3 - France: an alternative path to Internet-based e-commerce

Summary

Introduction

The French-specific path for e-commerce is shaped by the characteristics of the country's economy and innovation system. The French national system of innovation is led by large established firms that are not well adapted to the decentralized process of innovation at the heart of the Internet revolution. This has hindered the development of e-commerce as innovation has occurred only in industries where dominant firms were driven to go online in response to national and international competition. Also, the central government used to play a powerful role in the economy, and has more influence over technology adoption choices than in other countries.

As a result, technologies tend to be widely adopted only when supported by big companies, as in the case of EDI, or by government, as in the case of videotext. France was an early adopter of e-commerce in the 1980s in both the business-to-business and the business-to-consumer segments based on EDI and videotext (marketed as Minitel) technologies, respectively (Brousseau, 2001, 2003; Brousseau & Kraemer, 2003). As a result, when the Internet became available for commercial application in the mid-1990s, French consumers and firms did not perceive it to be advantageous compared with existing technologies, delaying adoption of Internet-based e-commerce.

The diffusion of Internet-based e-commerce was inhibited by the adoption of these earlier technologies and the switching costs associated with moving to Internet-based options. Also, the presence of efficient physical distribution channels limited the adoption of online shopping.