E-Commerce A Minnesota Conference

December 1997

In April of 1994 about 1000 web sites existed. In November of the same year, an astonishing 10,000 had evolved from the cybersurf. Since then the Internet world has been in shock at the exponential growth of the World Wide Web. A year after the 10,000 web site mark of November 1994, when the number reached six figures, the commercial world became excited about it's profit potential.

Putting the revolutionary World Wide Web concept to good use required climbing a steep learning curve. Now, only three years later, we are starting to read comments such as, "No longer a novelty, the Web is now being put to very good use." — Tracy Kerievsky, November 21, 1997, PC Magazine Online, as the magazine makes its 100 best web site choices. It puts them in five categories: commerce, computing, entertainment, news/views, and reference. In fact, every other web site out there has a page of links to its own "other favorite sites".

But the real value of the World Wide Web is still not just web sites. Web sites are a tool. During the past year, the term E-commerce emerged. Its precise definition is still up for grabs. Simply, the E stands for Electronic, and implies conducting commerce on the Internet. Commerce encompasses the entire world of business — transactions trading, marketing, dealings, exchange, interchange, etc. — only it all takes place through digital communications.

In an effort to define what E-commerce means and to capitalize on its use, the Carlson School of Management conducted the Second Annual University of Minnesota, Conference on Electronic Commerce on November 10 and 11, 1997, at the DoubleTree Hotel in Bloomington, Minnesota. "Promises, Promises. . . " ,the conference theme, was split out into three tracks:

"Making the Promise" — chaired by Daniel B. Wackman, Professor, School of Journalism and Mass Communication, and Craig Evans, Vice president and Director of Interactive Marketing, Periscope Marketing Communications.

"Accepting the Promise" — chaired by Robert Hansen, Associate Professor, Marketing Management,, Carlson School of Management.

"Keeping the Promise" — chaired by Les Wanninger (also conference chair), Faculty, Information and Decision Sciences, Carlson School of Management, Director, Information Industry Initiative.

The scope of the "Promises" theme was difficult to relate to E-commerce. It lost meaning as each description broke into over-analytical, higher-educational-eze. More appropriate were the practical examples brought by real world presenters actually engaged in E-commerce.

Conference Chair, Les Wanninger, pointed out this was a non-technical conference, and the most technical comment that showed up was a reference to using a right mouse click. Most of the sessions' contents were about marketing on the web: success or failure of web sites; neat ideas; what surveys reveal; growth stages; retail web sites; educating managers.

Microsoft's Doug Henrich, General Manager of "Twin Cities Sidewalk," was there hawking the everything-you-ever-wanted-or-needed-in-one-place web site. MS has spent millions on the concept, but have yet to break even. Thirteen full-time people work locally updating the site.

One keynote session was a live, interactive, video conference delivered via digital satellite. How appropriate, since video conferencing is a piece of the overall E-commerce picture. Bill Gurley, Partner - Hummer Winblad Venture Parnters, spoke and answered questions live from the audience. His topic was "Internet IPOs: The Investor's View of amazon.com." After commenting on Internet companies as worthwhile investment opportunities, the audience also learned that the much-lauded amazon.com has yet to show a profit.

Bernadette Tracy, president of NetSmart, presented the results of an in-depth survey regarding how women use the Net — "What Makes Women Click?" Her premise was "If you would like to see the future . . . look no further than what women online are telling us they do and plan to do in the future."

According to Netsmart, women control 70% of retail spending, pay 75% of monthly bills, and account for 80% of catalog sales. From 1995 to 1997, online female users increased from 25% to 43%, with a predicted 60% for 2005. Although they may not purchase so much online yet, this is where they do consumer research and make decisions. Females, with their multi-faceted lifestyles (Ms. Biz, Dr. Mom), consider the Internet as a time-saving household appliance.

The answer to "What makes women click?" is simple: relationships. The key to successful websites is six steps in building relationships: initiate, nurture, sustain, invigorate, deepen, and extend/enhance the relationship. After elaborating on the six steps, Tracy's conclusion was, "Psychology must drive Technology."

The future of E-commerce is more than retail, although it gets the most attention. This was discussed in the two-part session, "Business-to-Business E-Commerce: Global Success Factors", part I — U.S.; part II — Europe and International. This session was presented by three enthusiastic E-Commerce pioneers: Dr. Joze Gricar, Professor - university of Maribor, Slovenia (formerly a part of Yugoslavia); Robert Gaffney, Manager - electronic commerce, General Mills, Inc.; and Peter Jacobs, Manager - EDI and Electronic Commerce, 3M Company.

Before the Internet, the best efforts to do business electronically was done with EDI (Electronic Data Interchange.) EDI systems were exclusive, proprietary, and costly. Companies wishing to purchase, sell, or transact electronically had to create their own technical communications structure between themselves and their vendors and financial institutions. Huge startup costs, monthly maintenance and service fees limited usage to only large players. Automobile manufacturers, grain dealers, large manufacturers, found (and still do find) EDI expedient and cost-worthy. But EDI left small vendors and distributors out of the picture.

The Internet has now brought Electronic Commerce to everyone. Any size company can participate with very little cost and large corporations can do business with the smaller ones electronically. EDI will not disappear immediately. In most companies using EDI it is well-soldered into place and functions reliably and efficiently, but new or additional E-commerce channels will be Internet-based. Current commerce demands the efficiency of the Internet for business processes and information flow. One of the biggest obstacles is individual capacity to absorb rapid change, but this obstacle does not retard or stifle the worldwide picture. Global E-commerce is vaulting ahead, stumbling over the participants, not the laggards.

