Interaction Between Government and Industry Is A Core Issue In The Development Of The Information Society, IDC Study Finds

FRAMINGHAM, Mass., March 31, 1998 — In 1997, an issue core to the development of Internet commerce and the information society was government/industry interaction, according to a special new report published by International Data

Corporation (IDC). According to the research, the information society will remain a central topic of debate and policy until the groups involved (government, the IT industry, and society) find common ground for dealing with the challenges the digital medium presents to traditional markets and economies.

"The current federal political administration, undoubtedly pleased with the economic boon the Internet brings to the United States, appears committed to fostering unfettered commerce in cyberspace," said Rick Miller, IDC research analyst and editor of IDC's flagship publication, The Gray Sheet. However, other government entities, namely states and international bodies, are not happy with the Internet's 'duty-free' status. IDC believes Internet tax issues will take center stage in the national and international political arenas in 1998. "The federal government's free spirit ended when it came to the topic of encryption, and IT leaders are railing against the administration's alleged paranoia surrounding Internet security," said Miller.

Bringing the information society to the masses was a big business in 1997 –with continued strong growth projected for the coming year and beyond. Mergers and acquisitions were the norm in the ISP and telecommunications markets and

hardware vendors squared off in battles of HDTV and low-priced PCs. Consumers have begun to embrace Internet commerce and business-to-business Internet commerce is expected to grow even more quickly in the near term.

The IDC study noted a shift in demographics for computing households in the United States in 1997. Average incomes and education levels began to move downward, and technology's great unwashed appeared ready to accept the Internet as a standard platform for communication. The shift was not happening drastically enough for many IT companies, and PC makers slashed prices in an effort to spur the consumer market, which many frustrated vendors would call sluggish and ambivalent at best.

"In the short term, the Internet will prove the focal point for government fear, industry greed, and society loathing," said Miller. "However, these group mentalities will temper rapidly and the efficiencies the Internet provides will secure its place as the preeminent business and communications tool in the coming century."

This report, Society and Cyberspace, 1997: Internet Interaction With The "Real World" (IDC #B15598), presents summaries of events that have affected the development of the Internet as a platform for the information society in government, the information technology industry, and society. The report also presents findings that illustrate the Internet's effect on the development of society in the United States. It is available for purchase by contacting Cheryl Toffel at 508-935-4389 or ctoffel@idcresearch.com. For additional information about Internet@IDC, please contact Beth Freedman at 508-935-4764 or

bfreedman@idcresearch.com.

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases, and offers full-text searching of recent research.

IDC is a division of International Data Group, the world's leading IT media, research and exposition company.

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