The growing use of the Internet and e-commerce for conducting business is being driven by global and national forces. Many firms are being driven toward greater adoption of e-commerce by global competitive pressures, which some suggest will lead to a global networked economy. On the other hand, firms are also being driven by national environmental and policy factors, which are both drivers and inhibitors of e-commerce diffusion. A key question is whether the continuing diffusion of e-commerce will lead to a single homogeneous global market or whether national market niches create special business opportunities and barriers that affect innovation outcomes. This paper identifies and discusses major environmental and policy related factors that influence e-commerce diffusion across and within countries. It is based upon case studies in 10 countries representing both developed and developing countries in each of three major world regions. Although e-commerce is still in its infancy, this preliminary analysis indicates that diffusion is an uneven process across countries and industries. Certain countries and industries are driving the process while others lag behind. Digital divides are evident both between and within developed and developing countries. Moreover, local differences in e-commerce are evident between countries, suggesting that the diffusion process is strongly shaped by national environments and policy rather than following a universal trajectory.