Several essential E-commerce topics were obviously missing at this conference: security, transactions, digital/electronic money, Internet legislation, taxation, digital signatures as legal signatures, some of which are at the core of commerce, electronic or otherwise. All these topics can be deeply technical, and this conference, as announced, was non-technical. However, non-technical E-commerce team members must be involved in core issues when developing Internet strategies.

Overall, the conference was well done, efficiently managed, and ran strictly on time. The 200 registrants, a mixture of knowledge and naivete regarding electronic commerce, all walked away with greater understanding of the wide scope of EC.

Minnesotans may be more familiar with Finland and the Finnish culture than other parts of the US or the world, since northern Minnesota hosts communities of the descendents of Finnish immigrants. However, Finns have a perceived reputation of being quiet and reserved. It is time that their technological expertise gets more recognition. For instance, the following is an excerpt from a recent Reuters news blip: Finns Use Mobiles To Pay For Coke, Juke-box HELSINKI (Reuters) - Technology-crazed Finns can now play their favorite tune on a juke-box or buy a bottle of coke from a vending machine using mobile phones instead of coins. Telecom Finland, launching the service on Wednesday, said one of Helsinki's restaurants had already fitted a juke-box with a digital device which directly debited callers' telephone accounts when they selected a tune. Similar devices have been installed in two Coca-Cola vending machines, the telephone company said. Finland has the world's highest penetration of mobile phones at more than 40 per 100 inhabitants. It is home to Nokia, one of leading producers of cellular phones worldwide. This is typical of Finnish technology. Ever heard of Nokia? Did you realize it is a Finnish company? Check out the Nokia 9000 Internet phone; version two is out in Finland. You saw the character, Simon Templar, use it in the recent movie, The Saint. That was real technology, not 007-type foo-foo.

Marko Filenius is leading the Electronic Commerce Research Center at the University of Jyväskylä, Finland. Electronic Commerce Research Center is the leading Finnish research institute in the area of electronic commerce. He reached his Master's degree in economics at the department of Computer Science and Information Systems. Mr. Filenius has been establishing Electronic Commerce Finland, the association for electronic commerce in Finland. In his research he has focused in the diffusion of electronic markets and the organization of electronic commerce services. Currently Mr. Filenius is the chairman for Electronic Commerce Finland and is actively contributing to the development of cooperation between universities and industry.

iBiz: What do you see happening in the area of digital money? Are we working toward a worldwide money system?

Filenius: We have this ecash, if you know that. It's by DigiCash, the Dutch company. That's a form of digital money. Actually the technology works very well. We have been using for some purposes. It's just that user interface has not been developed enough, so it's not a product for the normal consumer. It's too difficult to use. That's a problem for many of these systems. Computer freaks have made if for some other [freaks], and they do not really think about the normal people.

In Finland, our banking system is very developed, very advanced compared to yours. I've done all my banking online for the last 18 months. I can pay my bills; I can check my account balances, my loans — what is the balance; when is the next payment due, and so on. We have two major banks that are offering this to their customers and it covers about 70% of all the things. They are also offering a service that if you are at the mall, for example, and you choose to buy something, and just click at the bank service and it provides the information of your purchase to the bank, and so you are able to pay it online immediately. And the seller gets the information that you have paid for that and they are able to deliver it. So we have all the components for consumer commerce, as well.

iBiz: Do you have to be at your own PC to do this?

Filenius: No.

iBiz: You can be anywhere?

Filenius: Ya. You have a user ID and a user password and then there's a session key that changes every session, so you just have the session keys with you or if you remember those other IDs, then you can use it anywhere. In other words, I could use it here if I wanted.

You asked about the money. A lot of people are waiting for some universal, global payment system, and I think that it will never come, and why would it? Because at the moment, we have several parent systems for global commerce. Why would there suddenly be just one?

iBiz: Are you thinking of the SET protocals?

Filenius: Well, ya, at some time that will be quite important for communications, but you still have to download a wallet, a kind of purse, to your computer, and it is too difficult for the normal consumer.

iBiz: So you are limited to being at that one computer?

Filenius: Ya, and that's another problem. The way I see the future is that some day we'll have browsers with a built in way of once you take one into use, you just put your credit card number over there, and it has all the technology that you can think of is just built into the browser, so you don't have to really care about that.

At the moment there are several payment systems, but nobody uses them. There are new ones, new ones all the time, so some sort of market acceptance is not there yet.

iBiz: In this country we have a few banks that exist only on the Internet. They don't have any walk-in facilities. Do you have Internet-only banks?

Filenius: Ya, I don't think so. There won't be room for too many more banks any more in Finland. Like there are some European ones that have come now, and they are competing with these.

iBiz: I recently tried to establish an account at a new Internet bank in New Zealand, but they refused — said I must be a citizen. Do you think that I could establish an account at a Finnish bank, or do I have to be a citizen?

Filenius: I don't know. It could be possible.

iBiz: The US has rushed to make laws regarding export of encryption software. You said that you weren't concerned with security. Please comment more.

