The future impact of the Internet upon Commerce and Society Jacob Slonim Adjunct Professor University of Waterloo Faculty of Mathematic Department of Computer Science Waterloo, Ontario, Canada N2L 3G1 Karen Bennet Manager Centre for Advanced Studies (CAS) IBM Canada Ltd. 1150 Eglinton Ave. E. North York, Ontario, Canada M3C 1H7 We are currently experiencing a paradigm shift from computing centric to network and human centric. As a result, we are now facing new challenges in both social economics and technology as our new society is shaped. Our position states that the social economic challenges ahead of us will be more difficult to deal with than the technology ones. These social economic challenges will create barriers preventing us from moving to digital information environments such as electronic commerce, digital libraries, tele-medicine and long distance learning. A radical new thinking must be incorporated into business strategies for them to survive in this expanding global economy. A business which is able to adapt by conducting transactions electronically will reduce costs and become more efficient and competitive operating with less personnel. The middleman functions and businesses such as store and distribution channels will become obsolete. There will however be new types of businesses evolving which orient around the needs of individual consumers. There are several factors that strongly support our position that the social economics challenges will not be easily solved. The key issue is associated with privacy and trust of this new society by the consumer. The question of privacy is of great concern to all of us especially in a new world where information is collected and available electronically. The computer has enabled businesses to collect and see information about its consumers. It has also enabled consumer behavior to be monitored and potentially predicted. We predict that only businesses that ensure complete confidentiality and protect consumers personal information will be used by consumers in the future. Security on the other hand, is keeping personal information away from individuals who don't have a need to know. Security verification and validation systems for both the consumer and merchant need to be established for consumers to start to trust the electronic commerce systems. There is a need for intelligent agents which will enable negotiation to take place on behalf of the consumer with specific constraints. The business world will change to become a world with no borders. The conventions associated with currency, international trade and regulations need to be changed. Global currency, laws and regulations need to be redefined. Law enforcement such as border patrols, immigration and customs have in the past been run locally. In this new global world, every country needs to cooperate and new laws established that have been agreed to internationally. A global method of payment for merchandise purchased must be established. This payment method must allow us to be anonymous if we so choose, similar to cash today. Infrastructure costs for setting up this type of network for a country will be hard and costly but if not established could result in diminished standard of living. The question on whether there will be charges for this infastructure needs to be addressed also. The current perception is that the rich will get richer and the poor will become poorer. The issue to be dealt with is that everyone must be enabled to take advantage of this new economy. The ability to leverage the information at the same time maintain security and confidentially will be the key to success for any business. Recent surveys by Commerce Net and Nielsen indicated that the consumers on the internet are highly educated, have a good income and are within 35-54 age bracket. This group of individuals does not represent the World's population and further investigation is required to determine why there are not users outside this age range. Our value system associated with software must change for this global economy to succeed. Today, software is commonly abused by individuals, ie. taking illegal copies. This obvious breaking of the law is not negatively viewed by the public as would shoplifting. The potential of white collar crime increasing is extremely high. We don't feel that there are adequate laws and mind set in place to enforce these new type of crimes on the Internet. As more and more users come on-line, the technical issues of scalability, performance and speed of searches, efficient storage, sufficient bandwidth, seamless integration of different architectures and databases will be critical. The challenges ahead of us both technically and socially are overwhelming. We are confide that with time the technical challenges can be solved. With these new technologies being adopted, there will be social consequences. This new market barely existed a decade ago and has had an explosive growth rate and all indications are that it will continue. We need however to be extremely cautious not to hype it prematurely. For electronic commerce to be adopted by the general public, individuals need to trust and feel in control of their own destiny. There are great opportunities for both technologists and businesses to be creative in their solution to these challenges. We need to deal with both the social and technical challenges in parallel if we are to move forward. We need to be fully aware that technologist's social functions tend not to reflect the behavior of main stream society and therefore shouldn't dictate how our society should change in the future.