The Old Regime and the Digital Revolution
Rocca, Francis X.
I was walking from one bustling pavilion to another when I heard the excitement. "Who? Who?" came the cries. Everyone turned in the direction of the loudest chatter. We could see the backs of TV...
...And by providing more internal competition, a larger market is more likely to yield products and services that can dominate worldwide...
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...E-commerce could also increase dissatisfaction with value-added-tax (VAT) rates, which vary between 15 and z 5 percent among E.U...
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...thanks to e-commerce...
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...Local calls, and hence Interact connection time, should likewise get cheaper once the liberalization is complete...
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...it also needs a U.S.-scale single market...
...The American e-commerce indushy has largely set its own standards, including an expectation of easy returns and swift refunds, without the help of government...
...A light switch illuminates the display...
...In another respect, the European telecommunications system is actually more Internet-friendly than America's...
...Once American consumers can buy phones that operate on multiple standards, Cade argues, the European advantage will evaporate...
...Surfing the Web in Europe thus costs on average twice as much as in the U.S...
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...Delays in this area also make it harder to reform state pension plans, an increasingly critical problem in a continent with an aging population, where most political parties agree that some privatization is necessary...
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...At their so-called "dot-corn summit" in Lisbon early this spring, the leaders of the European Union declared % new strategic goal for the next decade: to become the most competitive and dynamic knowledge-based economy in the world...
...Europe's former state telephone monopolies are already being forced to compete on long-distance service, and rates have dropped steeply...
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...It device with similar locking, but much less emits short, high-pitched sophisticated and less shrieks (at the threshold of powerful units...
...Not only could it spawn millions of new jobs in high-tech and related industries...
...Another boon for the Web will be that competing ISPs can offer users the latest, highest-speed phone lines, an innovation on which the monopolies have dragged their feet...
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...Right now it takes an average oflz weeks and about $2,ooo in fees to set up 34 May 2000 " The American Spectator a company in the E.U., compared to one week and $500 in the United States...
...The U.S.'s edge on Europe cannot be explained solely with economic statistics and lists of regulations...
...U.S.-based online brokerages allow him to trade on the NYSE and the NASDAQ, taking part in the longest bull market in history...
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...The ideal of life-long employment which prevails in most European countries may be suited to an economy of manufacturing and public-sector jobs, but not to one of knowledge-based services...
...unless it wants to be completely dominated by it...
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...Yet an unfavorable business climate drives many Europeans overseas, especially to the U.S., in order to realize their ambitions...
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...To that end, they announced a series of measures by the E.U...
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...The British economics writer Charles Leadbeater (author of Living on Thin Air) offers an example from the pharmaceutical industry, in which Europe once held the lead...
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...It could even lead to the creation of a single high-risk stock market there la NASDAQ, which in the U.S...
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...As Marilyn Cade, AT&T's director of Interact and e-commerce policy and advocacy, puts it: 'qqae privatized and liberalized telecom is the basic building block of the Internet...
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...Shaken heads as many turned back to their business, while the Prime Minister of Italy walked by, smiling primly upon the scene for the benefit of the evening news...
...This has already happened with computer hardware, which costs basically the same throughout the E.U...
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...With a tradition of highly skilled scientists and engineers, a more ambitious generation of business leaders now coming of age, and a general population with a proven appetite for hightech gadgetry, Europe is in many ways fertile ground for Internet-related industries...
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...European life could become freer and materially richer as the Internet makes competition and variety more pervasive...
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...More money invested in more varied ways means larger and more sophisticated capital markets in Europe...
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...THE COST Of DOING OLD BUSINESS A single market for stocks and bonds is not all that Europe needs in order to foster high-tech businesses...
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...An especially ironic case, related by Leadbeater, involves the Swedish truck maker Scania, which last year experienced a mysterious shift in its business patterns: Sales in Stockholm dropped just as they started to rise in Gothenburg...
...Europe can stake a large claim to the Internet as a medium of communication and commerce, and thereby extend its influence around the world...
...Another of their Lisbon resolutions calls for the adoption, by the end of this year, of a "legal framework for electronic commerce," a framework whose most controversial section regards consumer protection...
...workers, its former minister of technology and education is currently campaigning against the immigration of Indian computer engineers with the slogan, Kinder statt Inder ("Children not Indians...
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...Derisive chuckles...
...That's a big part of the reason that mobile phone use is higher per capita in Sweden and Italy than in the U.S., where a patchwork of incompatible standards makes such convenience seem a distant dream...
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...On the other hand, Europeans could become rapidly more comfortable with investing in their own retirement as they become familiar with a growing range of options, all available online...
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...Only about zo percent of European households are now connected to the Internet, as compared to 50 percent of American families...
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...was supposed to produce a single European market, but as its leaders acknowledged at Lisbon, the aspiration is still far from a reality...
