Councils slow on e-commerce

A survey of local councils on their e-commerce strategies has found that the vast majority don't have one.

A survey of local councils on their e-commerce strategies has found that the vast majority don’t have one.

The University of Waikato Management School surveyed all local authorities and had a response rate of 50%.

The first three questions enquired about the status of the councils’ e-commerce strategies. Only 6% of councils have developed an e-commerce strategy, with 94% saying they had not. However, 12% said they were currently developing an e-commerce strategy. The outlook is more favourable in the medium-term view. When asked if the council was likely to embark on an e-commerce strategy over the next 12 months, 40% said yes and 60% said no. In the next two to three years, 80% said yes and 20% said no.

Early indications suggest local government e-commerce strategy is likely to be directed internally rather than externally. When asked if the council was concentrating its e-commerce programmes internally on its own business activities, 90% said yes. But only 7% of councils responded positively when asked whether they were pursuing e-commerce leadership strategies for the local business community.

Stuart Locke, who ran the survey and wrote a report based on its findings, suggests the problem may be that there are no “first mover” competitive advantages for local bodies that embrace e-commerce.

He says when local councils were asked to identify the barriers to e-commerce, the big issue was cost, followed by technical security, the organisational culture of local government and an unsophisticated business community.

“We asked for council impressions as to the main barriers for local businesses embracing more e-commerce. The most common suggestions was their lack of knowledge.”

This has been supported by Waikato University’s other studies of small and medium-sized enterprises (SMEs).

“It would be an overstatement to present the dilemma as one of SMEs believing that local government can play a leadership role and local government thinking that businesses aren’t sophisticated enough to lead,” says Locke. “Nevertheless, it does point to a need for a greater level of collaboration.”

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