Filenius: I think there is just too much hassle with this security thing, anyway. The one problem has been because of the U.S. laws about encryption. You're not able to export the long keys, only 54 bits at the moment. That's a big, big problem for the worldwide commerce. Like there would be technology that would be used wtih 1024 bit keys. They are very secure, and nobody can break them, and we need them. Of course, just as in normal life, anything that is built by a human being can be broken by another human being. It is so much more insecure using [the Internet] than in normal life. In normal life you have to be scared that someone is going to steal your car or rob you or whatever, and with the Internet it is the same except it is just all wires and cables. For example with credit card numbers — you are very confident to give the credit card to your waitress who goes around the corner with it. It's much more difficult to collect this number from the Internet, because there are so many messages coming around. So it's just a mindset, and it will change after time. Just at the moment people are too scared about that.

iBiz: Right now in Finland, is E-Commerce a long-term investment, or is there immediate payback?

Filenius: I would say it is more or less a long-term investment. Right now most of the companies are learning and trying different things over there and trying to find their own role. Only the companies who get some value are the companies who are providing the service of coding the HTML and building up their services are the ones who are making money at the moment.

iBiz: Here there has been a shift from techie people at the onset to graphic design firms, advertising firms, and marketing firms. Who is building websites over there?

Filenius: A lot of very small companies, like only one to four or five people. And these people build just normal websites. They don't really have a lot of functionalities. If you want functionalities that integrate into your business, then there are several bigger ones, say 10 to 20 people. And then we have the big ones, like one of the companies is ICL. It started in the UK. They have 150 people in their Web department right now. They are doing a great job and really making money. One company I know of is into database cataloging and using Oracle. From my point of view, one of the main problems is that the companies are too small. There are some brilliant people working in the small companies, but they don't have the resources to take over any big assignment, and somehow there is some sort of jealousy between them, and they are not really able to work together. So the only way it will happen is if the big company will buy the smaller one and uses their resources and this is happening right now. Some advertising agencies have thought it to be their ????????, but I don't see them as being the right ones. They should be a part of it, but they shouldn't be the ones really doing it. Another problem with the small companies is that they are usually very technical people. They understand the technology, but they don't know a thing about marketing or integrating into the business. They haven't any idea what an assignment might require beyond the technology.

iBiz: One of the presenters at the conference said that you have to have a team of many different elements and try to get them to work together.

Filenius: That is the strategy that ICL has. They advertise, come to us and tell us what you can do, and we will find a place for you. So they have a priest over there; they have a musician in an IT company in designing these web sites. It is a challenge to manage a team of such diversity.

iBiz: You mentioned that you have two major telephone companies?

Filenius: Ya, another one is coming on, too — a Swedish company is trying to get a 20Filenius: market share. That's their goal for the next year. Most of Europe still has monopolies. We have had liberalization for about the past ten years.

iBiz: What kind of Internet connections are available in Finland? Like here ISDN and T-1 are becoming very common.

Filenius: Yes, ISDN, and T-1s in larger companies. Now there is an initiative by the government to connect all the schools in the whole country even in the most remote areas, and they will do that by the end of '99 already.

iBiz: This is using fiber optics?

Filenius: Yes. I also think it will be very soon that we will be using mobile connections to the Internet. Because we have Nokia over there and they are planning satellite services. I see that coming pretty soon, actually.

I am involved in a software project right now including about 50 companies.

iBiz: What kind of software are they working on?

Filenius: One thing that you might know about is this F-prod and the security software. Another is a Web database. And that has been very successful. There are a number of small companies providing pieces to the whole project.

iBiz: What does the database do?

Filenius: There are several database products. One is a database so small that you can use it on these mobile phones, like the Nokia 9000. The other ones are like a large database that you would use for an online store, very advanced for online databases.

iBiz: Are there some web sites from Finland that you could recommend looking at?

Filenius: Ya. You might want to look at www.travel.fi, www.icl.fi, and www.aiesec.org.

iBiz: Do you work at the university exclusively?

Filenius: It's kind a separate unit from the university. We are under the jurisdiction of the department of Computer Sciences and Information Systems. We are a research unit that has to earn its own living. We don't get any budget money from the university or from the government, so we are independent in that sense.

iBiz: How do you make your money?

Filenius: Just by going to companies and selling what we have, sell our knowledge.

iBiz: Consulting knowledge?

Filenius: It's quite close to consulting, but we call it more or less applied research. Especially in my team; we have very different kind of approaches going on. Very fast ones, like three months. A company says what they want and we collect the information very fast and produce a final report for them. Then we are planners in the development projects that might take three years with several other research institutions and several companies. So it is anything in between these.

iBiz: What kind of company would come to you and what would they ask for?

Filenius: One of our studies was for a major Finnish IT company. They wanted to know what do we have to know when we start this Internet, and what can we learn from the others. They did not have the resources, and they knew that we had already been working in this area, where we have some background knowledge, so we were the right ones to work for them.

Another one is that we have eleven universities in Finland and then we have maybe ten to twenty schools that we call professional colleges where the educate people to a bachelors degree. One of them came to us and said, "Tell us about Electronic Commerce in a way so that we are able to define our education program and start producing experts in this area.

So it could be a business, an educational institution or even government that comes to us. We are the first ones in this area, and we started only a year and a half ago. There is another one starting in Helsinki, but their approach is a little bit different and actually they came to us to ask how to start. Now we are making kind a corporation agreement with them, and we will exchange the material that we have with them. We won't be competing because their main objective will be to produce degrees. The want to make Masters and PHDs. We are more focused on the business side.

iBiz: In United States, we sometimes have the attitude that we are the center of the Earth, the center of the Universe. What is a message that you would like to give to this country?

