E‐Commerce and Development Report 2001

Citation

Coppock, K. (2003), "E‐Commerce and Development Report 2001", info, Vol. 5 No. 1, pp. 76-77. https://doi.org/10.1108/info.2003.5.1.76.2

Organizations in the developing world are contemplating alternative approaches to e‐commerce, considering the national, regional and global implications of this new business tool. This latest United Nations Conference on Trade and Development (UNCTAD) report on e‐commerce will go a long way in assisting with these efforts. UNCTAD acknowledges that there has been a dramatic setback in the dot.com industry, yet largely writes it off to the turbulent nature of technological revolutions. It does not downplay, however, the importance of a guide on how best to direct e‐commerce investments and policies, recognizing that a more disciplined approach must now be taken with regard to this new technology.

The book is divided into ten chapters, grouped into four main areas: facts and figures, impact of e‐commerce on selected sectors, e‐commerce environment, and experiences and opportunities. The chapters are preceded by a comprehensive trends and executive summary section. The report is designed to help potential e‐commerce users “avoid the mistakes” made by the pioneers of this new technology, and it provides a comprehensive assessment of what e‐commerce is, discusses applications where it has a particularly good fit and comments on specific legal, financial and logistical issues associated with the technology. The final part of the report discusses issues specific to least developed countries (LDCs) and China. This is a reference book and is meant to be used as such. Hence, I would not recommend reading it cover to cover, unless one is experiencing bouts of insomnia.

UNCTAD does not gloss over the rise and fall of the new economy, instead, it tackles the issue head‐on in its “Trends and Executive Summary” Section. It begins by discussing the myths circulating during the dot.com boom, and subsequent bust, and translates them into concrete lessons learned. “The Internet changes everything” or “the Internet changes nothing”. Which is true? Neither. Contrary to the belief of many in the late 1990s, business cycles and traditional economics still do apply in this new technological era; the Internet has not defeated these long‐standing paradigms. Furthermore, e‐commerce will not become “an engine of development” unless a host of complementary developments take place in human and physical capital as well as in the mindset of organizations. Conversely, the Internet has fundamentally altered the competitive landscape and those that harness its unique characteristics and translate them into business process and operational innovations will find that e‐commerce can be a powerful weapon in the business arsenal.

Yet how many firms, industries and countries use e‐commerce? A tricky question. Although figures on e‐commerce adoption rates proliferate, Part One of the report discusses how there is no consistency in the methodology or results of these estimates. Furthermore, most government statistical agencies are not yet collecting these data in a systematic fashion as, before e‐commerce can be measured in a reliable and scientific fashion, it must first be defined. UNCTAD uses the Organization for Economic Cooperation and Development’s (OECD) three‐dimensional approach to defining e‐commerce which considers the network, processes and actors involved in the electronic, or more narrowly defined, Internet transaction. Now that this definition has gained international acceptance, indicators are being set to specifically measure e‐commerce. The next step is determining how best to collect these data, adding these indicators to existing surveys or developing new e‐commerce specific surveys. UNCTAD highlights the pros and cons of two contrasting methods with a focus on issues of particular interest to developing nations.

Part One also discusses the results of a quantitative analysis UNCTAD conducted to calculate the potential cost savings of e‐commerce on the global economy. UNCTAD presents a strong case for “catching up quickly” in e‐commerce, as the potential productivity increases this solution could offer to developing nations could make it a key tool in economic development.

But where to start? Which applications particularly lend themselves to this new business tool? Part Two address these questions. UNCTAD states that e‐commerce is primarily a business‐to‐business (B2B), and not business‐to‐consumer (B2C), affair. However, the selection of e‐tourism, B2B marketplaces and e‐government in this section does not necessarily support this claim, demonstrating that there is still no clear‐cut answer on where e‐commerce is best applied.

Why tourism? Tourism is one of the most dynamic e‐commerce sectors and is also an important industry in many developing countries, an excellent combination. Another priority area for e‐commerce is B2B marketplaces, an application predicted to be the largest piece of the overall B2B e‐commerce pie by international research groups. E‐government is the final target sector. It is positioned as a way of both improving government efficiency and encouraging the private sector to adopt e‐commerce, by leading by example.

Part Three tackles the legal, regulatory, financial and logistical issues related to e‐commerce. Although technical in nature, it appears that great pains were taken to make sure that these chapters would be understandable to all. For example, in the legal chapter, UNCTAD focuses on the choice‐of‐court, or the debate as to whether Internet transactions occur in “cyberspace” or in one of the two physical locations where the actual transaction was incurred. UNCTAD carefully outlines the issue, discusses various alternatives for developing countries to consider and indicates the direction of international consensus. UNCTAD takes a similar approach when discussing the financial issues related to e‐commerce, in particular online payments. Finally, UNCTAD discusses e‐logistics, outlining the interdependency of e‐commerce and logistics, identifying critical logistical issues to be addressed and providing some high‐level recommendations for resolving these matters. Again, these chapters reinforce the fact that e‐commerce is more than a technological phenomenon and a holistic approach must be taken to constructing an environment conducive to harnessing the strengths of the technology.

The final section of the report, Part Four, discusses the status of e‐commerce in LDCs and China. UNCTAD used the results of a survey and 16 case studies it conducted as the basis for the LDC discussion. It found that e‐commerce has the potential to decrease transport costs, leading to increased export competitiveness of LDCs. In terms of applications, “offline teleservicing” was seen to be particularly appropriate in these markets. The final chapter focuses on China, not only on its e‐commerce activities, but on its overall information and communication strategy.

The strength of this book is that it provides two levels of analysis. The “Trends and Executive Summary” provides a high level perspective of the overarching issues and opportunities related to e‐commerce and the individual chapters delve much deeper into specific functional, sectoral or geographic areas, providing concrete policy and practical recommendations.

Its weakness is that, although it highlights the importance of changing organizational culture and mindsets to allow for the creative exploitation of e‐commerce, it does not provide concrete recommendations on how to best facilitate this philosophical change. It also neglects to focus on the development of human capital, another essential element required for an environment conducive to e‐commerce.

This is a key reference book for practitioners, policy makers and academics involved with e‐commerce.

Note: The “Trends and Executive Summary” section of the report is available in English, French and Spanish, free of charge on UNCTAD’s Web site (www.unctad.org/en/pub/ps1ecdr01. en.htm). This 54‐page summary outlines the predominant themes and recommendations made in the book.

E‐mail: karen.coppock@tufts.edu