2000 : WHAT IS TODAY'S MOST IMPORTANT UNREPORTED STORY?

The current American monopoly on Internet innovation is not etched in stone.

With about two thirds of the worldwide internet user base in North America, US based companies generate over 80% of global revenue and these represent about 95% of the sector's overall market capitalization of about a trillion US dollars (as of January 2000). This is indeed a paradox for a medium that was designed to be open and global.

Quite understandable, though, when you consider that US entrepreneurs benefit from: abundant venture capital, more efficient equity markets, flexible employment, higher PC penetration, efficient infrastructures and earlier deregulation leading to lower communications costs to consumers, better business academia linkages and a large, homogeneous domestic market.

Of course, the rest of the world is catching up, as is increasingly reported in the news. In Europe alone, the aggregate market value of internet companies has shot up by a factor of 30 in the past year, admittedly from a low base of $ 2 billion early 1999 ­ to be contrasted with "only" a four-fold increase for internet companies quoted in US markets. Thus, observers generally agree that the disproportionately low aggregate capitalization of the non-US internet companies is a temporary fact.

However, the media here often views the primacy of US innovation in the internet ­ which is of course the premise of its leadership ­ as something like an American birth right. During the past "American century" this has been a conventional wisdom for other equally significant sectors. In the late 1960s, a major unreported story was that Boeing's leadership in civil aircraft construction was more fragile than one would expect; yet, Airbus's orders surpassed Boeing's last year. Ten years ago, US dominance in cellular telecommunications technology seemed equally impregnable. Since then, the European GSM consortium has spawned a technology which is now widely accepted as a global standard for digital mobile telephony. Likewise, could new internet concepts and user experiences emerge outside of the US, with global relevance and reach ?

A remarkably underreported story is that the existence of a uniform mobile standard outside of the US is poised to be the foundation of a new generation of internet-enabled applications, which can be an extremely significant innovation. If portable devices and internet-enabled mobility are to be at the center of the current information revolution, Europe seems at an advantage to seed the landscape with new concepts, technologies and companies leveraging their consistent mobile infrastructure.

In Europe, location-sensitive services are being tested as we speak, enabling merchants to reach pedestrians and motorists with information and opportunities. Thus, rather than competing online with pure-play e-commerce companies, established bricks-and-mortar businesses could find their revenge in the high streets, thanks to these devices. The best technologies enabling these experiences might well come from all over the world ­ but the first movers are likely to find a privileged ground in Europe: a caveat for the complacent in the US !