Filenius: I would more like to give a message to my own people in Finland — that they are too modest in the work that they do. We need to say that we are really good in something, even better than the Americans very often. But it is just like they are too scared and too modest to say that.

iBiz: Why are they that way?

Filenius: It is just part of the culture.

iBiz: One time on the TV program, "60 Minutes", they had a segment on Finland. The program focused on the popularity of Finns' love for ballroom dancing, which they portrayed as a contrast to the otherwise shy personalities. It was like dancing was the only flamboyant outward expressing that Finns engaged in. This seemed a bit unfair and incomplete. Tell us what they are really like.

Filenius: It takes some time to learn to know Finnish people. There are a lot of people that are like that, but there are others that are quite different in ways. They have seen the world much more because of TV and now they are travelling quite a lot. There are a lot of Americans that I know have told me that they think the Finns are quite open minded and they talk quite a lot, actually. I think some decades ago we used to have a hierarchy system where somebody was the boss and you had to do what the boss said, like, shut up and do what the boss said. This was kind of the culture for some time ago. Now it is changing really rapidly, and especially now when what I see happening is because of this Internet and all the technologies a lot of young people are getting more and more responsibility. Young people like myself are put in very tough positions in companies. There are older executives who don't like it at all because they feel threatened in many ways. The culture is changing anyway.

This has to do with our education system also. The culture was that the teacher was talking and you were listening. That was the wrong way to do that. This is changing also. All of us start learning English by third or at the latest seventh grade. Everybody knows English very well. A few speak it very well. We learn the vocabulary and we know the grammar sometimes better than you Americans. But we do not speak it as well as we know the grammar. We were not encouraged to speak as much. I can see this changing now. In the 1990s this is changing.

iBiz: Your English is excellent. Your little bit of accent does not impair understanding you at all.

Filenius: When I was a student, I was very active in the international organization AIESEC. Because of that I went to Venezuela and Sri Lanka and India.

iBiz: How many other languages do you speak?

Filenius: I speak German and some Russian, and of course Swedish as well.

iBiz: What did you use in Venezuela?

Filenius: That was a tough thing because they don't really speak any English, and there were only these other students that spoke English that were able to help me, but I really felt helpless sometimes. Now I just heard here, somebody was saying that in Venezuela they speak good German, and I didn't know that. I could have done that if I knew that

iBiz: How log were you in Venezuela?

Filenius: I was only there one week. Wasn't much but it was enough to make me wanna go there back again.

iBiz: Where in Venezuela?

Filenius: I was in Caracas.

iBiz: How long were your in Sri Lanka?

Filenius: I was there for two weeks.

iBiz: What did you do there?

Filenius: There was a conference with 650 people from 75 countries. I was demonstrating the software that we had developed. That was very interesting. There were people coming for the U.S. and from Pakistan to look at the software.

iBiz: Was your software in Finnish?

Filenius: No, it was in English.

It was in '94 when we started this approach in that organization. I think it has nowadays 87 countries involved. It does international trainingships around the world. So we started a project for global information systems for that organization, and they just lost that in August. Actually it was started in the U.S. by my university, and it was launched in Atlanta. They had this international conference over there in August. Actually, I am very proud of that.

At the time that we started it, it was '94, and that's a funny thing also. We were talking about this thing called the Internet, and we're thinking, okay, this is something that we don't have to think about that yet. And when we were going into '95, we realized that we had to change all the plans and make them fit into the Internet world, especially when you are affecting a global organization.

iBiz: Where can I go to read more about this organization?

Filenius: It's www.aiesec.org.

iBiz: The website is in Finland?

Filenius: No, that's actually in the U.S. now. It is totally in the United States. We gave it over. It was a part of our studies. It was because of that project that I was recruited to my new job. And that is the reason I am here.

iBiz: What other Electronic Commerce conferences have you gone to?

Filenius: Last year I was at one in Austin, Texas.

iBiz: What did you think of that one?

Filenius: Actually that was a little bit of a disappointment. My boss was there the year before in '95, and the speakers were about the same and the presentations were almost about the same as the year before, and I had all the material from there. I didn't get all that much new out of it. But I met some very interesting people there, which is usually the most important part anyway. The Minnesota conference last year was better than the Texas one. I was happy that I came over here.

iBiz: There have been many worldwide Electronic Commerce conferences that have occurred everywhere. Have you been to any of those?

Filenius: There's one called the WorldWide Web Conference and they have a lot of presentations that is concerning this area, there are no real worldwide Electronic Commerce conferences right now. They might call themselves that; there are some in Europe, but they are mostly European people at them. Actually the one in Bled [Slovenia], run by Professor Gricar, is the main conference. This June there were people from the U.S., Australia, Japan, and all over Europe.

It is not happening faster because it takes a long time for companies to be aware of EC. There is resistance from the older executives in the companies, and it takes a long time to work through.

Also, we had a severe recession in the early 90s, so companies are really careful in hiring people before they know it's gonna work.

It is difficult for me to pinpoint how this will all happen and what will really be the success. If I knew that, I wouldn't have to be here.

The one thing that I admire in the U.S. is the way that you are able to commercialize things. Even though the idea isn't always that good, you are able to make a business out of it. Part of the reason is that you have much more larger markets over here, and culture for making it happen. That is something that I would like to learn and that Finns should learn. If we just knew how to do that, we would have all the knowledge to conquer the world, that coupled with our technology.

iBiz: I guess that's part of your job; to get people worldwide to recognize your superior technology capabilities.

