U.S. business trade on the Internet will explode from $43bn in 1998 to $1.3tn in 2003, Forrester Research Inc. predicted in a report released on Thursday. Forrester said it expected online business trade to surpass 9 percent of total U.S. business sales by 2003.
Online business trade will find its way into all U.S. business supply chains over the next five years, although not all industries will adopt Internet commerce at the same rate, the report said. The research company said it expected nearly $20bn in online sales in 1998. By 2003, the leading industries will include aerospace and defence, petrochemicals, utilities, and motor vehicles, Forrester said.
The research predicted the value of participating in Internet commerce will increase dramatically as more companies join in. Internet trading initiatives generally start small, as early adopters use their industry clout to pull suppliers and customers online. "Once these companies realise the efficiencies of Internet trading, they will persuade their business partners to join them online," Forrester said in a statement.
In mid-1997, Forrester predicted that U.S. Internet business trade would reach $327bn by 2002. But in the subsequent 18 months, the pace of growth has exceeded the level Forrester expected, leading to the new forecast. "One of the major factors in the new forecast is recent research indicating that the United States has entered the commerce threshold -- an 18- to 24-month building period preceding five to 10 years of Internet commerce hypergrowth," Forrester said.
Computing and electronics sectors have already entered a "hypergrowth" phase, and several others are set to follow, the report said.