Online services in the EU: Both local and global, with the US as the dominant supplier

October 30, 2015

Online services in the EU are highly fragmented: Europeans surf mostly on US-based websites which account for about 54% of online activity, while activity on EU-based websites accounts for 42%, according to a new JRC report. Only 4% of the EU's online services activity takes place on websites from other parts of the world.

The findings have been published in the paper "International Trade in Online Services". Online services activity ranges from delivery of digital media or search engines' results to e-commerce and travel services. The analysis includes a total of 39 countries; the EU28, some other European states, the US and major emerging market economies. It combines paid and "free" online services in a single measure based on the number of page views on the websites of online service providers. According to the study, the internet is both local and global: a large number of highly diversified local online services websites attract relatively little traffic and a small number of truly global giant service providers account for the bulk of all activity.

The paper supports the European Commission's Digital Single Market aim, which is to bring down existing barriers and create an environment where businesses and society can fully benefit from digital services and tools.

Irrespective of their location, suppliers do not generally operate across all Member States - less than 1% of online suppliers actually deliver their services to all 28 Member States. In fact two-thirds of the suppliers active in the EU cover no more than four countries. Half of the online activity in the EU is linked to a few very large online service suppliers. The top 1% of EU-based providers only generate 5% of EU's online activity.

Demand for online services in larger countries is relatively more inward-focused compared to smaller countries - as predicted by (offline) international trade models. The US is the big exception: 32% of its domestic online service providers also operate abroad and this activity is nearly twice as big as domestic activity in the US. This confirms the position of the US as the dominant supplier of worldwide online services.

Online trade costs are much lower than those offline, as geographic distance plays a less important role. Somewhat surprisingly however, online consumers have a strong preference for home market providers - much more so than offline, though this preference varies. Once consumers decide to go outside their home markets, language becomes an important obstacle - cultural and linguistic borders reinforce consumer preferences for the home market. The paradox between declining market costs and increased home bias is a consequence of the decline in online information cost that offers consumers the possibility to explore the long tail of niche market products and services that are hard to find in local offline shops, in the online home market as well as on the global internet.
-end-
Related links:

International Trade in Online Services: https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/international-trade-online-services

European Commission Joint Research Centre

Related Internet Articles from Brightsurf:

Towards an unhackable quantum internet
Harvard and MIT researchers have found a way to correct for signal loss with a prototype quantum node that can catch, store and entangle bits of quantum information.

Swimming toward an 'internet of health'?
In recent years, the seemingly inevitable 'internet of things' has attracted considerable attention: the idea that in the future, everything in the physical world -- machines, objects, people -- will be connected to the internet.

Everything will connect to the internet someday, and this biobattery could help
In the future, small paper and plastic devices will be able to connect to the internet for a short duration, providing information on everything from healthcare to consumer products, before they are thrown away.

Your body is your internet -- and now it can't be hacked
Purdue University engineers have tightened security on the 'internet of body.' Now, the network you didn't know you had is only accessible by you and your devices, thanks to technology that keeps communication signals within the body itself.

What's next for smart homes: An 'Internet of Ears?'
A pair of electrical engineering and computer science professors in Cleveland, Ohio, have been experimenting with a new suite of smart-home sensors.

Child-proofing the Internet of Things
As many other current, and potentially future, devices can connect to the Internet researchers are keen to learn more about how so called IoT devices could affect the privacy and security of young people.

Quantum internet goes hybrid
ICFO researchers report the first demonstration of an elementary link of a hybrid quantum information network, using a cold atomic cloud and a doped crystal as quantum nodes as well as single telecom photons as information carriers.

Connecting up the quantum internet
Major leap for practical building blocks of a quantum internet: Published in Nature Physics, new research from an Australian team demonstrates how to dramatically improve the storage time of a telecom-compatible quantum memory, a vital component of a global quantum network.

Internet searches for suicide after '13 Reasons Why'
Internet searches about suicide were higher than expected after the release of the Netflix series '13 Reasons Why' about the suicide of a fictional teen that graphically shows the suicide in its finale, according to a new research letter published by JAMA Internal Medicine.

Weaponizing the internet for terrorism
Writing in the International Journal of Collaborative Intelligence, researchers from Nigeria suggest that botnets and cyber attacks could interfere with infrastructure, healthcare, transportation, and power supply to as devastating an effect as the detonation of explosives of the firing of guns.

Read More: Internet News and Internet Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.