Filenius: I'm still working on that. My colleagues they are always saying that I have learned to try to really express how well we do things, so for example when we come back from lunch the keep the door open longer in order for my ego to fit in. That's what they tell me.

iBiz: So right now your job is kinda to coax egos out of the closet.

Filenius: Ya, like develop the egos.

There's also a huge market opening up now in Russia again, especially with these services as well. They are building the infrastructure all from scratch in Russia at the moment. Once they get the economy running, like 200 km from our border there are twice as many people as we have in our whole country in St. Petersberg.

iBiz: You must have contacts, since you are next door neighbors.

Filenius: Ya, we should, but it looks a little bit like we were losing that, like the exports over there collapsed, so we had to look more to the European union direction. But I think people are now waking up again and realizing what a market there is.

iBiz: I see the Russian people as a very passionate, intelligent people who had a lid on top of them for a long time.

Filenius: Ya, but it's gonna take time. Might need another generation so that people that have been brought up to believe that they are nothing can't change if you are 20 or 30 or 40.

iBiz: We have covered a wide area of subjects. Is there anything else that you would like to say? What did we miss?

Filenius: The thing we didn't discuss is how we would be able to educate more people in this area. Colleges and universities need to begin educating in Electronic Commerce.

We established association, Electronic Commerce Finland. One goal for that is some how trying to translate economic business knowledge into the business world. Another thing will be to take part in the public discussion and try to influence the laws that are going to be developed.

The second person we talked to was Dr. Joze Gricar.

Dr. Joze Gricar is Professor of Information Systems and Chairman of Information Systems Department at the University of Maribor, Slovenia, Faculty of Organizational Sciences, and has a Masters degree in Management and a Ph.D. in Information Systems from the University of Ljubljana.

His current research includes Electronic Commerce and EDI (Electronic Data Interchange), Process reengineering, and Executive Support.

He is project manager of Slovenia's Electronic Commerce Project which includes 30 business and government organizations. He also serves as Director of a Center for the Study of Electronic Commerce at the University of Maribor and is Conference Committee Chairman of the annual Bled Electronic Commerse Conference, Slovenia. He is president of Section for Research in Information Systems, Society of Economists of Slovenia, a member of the Society for Information Management (SIM), Association for Information Systems (AIS), and associate member of Electronic Commerce World Institute. He serves on editorial board of the International Journal for Electronic Commerce.

He cooperates with centers involved in research of electronic commerce at various universities. These include: University of Arizona, University of Baltimore, University of Denver, University of Minnesota, Swinburn University, and Curtin University of Technology.

Where is Slovenia?

Slovenia, formally a constituent part of the Socialist Federal Republic of Yugoslavia won their independence in 1991 after a declaration on the sovereignty of the State of the Republic of Slovenia and a short military battle with the army of Yugoslavia. To read about their history and current culture, go to their website, "guide to virtual Slovenia" at http://www.ijs.si/slo/.

iBiz: I would guess that not many people in Minnesota or the U.S. know where Slovenia is or much about it. I spent a brief moment at the Slovenian website, but what else can you tell me?

Dr. Gricar: There is a piece of information that may not be on the Web yet, but I believe it's important. Would you know how many countries their citizens do not need a visa to get to the United States?

iBiz: I have no idea.

Dr. Gricar: The list of countries is published on the forms that are available in airplanes, when you enter a country, and they would say, "If you are from this country, you don't need to have a visa." It used to be 24, and now it is 25, and Slovenia is the 25^th. This is a good message from two weeks ago. I still have a visa. I asked for a visa a month ago, when we knew it's coming, but say, come on — you better have it because we don't know when all paperwork is done. But two-three weeks ago is done and no visa needed. This is good. This is good. And I don't know if this is on the web yet, but maybe somewhere, because it is important travel information. You don't need to have a visa if you come from Slovenia.

You know, as this stuff works, Americans also had to have a visa — if you request, we request, but it was not respected. Our colleagues and friends could come years ago and get a visa on the border, no problem. And it last maybe one year; there was not even a stamp; you just go through. Of course, they knew it is coming — more of time and paperwork on your side, of course. But now it is done and I am very happy about that. It's a good sign.

iBiz: It's good when walls come down. How do you see this relating to what you are doing?

Dr. Gricar: One of the walls I see is so much related to Internet is that Internet broke information walls. Now, our students, or any students can go anywhere, to any server on the Web. Is that nice?

I am coming to the United States to learn about Internet. What do you want to know from me?

iBiz: When was the Internet first available in Slovenia?

Dr. Gricar: I first saw E-mail, which was Bitnet at that time in December '87 in the office of Professor Hoffman at the University of Minnesota. He came one day and said, "C'mon, I will you something, something which is good." So he did, and it was very impressive — very impressive. I returned home, and in January next year, in '88, I sponsored a meeting of three universities — we were in Yugoslavia at that time. We came together, and the first question I asked was "What should we do to be connected to Bitnet?"

It took some time. I think maybe two years to get everything in place. Then we were connected, I would say sometime in '90 to Bitnet, which was replaced by Internet later on. So in '91, when Sovenia was at war and there was an attack; I remember those days very well; Internet was the only connection to the world and we were able to send messages and get messages, and the difference was quite significant. E-mail messages on Internet were about 24 hours in advance to formal, official messages published and broadcasted. And there was the difference between the two sources, and people asked to us questions — what is the real story? So Bitnet E-mail meant a lot at that time. E-mail was important, quite a lot. We had two lines going out to the world. One was cut right away. The other one somehow was not found, and so we were able to use it. We had no telephone lines, no faxes for maybe two weeks, and it was very important to be on Internet.

