do deals around the world. <P>
<i>eCommerce</i> -- or ebusiness -- offers significant opportunities for firms to extend their reach and do business with a global audience. It also offers opportunities to strengthen business relationships with customers, partners, vendors and even the government. At the same time, small firms that do not adopt electronic techniques run the risk of losing market share and customers from missed opportunities. In particular, the prospect of small businesses losing their markets to large firms selling through the Internet is quickly becoming a real threat. In fact, small firms may have more to gain than large firms from the successful transformation to <i>eCommerce</i> and more to lose from failing to adapt quickly to this new medium. <P>
<I><B>Available Now</B></I>
<ul type="circle"><li><A HREF="courses.html">Review the robust content</A> in SBA's Small Business Classroom.</ul><p>
<I><B>Coming Soon</B></I>
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<li>On-Line <i>eCommerce</i> Courses
<li><i>eCommerce</i> Information and Search Tools
<li><i>eCommerce</i> Success Stories
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<td><FONT FACE="Arial" SIZE=-2><I><B>~FOOTNOTES~</B><br>
1-U.S. Commerce Department<br>
2-Forrester Research<br>
3-1998 Survey of Small and Mid-Sized Businesses conducted by Arthur Anderson's Enterprise Group.<br>
4-1999 CDB Research & Consulting Inc.<br>
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