...What does threaten to stunt the growth of European e-commerce are the sometimes absurd national laws to which all Web merchants are potentially subject, and which competitors and others could use as instruments of harassment...
...Whether it also vindicates a certain kind of technological regulation is less clear...
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...Between 1995 and 1998, the U.S.'s gross domestic product grew more than 2z percent thanks to information technology, according to the Commerce Department...
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...A Europe more hospitable to the New Economy would be one in which it was easier to go into business...
...zar Nicholas II kept master jewele~ ~ ~k..,Carl Faberg6 busy producing go . r ~ ,6/, jeweled eggs, to be worn arotmd the necks of '.= the czarina and the princesses...
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...A site called OneSwoop.com, which lets Europeans comparison shop for automobiles, "will do more in creating a single market in car purchasing than any amount of legislation," Leadbeater observes...
...Given how fast technology is changing, though, the odds are high that it could be bypassed by innovation...
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...The Internet exposes the special deals and price-fixing that have fragmented the European market...
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...Unemployment is even higher in those countries now sharing a common currency, which has lost 19 percent of its value against the dollar in its first 15 months of existence...
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...As an everyday instance, I know a couple in northern Italy who recently found out that the powdered milk they were feeding their baby daughter sold in Germany for less than half what they were paying at their local shop...
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...National policies in many industries, pharmaceuticals prominent among them, prevent the free flow of goods at market prices among the 15 member countries...
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...The American Spectator _9 May 2 o o o 35 Almost as bright as the sun...
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...We could see the backs of TV cameramen, and some security guards with hands linked to keep back the crowd, but not the person they were protecting...
...One analyst of the Internet in Europe has told me that he foresees "the rise of a consumer militant" as a consequence of e-commerce...
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...Unlike Americans, who usually pay a fiat fee for unlimited local calls, Europeans get billed for all their calls by the minute...
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...and national governments to promote Internet access, e-commerce, and hightech entrepreneurship...
...The problem is that these services aren't really free, since they take a cut of the connection charges that the user pays to the phone company...
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...The American Spectator _9 May 2 o o o 31 Thanks to the uniform standard, European mobile phones can also send text messages...
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...Eighteen percent of Internet users in Germany, and 19 percent in Sweden, will be trading over the Web that year...
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...but to do so it must first change the ways it does business athome...
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...It could fulfill the promise of a single market, offering consumers more and better choices, and fostering more world-class enterprises...
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...sector, has almost 9 percent of its labor force out of work...
...But before the Old World can fully enjoy the benefits of the New Economy, its politicians and bureaucrats must do something revolutionary, by restraining their inveterate tendency to tax and regulate...
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...FRANCIS X. ROCCA is a writer living in Vicenza, Italy...
...Suspicion of the profit motive and resentment of quickly acquired wealth are powerful inhibitors of entrepreneurship...
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...Many of these "techies" are potential entrepreneurs themselves...
...Such a market would also give venture capital firms more incentive to back young and promising high-tech companies...
...The E.U., with a much less developed I.T...
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...ALL THE WAY TO THE BANK One industry in which the Internet will increase consumer demand, with vast consequences for other industries, is that of financial services...
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...By lowering telephone connection costs, liberalization will help raise Internet usage levels closer to American levels...
...It brings everything ble, and every little sound lO-times closer...
...You in the most extreme hot/cold temperature conditions...
...watch the late TV show without ciisttabmg your partner;, listen to the commentator when you watch the ball game or any ~ g event-and much more...
...There will be 12 million online brokerage accounts in Europe in 2003, predicts a study by Jupiter Communications...
...Merchants in turn will have to lower prices or justify them, by adding special services or explaining what makes their costs so high...
...He notes that in other industries, such as large household appliances, such harmonization is now occurring higher up the supply chain, at the so-called "business-to-business" level of e-commerce, but will soon trickle down to consumers...
...But binoculars, even today's streamlined ones, are cumbersome, heavy-and expensive...
...The increasingly fast and precise flow of information on the Internet inexorably leads to the harmonization of prices at their market levels...
...The Navigator" Watch is available in black metal execution (as per illustration, with linked black metal band) and silvertone (stainless steel execution, with linked silvertone metal band...
...It amtains a lage Ger- ~ ' / ~ V man-n~decenratic-ballcanridge...
...Although Germany has a shortage of I.T...
...It turned out that customers were comparing prices, posted on Scania's own corporate Website...
...The unit contains two sealed heavy-duty lead-acid batteries and can be recharged either through your household current or through the cigarette lighter socket of your car, RV or boat...
...must act before Europeans will feel confident shopping online...
...None of this can happen, though, as long as Europe's financial markets remain fragmented by government and industry regulations...