Since then the use is increasing. We have all university students access provided. I would say they do not have Internet mailbox. They are "provided" and available to all university students, staff, and faculty. In my classes I request do have E-mail in order to play with it. Some may give up, but usually, my impression is never again. And sometimes I get the message that they are happy to be pressed to be connected because they were able to discover what it's like. But nowadays it's quite common, including high schools and grammar schools more and more, and this is about our educational program in the country. Some high schools are appointed as Internet project. They are case examples. They develop some systems and show to all other schools in order to encourage schools to get hooked to the Internet, which helps a lot. We also have a number of Internet providers in the country, local Telecom being the major one, very supportive, sort of pushy, and now we can see more and more companies getting connected to networks.

I can give an example. There is a pharmaceutical company in the country with about 3000 employees, and they have 2400 mailboxes, so close to everybody on Internet, which is wonderful.

Internet is not expensive to get. I won't say any amount because I am not quite precise, and it depends who and when. Prices are going down, but it's something what is affordable and it's used in homes and small companies, too.

iBiz: How extensively is it used in homes?

Dr. Gricar: Slovenia is one among those countries where computers are heavily used at homes. We don't have real statistics, but the office of statistics of Slovenia is considering to have a special questionnaire for yearly, annually research. They are asking a number of things, not about PC yet. They expect to ask selected families about use of computers, about Internet, so we don't have hard statistics. But it's quite a lot. People are getting equipped for modems and there many family users, which we can notice in the evenings. It is difficult to get Internet; everybody is there. After 7:00 lines are cheaper, and then people of all ages are there.

A little progress that we see in the last twelve months, ISDN lines are becoming very popular, and would provide not only faster and more arrival line, but additional lines. They are already available and they make a difference. So in my home, I have three lines now. One for the telephone — analog, and ISDN which provides me basically two lines, one for computer, one for phone, so now my wife is happy. She can have her phone again. In, I believe, next two years, all switches will be replaced with digital switches, and so the country will become digitalized.

iBiz: Soon you will be ahead of us.

Dr. Gricar: Well, not so soon. You are moving fast.

iBiz: Yes, but we have lots of old telephone equipment that will have to be replaced, and people are just now becoming aware of ISDN, and we are trying to educate our customers on the benefits of ISDN.

Dr. Gricar: This is exactly what we are trying to do. And it's important to play the game. Now I can tell my students to do it because it's good.

iBiz: I had to leave the Slovenia website just as I was starting to read about the war and your independence in '90 and '91. Tell me what happened. You were invaded?

Dr. Gricar: It was 1991, the next day after independence declared. The celebration was at nine, ten in the evening. At three in the morning tanks started to roll out barracks into the streets.

iBiz: Tanks from Yugoslavia?

Dr. Gricar: Yes. Tanks rolled into some strategic positions: the airport; TV towers were bumped. However, the troops, the military was stopped by well organized blockages. Resistance was well organized because anticipated that the military will attack. And the resistance was good and people said, "Enough is enough." It took ten days. I think close to 90 casualties, people killed during the attack and military actions. But then it stopped. In the late the October, the last federal army soldier left Slovenia. And at that time all sirens and all church bells went off.

iBiz: What an exciting time.

Dr. Gricar: The ten days were not easy but not comparing to what is happening somewhere else.

iBiz: Slovenia is going back to an original name with original boundaries?

Dr. Gricar: Slovenia was never an independent country before. Slovenes are in the region for about thousand years, and sort of Slovenian country, but as a state was never established before. Slovenes lived in the area of now the Republic of Slovenia, and also in the areas close to the border of Italy, Austria, and Hungary. You know, borders are moving up and down, and people basically stayed. So the country was born in June '91, a half a year after it declared that independence will be declared. So it took about six, seven months in order to prepare for it. Since then we have been independent country with slightly over 2 million population and about the size of half of Switzerland. We are on the sunny side of Alps. The last chain of Alps would come up to Slovenia. We have access to North Adriatic Sea, short, but accessible coast, with the major port of Copen. Copen is the main port for Austria and Hungary because they deliver and get goods from Copen. Slovenia is positioned in a way so that crossing Slovenia is the easiest way to get from western Europe to south eastern and Middle East, and from central Europe to the Adriatic. The valleys and mountains are most convenient to get logistics flow, traffic flow. It's well positioned that it should be provided for transportation of physical goods and people.

This is why electronic commerce is so important to Slovenia, for logistics. There will be goods flowing through the country and we better prepare for freeways and railways, but also for flow of documents and messages. That's important. Port of Call, forwarding agents, and some transportation organizations are very much towards EDI and electronic commerce.

iBiz: EDI (electronic data interchange) — is it going to become Internet instead of EDI as it is now?

Dr. Gricar: I would see that we would have both Internet as additional mechanism for doing EDI if that is the way we can connect. Internet is opening up new areas for electronic commerce, which we were not able to tap before, company to consumer. For company to company business, EDI is a perfect mechanism, and I think we will just see it growing and spreading. For organizations that exchange messages on a daily basis, they would not see many reasons to change what they already have. It took years to get rules of standard. EDI is pretty well established in the country.

There are particularly three, four types of movers. Three of them are government related: customs, healthcare, and funds transfer. The fourth group would be business group, and here I would say pushed from the automotive industry and some other industries, electronics, for example. Those companies that export to Europe and United States, they have to be on EDI already, and they are.

