While $US8 billion worth of business was transacted on the Internet in 1997, that figure will grow to $US333 billion by 2002, according to International Data Corp's eCommerce Forum here.
By 2002, Web-based transactions will account for about 1 per cent of the global economy, said Frank Gens, senior vice president of IDC.
"There will be a massive growth of business transacted on the Web, about a 40-fold increase over the next five years worldwide," Gens said, with a 50-fold increase expected in Europe during that time.
Increasing numbers of World Wide Web users are fuelling the growth. At the end of last year, there were more than 80 million users of the Web around the globe, but that figure will grow to 1 billion by 2008, said Roberto Masiero, president of IDC Europe.
"There will be faster growth in Europe," said Gens, noting that of the 329 million Internet users expected by 2002, some 80 million will be based in Europe. "The more users, the more spending on information technology there will be," he added, pointing out that while some $700 billion was spent globally on information technology last year, that will grow to $5 trillion by 2010.
While IT companies are expected to receive the most immediate benefit in the growth of electronic commerce, the growth of e-commerce will in turn radically change their businesses -- by causing changes in the devices used to access the Web, the average speed at which the Web is accessed and the software used to access the Web.
For example, fewer PCs will be sold in the future, but more Internet-access and information-appliance products will be sold, Gens said. Also, software that runs those devices may come from an unexpected vendor -- it's too early to say who will dominate that segment of the market, he noted.
"Forty-two percent of all Web access devices shipped in the US in 2001 will be non-PC, information appliances," Gens said, noting that the figure will rise from 1997's figure of only 4 per cent. In Europe, 25 per cent to 30 per cent of the IT devices bought will be information appliances -- rather than full-fledged PCs -- by 2001, he added.
While many have said a lack of available bandwidth will limit the growth of the Web and e-commerce, Gens predicted a great increase in Web-access bandwidth that in turn will let e-commerce grow.
"Plan to see a future where there is an easing of the bandwidth crisis," Gens said, predicting that nearly 20 per cent of all US households will have some form of high-speed access to the Web by 2002. Today, he noted, only 1 per cent of those households have high-speed access.
All this change will require new business practices, Gens concluded. "This is a very important time to take bold moves that will set you up for the long run," he said, explaining that companies may need to take a loss on new technologies in the short term in order to secure a leadership position in e-commerce for the long term.