...Byrne has proposed an online dispute resolution system which could take care of most of the problems that direct dealings between merchant and customer cannot...
...lncrease your l~armg range tnd a lactor q lOx, and get~m~d,,FMs~eoramao,~with...
...Europe's younger managers tend to be educated at U.S...
...Catch the audio portion of your favorite TV show, wherever you are...
...95* M iaCe~t rats, roaches, bats, fleas, spiders other pests make life miserable at home or at the plant...
...High-tech companies in Europe can draw on a large population of scientists and engineers, products of an educational system generally stronger than America's...
...Fujiyama 2" Ceramic Pen...
...FIXED PRICES, MOBILE PHONES The most concrete resolution announced by the leaders at Lisbon, and the one that will most immediately affect European Internet development, was the deadline set for opening up the national telecommunications markets, which must be "fully integrated and liberalized" by the end of next year...
...The world's richest man is admittedly a hard act to top, especially before an audience of technophiles...
...Tued ing FM stereo reception...
...Episcope TM (the complete vest-pocket optical system) s t i l l onlythe $59"95*from ~ i ' ~ ' ~ <~ :f:~'~'~ 1"~ emove Ep/scope'" ~ : , r; l ~ fitted leather case and ' 4 : 3 " it's a 30-power microscope...
...Night Piercer IF" #1088F522d Does this Japanese model outperform famous European luxury pens...
...PowerVox V I I " (Hearing Mate) #1076F522a A spyglass in t h e g r e a t n a v a l t r a d i t i o n . . . Adm N e l s o n ' s Telescope TM (with table tripod) just $59 ~* W hen Horatio Nelson - ~ ~ fought the battle of Trafa]q~at...
...That's why the most famous online merchant, Amazon.com, is known for customer service bordering on the slavish...
...The Nelson's Telescope" should be scope comes with a your choice...
...Here are sorne of the other great featttres of this b~dhmugh peIsenal digital radio: _9 PLL Synthesized Tuning _9 Headphones Included _9 Built-In Speaker _9 25 Memory Presets: _9 Nice-Styled Aluminum Case 10AM, 10 FM, 5 TV _9 State-of-the-Art Design _9 FM Directional Antenna _9 AutomaticScannmg _9 Battefiesinduded Get "shirtpock~' AM/FM ~'piion as yon never had t~nre...
...It also must reform its tax laws, lowering capital gains rates to encourage investment, and treating stock options more favorably so that start-ups can attract skilled staffwithout paying high salaries...
...The European Commission (the E.U.'s executive branch) wants to let dissatisfied buyers sue online merchants in the courts--and according to the laws--of the plaintiff's nation, rather than the defendant's, as is usually the case...
...it's now being made by as any laboratory microscope, yet it zs one of Asia's finest lens makers, oNly 2" long...
...Business groups argue that a nightmarish labyrinth of liability will keep many companies, especially small and medium-sized enterprises, off the Web altogether...
...of listening to the world or to people...
...You'll get many belt-locped vinyl carrying case...
...Leadbeater estimates that there are lO,OOO skilled French graduates working in Silicon Valley...
...The onsgenuine LCD display shows time contin- Navigator" Watch...
...725 IHI nlcelw 2 FREE kwsllllI...
...he usecl a l~lesoape just like this ~o menitor the move- '~ m~s of ~e F~rdvSpan~ fleet (X~r manufaaurer has cm~K~ci a ~ faithful replica of this famous ~ ?; , ~ so...
...When yon ex~_d the four s~ons to full ~ ~ will be ~ .Theoptics 0fadmiral inches long and fooased to ~ Nelson's Telescope TM ty withneedle sharpmss...
...European labor markets are still far too rigid to accommodate volatile high-tech industries...
...Analysts are contemplating the kinds of m-commerce (as in "mobile") that might ensue: an online brokerage automatically alerting a client when his stocks go up or down, a restaurant pitching directly to potential diners when they stroll into the neighborhood...
...ASO01 I $1 o,ooo ~ $5,ooo ~ $1 ,ooo c~ $5oo I : , $250 L-J $100 ["1 $50 ~1 other I I I I Name: I I Add . . . . . I I City: | I State: I I Zip: I I ~=~ ~ate ~..oo,.~ I L . . . . . . . . . . . . . . . . . -I Larry Klayman Chairman & General Counsel Judicial WatchBecause no one is above the law, www.JudicialWatch.org 888-JW-ETHIC The E.U.'s leaders, on the other hand, are concerned about the consumer victims that the Internet might produce...
...men working 25 stories up at a construction site...
...VIRTUALLY A SINGLE MARKET If Europe is to replicate America's recent economic success, it doesn't just need the Internet...
...ships passing by They weigh less than 2 ounc~rdly in the harbor...
Vol. 33 • May 2000 • No. 4