I learned about EDI about ten years ago. Now were are better connected than we were ten years ago. It was important message that there are standards; then we arranged several mechanisms to prepare for EDI. We develop prototypes and we start using them. And there are several organizations that are on EDI. Slovenia is one of few countries that Internet is used for funds transfer in daily operations. Safe enough, and it works. Especially small companies are very, very happy about that. So they can arrange for the payment to be sent from one company to another company, maybe in 30 minutes — it's wonderful and very convenient. What I like also is that companies using Internet or electronic means sending message to the agency enjoy 50% discount.

iBiz: So it's been well accepted?

Dr. Gricar: It's been well accepted. It took some time — to think about that, some trial usage, prototypes and trial usage in companies. It took some time to get active supporters. When executives and general managers took it over, it went pretty, pretty fast. We have directives general customs and health insurance very active, and they are the doers and pushers. We are told it has to be done, and this is interesting. Now the invoices the healthcare insurance has over 50% of invoices they get on daily basis are on electronic form already. And as a result, as a consequence, hospitals and doctors are thinking of other usage of the same technology.

We had a visitor from the Twin Cities, coming to us several times to attend our conferences; he used to be IT manager for Super Value, and he is named as one of EDI pioneers in the United States. He come over and he was telling executives of trading companies about the use of EDI in trading companies in the United States, so he was talking to colleagues, and it helped and the companies starting to think about EDI after that. And so major projects started and are already operational or well positioned to become operational. So there are several ties with the Twin Cities.

iBiz: What were your impressions of this conference?

Dr. Gricar: I have learned a lot about what's going on, about additional aspects of electronic commerce, as far as Internet is or can be involved, about ways how Internet as technology can be used not only for marketing, for promotion my products, but more so to open up new ideas, how we can see what really is happening in the area of consumers. What are they afer? What are they looking for? What type of Web pages they are looking at. Using findings would not only enable us to get information to consumers, but also to get a number of new ideas about how the webs are used. Really, it's very powerful.

I think it was a good group of business related people who have something to tell each other, a good combination university and business. This is what I am a very very strong believer of, that we have to cooperate, working at university to know what business is doing and be able to prepare students for what they will need in an organization when they graduate. And on the other side, be sure that we at university would understand what the issues are: what is or what's not of interest of business people.

I was visiting some organizations here, 3M and General Mills, and we were talking about what the issues are. An basically what is a major issue comes up is education, knowledge. Do we know about the technology? Do we know how to use it? Do we know what the densities are? Knowledge, knowledge. So universities better be close to what's going on.

iBiz: What is the future of electronic commerce in your country? What are you trying to accomplish? What do you want it to do?

Dr. Gricar: Be accessible from anywhere and being capable to go everywhere, doing business and pleasure at low cost, easily so that everybody can get engaged.

iBiz: What does your country produce that they want to send to the world?

Dr. Gricar: Technical products, furniture, wine, pharmaceuticals, leather. For us, education is important, global education. We would like to prepare to connect our students to other universities, other professors. We would like students to go around and search for knowledge, get knowledge, by using Internet. Logistics is important to Slovenia. We have to prepare for European union and be compatible for the information society they are preparing for.

There was one of the messages that Martin Bungeman, the commissioner of EG3, the major pusher of information society, electronic commerce in European union, had about a month ago at the Forum For European Union And Central And East European Countries. It's a forum that's supporting both sides and Central Europe included to prepare for the information society and check countries that want to enter the European Union. There will be an additional check -ist about readiness for information society: check this, check this, check this — an audit. So we better prepare for that. I perceive this is very important for the democratic world for all of us, so we better be there and not the last ones.

iBiz: What is your vision of a worldwide economy?

Dr. Gricar: Will be tough, but I think will also be very, very fruitful. I'm thinking of the Mall of America. I was impressed, spending just a few hours there, but I was impressed. New concept, and now you are getting people from all over the world, coming and shopping here in the Twin Cities. Ten years ago who would believe? I think it's big. So getting connections to everybody can encourage many people to do business internationally because it will become easier that it's nowadays. But may also be very, very dangerous for those who will not be there. They may not be, not may, they will be excluded. Business will not touch them. I think this is a problem, but I believe there is more to gain than to lose, so we better to it.

iBiz: Now that communications and commerce can travel around the world in milliseconds, what do you see regarding a worldwide government coming into existance?

Dr. Gricar: I think we can see it already happening. Already there — an international police force goes after a crazy guy. It will be much more efficient and save many lives. Crazy guys will shut up, perhaps, or quiet. I think it's just a perfect mechanism. What I have learned from a colleague of mine, a Professor Klein in Germany, a small local newspaper in Germany decided to go to Internet, and they have Internet issue of newspaper, complete issue, because young people, 30% of subscribers to newspaper expressed interest in Internet and they were mostly younger people using Internet. So the publisher was anxious, making sure that they can following the development.

They discovered they got new subscribers from all over the world. Germans of that area are subscribing from all over the world to a daily news local newspaper because they want local news, for people with roots. Without Internet, you don't do it. Is that nice? What a service! That brings happiness and it costs nothing! There is nothing as good and as cheap! Well, the big bill is paid somewhere else. It is at no charge. We just have to be smart enough to do as much as we can.

iBiz: Some people are afraid of the Internet and worldwide electronic commerce bringing about a world government. Do you see that prevailing?

