Summary and conclusions
Current key issues in ICT are discussed in the introduction, the six statistical chapters and the Capita Selecta of this publication.
Introduction (chapter 1)
New technology can bring about major economic and social change. The classic example of this is the invention of the steam engine. The situation with ICT looks comparable, so in ‘The digital economy’ Statistics Netherlands seeks to quantify the role of ICT in the Dutch economy and society. In this publication we use a model that focuses on the demand and supply of ICT. In this model the ICT sector and ICT infrastructure play key roles. The chapters in this publication deal first with the relation between ICT and the economy, then with the ICT sector itself, and finally with the use of ICT in society.
ICT and the economy (chapter 2)
The Dutch economy saw a growth rate of 3 percent in 2006, which was the highest growth rate of the Dutch Gross Domestic Product (GDP) since 2000. During the first six months of 2007 the economy continued to grow, albeit at a more modest pace. The ICT sector was eager to benefit from the economic recovery which started in 2004, especially the ICT services sector. Domestic ICT investments rose to more than 13.5 billion euro in 2005. In 2006, Dutch ICT spending equalled 6.3 percent of GDP. The share of ICT services increased in the past decade at the expense of ICT goods – the same is true for household consumption.
The European ICT policy is mainly based on the ‘eEurope Action Plans’ of the European Commission. The current action plan focuses on ICT research and innovation, secure broadband communication and digital government services. Dutch government policy encourages ICT growth in the widest sense: the government policy is to take the Netherlands to the European top. The Netherlands is already at the top in the use of broadband.
The Dutch ICT agenda for 2006-2007 contains several new focal points: ‘ICT and health’, ‘e-skills’ and ‘effective market control’. Dutch government policy also looks at the ICT sector. This sector makes a major contribution to the total private sector spending on R&D, especially by the ICT industry. R&D spending receives so much attention because R&D may lead to innovations and patents. The Netherlands applies for relatively many patents and follows right behind Finland in this area.
About 4.6 thousand students graduated in informatics in 2005/’06; this is about 5 percent of the college and university graduates in the Netherlands. Computer service bureaus sent their employees to more courses in 2005 than the private sector average, and spent twice as much on the courses.
The international trade in ICT goods and services flourished in the past decade, there was a boom in Dutch imports and exports as well as employment for ICT professionals. There is increasing globalisation in all sectors of the economy. In the ICT sector assembling and technical production are often shifted to low wage countries; offshoring of ICT services is growing rapidly as well. Within Europe these activities are shifted to Eastern Europe; on a global scale they are shifted to India and China.
Telecom (chapter 3)
The biggest development in telecom is undoubtedly the convergence of services. Telephone, television and the internet services used to be handled by different providers, but now these services can be bought in a single package from a single provider, using a single network. More and more consumers opt for the all-in-one packages because they are cheap and easy to use.
The telecom contributed about 2.5 percent to Dutch GDP in 2006. The contribution made by fixed telephone services is smaller because many people now only use their mobile phones. Phoning through the internet is also gaining popularity.
The Netherlands belongs to the European top in internet use. Internet use is still increasing as is shown by the spectacular rise in internet exchanges, in turn strengthened by the fast rise of broadband. However, there are relatively few fibre optic cable networks.
Digital television is gaining popularity in the Netherlands: in December 2006 over 2 million households watched digital television. This is provided in many forms: terrestrial, satellite, cable and the internet. Digital radio is also becoming more popular, but not quite as popular as digital television.
ICT use by companies (chapter 4)
The Netherlands is not at the absolute top when it comes to private sector use of ICT. Companies in Denmark, Finland and Sweden made slightly more intensive use of ICT. Companies in the Netherlands are not the earliest of early adapters in adopting ICT applications. Several years ago Dutch companies made average use of broadband internet and online purchases and sales in comparison with other EU countries. In 2006 Dutch companies became above average for the first time in these domains. It is now common for Dutch companies to use broadband internet and to have a website. Therefore there is much support in the Netherlands for advanced and large scale ICT applications. The Dutch industry uses ICT for support and business processes with a focus on the production and distribution chains. The Dutch services sector focuses on marketing and on the client.
One in ten companies used open source software by December 2006, often major companies. The main reason seems to be the differences between companies in ICT skills. Between 6 and 7 percent of the companies used online invoicing. The increasing electronic data communication must be legally valid and reliable. In 2006 one in three companies used authentication in sending mail. Almost a third of the companies receiving orders through the internet used secure protocols. So the companies that used these security measures are not the majority.