Dr. Gricar: No. We both know that government can control everything and everybody without Internet, and we experienced that. Having Internet, everybody can control everybody, and as long as controllers can be controlled, is okay. But this is not issue of Internet, this is issue of the structure of our democracy. So Internet will not hurt. Those who would hurt, they would cut even and deep without any Internet.

iBiz: Are your consumers purchasing online?

Dr. Gricar: One of my students is working on a graduate thesis right now. Data is collected; now she will make the analysis, and the research is what are the opportunities and threats for electronic shopping, as seen through the eyes of the consumers in Slovenia. She sent questionnaire out with over 50% of response, which is excellent. The same questionnaire was also on the Internet and over Internet, she received double as many as was sent out by paper. So we are learning two things: what people think about shopping and how to do survey on Internet. We don't have results yet. General impression is there are some concerns. People are not experienced enough, but they will learn. As far as they are, oh, they are looking forward to it. My students are buying CD ROMs and books over Internet and shopping at amazon.com.

I am in this business for some time, and I am sometimes surprised at how impressed I am.

You must go to Slovenia web page and go to the area of wine. They have wine areas, wine descriptions, and we were working with the wine producers association of Slovenia at our last conference in June. We had wine tasting over Internet. We had wine from Australia, wine from United States, and Slovenia. We were talking to people in Melbourne, business meeting at seven in the morning, tasting wine, and we were tasting wine at ten in the evening, which was much better, after dinner. Just to demonstrate what Internet can do for us. We were drinking the same wines. We shipped to Australia, too. And it worked very well.

iBiz: We learned at the conference that no one can point to any real profits from business on the Internet, and business are hesitant to invest in this area for themselves. Are you finding that businesses are reluctant to invest in electronic commerce?

Dr. Gricar: It is the same. People are, of course, sensitive about investment. In our country, even more, because we are not a rich country. But depends on division. The people I work with would see this as an investment in the infrastructure, where government has to play a role, either by investments or by getting rid of monopolies to encourage the private sector to invest. I would see a lot of investment into knowledge and education. Slovenia has few pieces of investment that may be unique, but they are very special to us. For example, once a year there is a competition for young programmers, not techies, but you know, those good at software — high school grades; they would compete. The 400 best would come together once a year and they compete to demonstrate who is the best, second best in the country. The competition creates an interest among young people. We have major software manufacturers with their own companies. We have Microsoft Slovenia. It is Microsoft company in the smallest country. Microsoft invested in local office to be translated into Slovenia language. Makes it easier for people to use package. So there are several aspects of investment.

Slovenia will be among the first in Europe where all citizens will smart card. Project is already under way. Seventy thousand people in pilot, and by spring they will demonstrate the results, and I have no doubts the decision will be, let's continue. Now both universities, we have two universities in the country, are thinking, "How can we use the same smart card for something else?" Student IDs, student records, a number of things.

My impression is that many people in the country who see information technology as an important asset, an important investment, and something that will be good for the country as a whole. Something good, worth doing.

iBiz: Right now, what does smart card hold?

Dr. Gricar: For the healthcare. Oh, we have smart cards for telephones, but you know, this everybody has. But healthcare is new, for citizens, babies to grandmas. For the time being there will be just basic data about the individual, and this will prevent retyping of who you are whenever you go to a doctor or to the pharmacy. This will make a tremendous push in making an understanding of the power of a smart card.

iBiz: Is the smart card being used at all for money?

Dr. Gricar: The first banks are preparing for it. They have technology for magnetic stripe cards. Going to smart cards would mean change technology, and they may be a bit reluctant. Healthcare went right to smartcard.

iBiz: What would you like to tell us Americans.

Dr. Gricar: The industry I know about her is knowledge, universities. I was able to spend close to four years over twelve years here and I was able to learn so much. I believe this type of industry is so well organized here in the United States. Research, education, working with industries, and technology that you not only already have but use. Like cars, which are so much imbedded into the life in the United States, so is information technology, I believe much more than in Europe. We may generally use the same technology, the same software, but the way you use is different.

Just one detail, is small, most the people in the United States use ten fingers. Not in Europe. There are some special courses where you can get that. I don't know where Americans get it. And keyboards will be still some time with us and not just go away.

iBiz: You are a messenger of Slovenia, a new country whose people have been there a long time. What would you like to tell the world?

Dr. Gricar: Come and visit with us. We will have good wine this year and that whole region over there is opening up. Much to see. Think of Venice, very close, Salsberg, Vienna. The Croatan coast, the Adriatic is very beautiful.

I would think of working together to get good of all of us and exchanging students. Bringing ideas together by bringing people together.

When will you come to Slovenia? I have been told every Wednesday from Zurich, they bring people here to shop. And Zurich and Lubiana Airport is not far away.

iBiz: With your insight and enthusiasm, you should start an all-Internet university.

Dr. Gricar: Next June we will have a very special meeting again. Chair of the meeting is Don McCovery of the University of Denver, and we will bring together directors of centers for the study of electronic commerce or research in electronic commerce. We started last June and it worked perfectly. We discovered how many people there are who would like to do something and who really didn't know what and how. So at this summit, European Commission is supporting the effort to develop a global electronic commerce graduate program. We would like to get students doing business electronically, so that when they come to the company, they can say, "We have done this before."

iBiz: Thank you Dr. Gricar. Until I can make it to Slovenia for a visit, or until you are back for the U of M conference next year, see you on the Internet. iBiz