Online purchases and sales by companies are increasing by the year. This is true for the number of companies using online facilities and for the volume of transactions. The turnover of e-commerce in 1999 was barely 3 percent of the total turnover by companies. In 2006 this had increased to almost 11 percent.
ICT use in the public sector (chapter 5)
The Dutch government uses ICT on a large scale in its services for the population, for the business community, and within the government itself. By December 2007 over two thirds of the government services were available online. Dutch e-government performs above the European average. There are differences between the different layers of government: municipalities, water boards and the police are less advanced in their online services to the population than the other parts of government. Provinces, municipalities and water boards performed below average in online services to businesses. The online municipal services turned out to be most advanced in the provinces South Holland and Overijssel, while municipalities in the provinces Limburg and Zeeland lagged behind.
The education sector mainly uses ICT to make education more attractive, to enrich the learning environment, and to stimulate independent learning. The Dutch education sector lags behind that of other developed nations in various areas of ICT, for instance the shortages in personal computers, internet and software.
The care sector is also not the most advanced in ICT investments, although there was a substantial increase in investments in recent years. ICT is increasingly used for strengthening the patient’s own responsibility. The focus is also on developing standards for exchanging and securing data.
In the Dutch care sector 55 percent of the people employed regularly used a computer for their work in 2006. Computers were used substantially more in health care than in social work. The same is true for the use of the internet.
ICT use by households and individuals (chapter 6)
In 2007 more than eight in ten households had internet access, three quarters through broadband. Mobile devices, such as wireless laptops, mobile phones, palmtops and gaming computer are increasingly used, especially by men. Internationally the Netherlands is a frontrunner in the availability of ICT in households. However, the Netherlands is somewhere in the European middle when it comes to ICT skills.
Communication is top of the list of activities by internet users. In 2007 over a quarter of the internet users – mainly young people – used the internet for this, e.g. through Skype or MSN Messenger. Listening to the radio or watching TV via internet is gaining in popularity. The intensity with which the internet is used is also increasing. More and more people are using search engines, look at government websites and do their shopping online; moreover they do so more frequently than in previous years.
In 2007 7.5 million people indicated that they had done some online shopping; their number has doubled in five years time. The frequency of online consumption is positively correlated with education level. In 2007 over half of all internet users indicated that they had looked at government websites. Dealing with the government, such as downloading forms and returning filled in documents – e.g. tax returns or looking for work at the job exchange CWI – increased in 2007.
Despite the growing intensity of internet use, many people do not pay enough attention to security, nor do they back-up files. One in five internet users in 2007 faced the negative impact of a computer virus.
Online shopping and the retail trade (Capita Selecta)
In 2007 the Netherlands Institute for Spatial Research studied the consequences of online shopping for consumers, retailers and mobility. It shows that shopkeepers downtown are hard hit by online shopping. Male online shoppers in particular changed their physical shopping behaviour due to online shopping. They have become more price conscious and there is more substitution than with female online shoppers. Online shopping also leads to extra, impulsive purchases and also to more mobility.
The use of ICT by companies (Capita Selecta)
Statistics Netherlands and the VU University of Amsterdam studied success in ICT investments. The focus was mainly on standardising ICT use and data exchange between various business functions. The use of ICT and standardisation of ICT are positively correlated with the productivity of the company according to the study.
ICT is currently mainly used in financial management. Major companies tend to use ICT more, and also to standardise more, but other aspects can change this pattern.
The effects on productivity of using broadband (Capita Selecta)
ICT can generate innovations and raise productivity in companies. The implementation of ICT tools usually costs little and yields a lot – also in terms of efficiency. It is not entirely clear if such effects can actually be measured for broadband. A study by Statistics Netherlands looks at this issue by linking several statistics. Its first results show that investments in ICT tools yield relatively more than other investments. Moreover applying new ICT technologies improves the efficiency of the use of other means of production.
Statistics through internet: exploration (Capita Selecta)
The increasing digitalisation leads to challenges and opportunities in compiling statistics. This is shown in a study commissioned by the Ministry of Economic Affairs carried out by Dialogic and the University of Utrecht. The preliminary conclusions confirm that the internet can be used as a data source. The question is if the data are fit as input for statistics. Answers are expected in the course of 2008.